<PAGE>
As filed with the Securities and Exchange Commission on October 7, 1999.
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
(Exact Name of Registrant as Specified in its Charter)
Washington 601 West 1st Avenue 91-0609840
(State or other Spokane, Washington 99201- (I.R.S. Employer
jurisdiction of 5015 Identification No.)
incorporation or (509) 838-3111
organization)
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
C. Paul Sandifur, Jr., President
Metropolitan Mortgage & Securities Co., Inc.
601 West 1st Avenue
Spokane, WA 99201-5015
(509) 838-3111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With copies to:
Susan Thomson, Esq. Robert J. Ahrenholz, Esq.
Associate General Counsel Kutak Rock
601 West 1st Avenue 717 Seventeenth Street, Suite 2900
Spokane, Washington 99201 Denver, Colorado 80202
(509) 838-3111 (303) 297-2400
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
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 check the following box. [_]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
Proposed Proposed
maximum Maximum
Title of each class Amount offering Aggregate Amount of
of securities to be to be price per Offering Registration
registered registered unit Price(1) Fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9% Notes Due 2004............... $25,000,000 -- $25,000,000 $6,950
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(a).
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until this
Registration Statement shall become effective on such date as the Commission
acting pursuant to said Section 8(a) may determine.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. These +
+securities may not be sold nor may offers to buy be accepted before the time +
+this prospectus is delivered in final form. 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 October 7, 1999
PROSPECTUS
$25,000,000
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
9% Notes due 2004
-----------
The notes will mature on November 30, 2004. Interest on the notes is payable
monthly on the 30th day of each month, beginning December 30, 1999. The notes
are unsecured and rank equally with all of our other unsecured indebtedness. We
will only issue the notes in book-entry form in denominations of $1,000, and
will only sell or exchange them in increments of $5,000 in principal amount. We
intend to list the notes for trading on the Pacific Stock Exchange under the
symbol "MMS04".
If you currently hold our Investment Debentures Series II or III, or our
Installment Debentures Series I, you may exchange your debentures for an equal
principal amount of notes, subject to the limitations and conditions contained
in this prospectus. See "THE EXCHANGE OFFER."
-----------
Investing in the notes involves risks. You should carefully consider the risk
factors beginning on page 11 in this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
-----------
<TABLE>
<CAPTION>
Per Note Total
------------ -------------------
<S> <C> <C>
Public offering price 100% $25,000,000
Underwriting discounts and commissions(/1/) 2.5% to 5.50% $625,000-$1,375,000
Maximum proceeds to Metropolitan (before
expenses)(/2/) 94.5% $23,625,000
</TABLE>
- -----
(1) You will not incur a direct sales charge. Notes earn interest, without
deduction for underwriting discounts or commissions. We will reimburse our
underwriters between 2.5% to 5.50% for commissions, depending on whether
they are sales for cash or exchanges of debentures. See "THE EXCHANGE
OFFER" and "PLAN OF DISTRIBUTION."
(2) The maximum proceeds to Metropolitan is based upon sales of $25,000,000 in
new notes, and no exchanges. We will not receive any new proceeds for notes
that are exchanged for debentures.
-----------
The notes are obligations of Metropolitan and they are not insured or
guaranteed by any governmental agency, any insurance company, any affiliate of
our company or any other person or entity.
We are offering the notes on a best efforts basis with conditions. If the
conditions to the offering are not satisfied by November 30, 1999, the offering
will terminate unless we extend the offering period.
-----------
METROPOLITAN INVESTMENT SECURITIES, INC.
, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
FORWARD-LOOKING STATEMENTS................................................. 2
PROSPECTUS SUMMARY......................................................... 3
RISK FACTORS............................................................... 11
USE OF PROCEEDS............................................................ 11
CONDITIONS TO THE OFFERING AND ALLOCATION OF NOTES......................... 12
DESCRIPTION OF THE NOTES................................................... 13
THE EXCHANGE OFFER......................................................... 18
COMPARISON OF NOTES AND DEBENTURES......................................... 23
FEDERAL INCOME TAX CONSIDERATIONS.......................................... 24
PLAN OF DISTRIBUTION....................................................... 26
LEGAL MATTERS.............................................................. 27
EXPERTS.................................................................... 27
AVAILABLE INFORMATION...................................................... 27
INCORPORATION OF DOCUMENTS BY REFERENCE.................................... 28
</TABLE>
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We based these forward-
looking statements on our current expectations and projections about future
events. These forward-looking statements are subject to risks, uncertainties,
and assumptions about Metropolitan, including:
. Our anticipated growth strategies,
. Anticipated trends in our businesses, including trends in the markets
for insurance, mortgages, annuities and real estate,
. Future interest rate trends, movements and fluctuations,
. Future expenditures for purchasing receivables, and
. Our ability to continue to control costs and accurately price the risk
of default on the payment of receivables.
----------------
You should only rely on the information contained in this prospectus. We
have not, and the placement agent has not, authorized any person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
placement agent is not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate as of the date on the
front cover of this prospectus only. Our business, financial condition, results
of operations and prospects may have changed since that date.
2
<PAGE>
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
This summary is not complete and does not contain all of the information that
you should consider before investing in the notes. You should read both the
prospectus and the attached Annual Report on Form 10-K of the Metropolitan
consolidated group for the fiscal year ended September 30, 1998, and Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1999, carefully
before making your investment decision.
The Metropolitan Consolidated Group Of Companies
General
Metropolitan was incorporated in the State of Washington in January 1953.
Its principal executive offices are located at 601 West 1st Avenue, Spokane,
Washington 99201-5015. Its mailing address is P.O. Box 2162, Spokane,
Washington 99210-2162 and its telephone number is (509) 838-3111. Metropolitan
and its subsidiaries are collectively referred to in this prospectus as the
consolidated group, while the terms "Metropolitan," "we," and "our" refer
solely to the parent company, Metropolitan Mortgage & Securities Co., Inc.
History
Metropolitan's controlling shareholder is C. Paul Sandifur, Jr. Mr. Sandifur
has control through his voting power over a family trust and through his direct
ownership of common stock. See "Item 12" in Metropolitan's Annual Report on
Form 10-K for the year ended September 30, 1998, which is attached to this
prospectus. As a result of Mr. Sandifur's common control, we have several other
affiliates, including Summit Securities, Inc., Old Standard Life Insurance
Company and Old West Annuity & Life Insurance Company. Collectively, these
affiliated companies are referred to as "affiliated companies." The chart on
the next page depicts the relationship of some of the significant companies in
the Metropolitan consolidated group, which excludes affiliated companies that
are not subsidiaries of Metropolitan.
Business
The consolidated group is engaged in a nationwide business of acquiring,
holding, selling and securitizing receivables. These receivables include real
estate contracts and promissory notes that are secured by first position liens
on real estate. The consolidated group also invests in receivables consisting
of real estate contracts and promissory notes secured by second and lower
position liens, structured settlements, annuities, lottery prizes, and other
investments. The receivables secured by real estate are typically non-
conventional because they were either financed by the sellers of the properties
involved or they were originated by institutional lenders who originate loans
for borrowers with impaired credit or for non-conventional properties. In
addition to receivables, the consolidated group invests in other assets,
including U.S. Treasury obligations, corporate bonds and other securities.
The consolidated group's capital to invest in these receivables comes from
several sources. The consolidated group uses funds generated from the sale and
securitization of receivables, collateralized borrowings, receivable cash
flows, the sale of annuities, the sale of debentures, notes and preferred
stock, the sale of real estate, and securities portfolio earnings.
The consolidated group provides services to the affiliated companies for a
fee and engages in various business transactions with the affiliated companies.
Metropolitan provides receivable acquisition services to the affiliated
companies and to our insurance subsidiary, Western United Life Assurance
Company. Metropolitan's wholly owned subsidiary, Metwest Mortgage Services,
Inc., conducts receivable collection and servicing activities for the
affiliated companies, Metropolitan and Western United.
3
<PAGE>
The consolidated group owns various properties acquired through repossession
and other sources. These properties are held for sale and/or development. For a
more detailed discussion of the business of the consolidated group, see "Item
I" in Metropolitan's Annual Report filed on Form 10-K for the year ended
September 30, 1998, which is attached to this prospectus.
Organizational Chart
(as of September 30, 1999)
The chart below lists the consolidated group's principal operating
subsidiaries and their ownership.
[CHART APPEARS HERE]
- --------
* The remaining 3.5% of Consumers Group Holding Co., Inc. is owned by an
affiliated company, Summit Securities, Inc.
Metropolitan Mortgage & Securities Co., Inc.: Parent organization; invests
in receivables and other investments, including real estate development, which
are principally funded by proceeds from receivable investments, other
investments, and securities offerings.
Consumers Group Holding Co., Inc.: A holding company; its sole business
activity is being a shareholder of Consumers Insurance Co., Inc.
Consumers Insurance Co., Inc.: Inactive property and casualty insurer; its
principal business activity is being a shareholder of Western United Life
Assurance Company.
Western United Life Assurance Company: Metropolitan's largest subsidiary and
largest company within the consolidated group; is engaged in investing in
receivables and other investments principally funded by annuity contract sales
and premiums from the sale of life insurance policies.
4
<PAGE>
Metwest Mortgage Services, Inc.: Performs loan origination, collection and
servicing functions. It is an FHA/HUD licensed servicer and lender and is
licensed as a Fannie Mae seller/servicer.
Summary of the Note Offering
Notes offered We are offering up to $25,000,000 in principal amount
of the 9% notes due 2004. The offering will only be
completed if we sell notes for cash and/or exchange
notes for debentures, as described on the following
page, in a total amount of at least $20,000,000 in
principal amount. For a description of the other
conditions to the offering, see "CONDITIONS TO THE
OFFERING".
Issue price We will sell the notes for 100% of their aggregate
principal amount.
Minimum purchase You may only purchase notes in increments of $5,000
in aggregate principal amount, or exchange debentures
in increments of $5,000 for an equivalent principal
amount of notes as described on the following page.
Maturity The notes will mature on November 30, 2004.
Interest We will pay interest on the notes at an annual rate
of 9%, and will make interest only payments monthly
on the 30th day of each month. We will make the first
interest payment on December 30, 1999. Interest on
the notes will begin to accrue on the later of
December 1, 1999, or the closing date of the
offering.
Optional redemption We may, at our option, redeem any or all of the notes
at any time on or after November 30, 2001, by giving
you notice 60 days before the date of redemption. If
we do redeem your notes, we will redeem them for
their face value in minimum amounts of $1,000, or in
any integral multiple of $1,000, plus interest
accrued to the date of redemption.
Market for the notes The notes are newly issued, and therefore there is
not a current trading market for the notes. We intend
to list the notes for trading on Tier I of the
Pacific Exchange, Inc. under the symbol "MMS04".
However, we cannot assure you that an active public
trading market for the notes will develop.
Ranking of the notes The notes are unsecured debt instruments of
Metropolitan, and will rank equal to our debentures
and our other unsecured debt. The notes will rank
junior to any secured debt that we have now, or any
that we issue in the future. At June 30, 1999, we had
outstanding approximately $197,956,000 including
principal and compounded and accrued interest, of
unsecured debenture debt and $156,485,000, including
principal and accrued interest, of collateralized
debt and similar obligations. See "CAPITALIZATION".
Use of proceeds We will use the proceeds from the sales of these
notes to invest in receivables and to make other
investments, which may include investments in
existing subsidiaries, new business ventures or to
acquire
5
<PAGE>
other companies. We may also use the proceeds to
retire maturing debentures, pay preferred stock
dividends, for property development and for general
corporate purposes. We will not receive any proceeds
for notes that are exchanged for debentures. See "USE
OF PROCEEDS".
Risk factors
Your investment in the notes involves some risk. You
should invest in the notes only after reviewing the
risks described in this prospectus. See "RISK
FACTORS" for a discussion of the risks associated
with investing in the notes.
Summary of the Exchange Offer
Exchange offer If you are currently a holder of our debentures,
Investment Debentures Series II or III, or
Installment Debentures Series I, you will have the
option to exchange your debentures for the notes we
are offering through this prospectus. Subject to the
limitations and conditions described under the
heading "THE EXCHANGE OFFER," you will receive an
equal principal amount of notes for all debentures
that you validly tender and we accept. To exchange
your debentures, you must properly tender them to us
and we must accept them. There is a limited amount of
debentures that we will accept. See "THE EXCHANGE
OFFER". The notes will be issued on the terms
described in this prospectus, and may not have the
same terms and interest rates as your debentures. See
"COMPARISON OF NOTES AND DEBENTURES".
Expiration date
The exchange offer will expire at 5:00 p.m., New York
City time, November 30, 1999, unless we decide to
extend the expiration date.
Conditions and priority
of allocation The minimum amount of notes we will issue is
$20,000,000 and the maximum amount of notes that we
will issue in this offering is $25,000,000. If
purchases of notes by investors, together with
investors who desire to exchange their debentures for
notes, exceeds $25,000,000, we intend to sell or
exchange notes in the following order of priority:
(1) first to investors who are purchasing notes and
not exchanging debentures, then (2) to existing
investors who desire to exchange their debentures for
notes, subject to our discretion to accept or reject
any tender for any reason. For a more detailed
description of our intended priority of allocation,
see "CONDITIONS TO THE OFFERING".
Special procedures for
beneficial owners If you are the beneficial owner of debentures and you
registered your debentures in the name of a broker or
other institution, and you wish to participate in the
exchange, you should promptly contact the person in
whose name you registered your debentures and
instruct that person to tender your debentures on
your behalf. If you wish to tender on your own
behalf, you must, before completing and executing the
letter of transmittal and delivering your outstanding
debentures, either make appropriate arrangements to
register ownership of the outstanding debentures in
your name or obtain a properly completed bond power
6
<PAGE>
from the registered holder. The transfer of record
ownership may take considerable time.
Guaranteed delivery
procedure If you wish to tender your debentures and time will
not permit your required documents to reach the
exchange agent by the expiration date, or you cannot
complete the procedure for book-entry transfer on
time or you cannot deliver your certificates for
registered debentures on time, you may tender your
debentures in compliance with the procedures
described in this prospectus under the heading "THE
EXCHANGE OFFER -- How to Use the Guaranteed Delivery
Procedures if You Will Not Have Enough Time to Send
all Documents to us."
Exchange agent Metropolitan Investment Securities, Inc. will act as
the exchange agent for the exchange offer. For
questions relating to the exchange offer, you can
reach them at (509) 835-2210.
Risk factors
Exchanging notes for your debentures involves some
risk. You should exchange notes for your debentures
only after reviewing the risks described in this
prospectus. See "RISK FACTORS" for a discussion of
the risks associated with exchanging notes for your
debentures.
7
<PAGE>
Capitalization
The following table sets forth the capitalization of the consolidated group
at June 30, 1999.
<TABLE>
<CAPTION>
Amount
Class Outstanding
----- ------------
<S> <C>
Debt Payable:
Advances under funding facility with NationsBanc Mortgage
Capital Corp., interest at 5.964% per annum; due on March 24,
2000; collateralized by $113,568,000 in real estate contracts
and mortgage notes............................................ $107,889,322
Reverse repurchase agreements with Donaldson, Lufkin &
Jenrette; interest at 4.93% per annum; due on July 12, 1999;
collateralized by $15,000,000 in U.S. Treasury Bonds.......... 15,168,750
Reverse repurchase agreements with Bear Stearns; interest at 6%
per annum; due July 1, 1999; collateralized by $10,000,000 in
collateralized mortgage obligation (CMO) bonds................ 9,575,000
Note payable to Old Standard Life Insurance Company; interest
at 10.50% per annum; due May 3, 2004; collateralized by Beach
House Restaurant.............................................. 2,542,500
Note payable to U.S. Bank; interest at 6.938% per annum; due
September 30, 1999; collateralized by Metropolitan Financial
Center Building............................................... 10,000,000
Note payable to Summit Securities, Inc., interest at 11.0% per
annum; due on June 30, 2000; collateralized by $11,250,000 in
structured settlement agreements.............................. 9,000,000
Real estate contracts and mortgage notes payable, interest
rates ranging from 3% to 11.6% per annum, due through 2016;
collateralized by senior liens on certain of the Company's
real estate contracts, mortgage notes and real estate held for
sale.......................................................... 1,894,963
Accrued interest payable....................................... 414,307
------------
Total Debt Payable........................................... 156,484,842
------------
Debenture Bonds:
Investment Debentures, Series III maturing in 1999 to 2009, at
5.5% to 11%................................................... 54,159,319
Investment Debentures, Series II maturing in 1999 to 2002, at
5.5% to 11%................................................... 119,485,253
Installment Debentures Series I, maturing in 1999 to 2007 at
7.5% to 10.25%................................................ 173,276
Compound and accrued interest.................................. 24,138,487
------------
Total Debenture Bonds........................................ 197,956,335
------------
Stockholders' Equity:
Preferred Stock................................................ 19,480,420
Common Stock................................................... 293,417
Additional paid-in capital..................................... 20,482,170
Accumulated comprehensive loss................................. (3,459,303)
Retained earnings.............................................. 34,321,749
------------
Total Stockholders' Equity................................... 71,118,453
------------
Total Capitalization......................................... $425,559,630
============
</TABLE>
8
<PAGE>
Summary Consolidated Financial Data
The summary consolidated financial data shown below as of and for the nine
months ended June 30, 1999 and 1998, other than the ratio of earnings to fixed
charges and preferred stock dividends, have been derived from the unaudited
financial statements appearing in Metropolitan's Form 10-Q for the quarter
ended June 30, 1999, which is incorporated in this prospectus by reference and
is attached to this prospectus. The summary consolidated financial data shown
below as of September 30, 1998 and 1997 and for the years ended September 30,
1998, 1997 and 1996, other than the ratio of earnings to fixed charges and
preferred stock dividends, have been derived from, and should be read in
conjunction with, the consolidated financial statements, related notes, and
Management's Discussion and Analysis of Financial Condition and Results of
Operations appearing in Metropolitan's Form 10-K for the year ended September
30, 1998, which is incorporated herein by reference and attached to this
prospectus. The summary consolidated financial data shown below as of September
30, 1996, 1995 and 1994 and for the years ended September 30, 1995 and 1994,
other than the ratio of earning, to fixed charges and preferred stock
dividends, have been derived from the consolidated financial statement not
included elsewhere herein.
<TABLE>
<CAPTION>
Nine Months Ended
June 30, Year Ended September 30,
---------------------- ----------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
(dollars in thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS
OF INCOME DATA:
Revenues................ $ 121,076 $ 118,510 $ 155,955 $ 155,135 $ 156,672 $ 138,107 $ 138,186
========== ========== ========== ========== ========== ========== ==========
Income before minority
interest............... $ 16,391 $ 10,759 $ 10,453 $ 9,791 $ 8,146 $ 6,376 $ 5,702
Income allocated to
minority interests..... (305) (99) (126) (123) (108) (73) (224)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income.............. 16,086 10,660 10,327 9,668 8,038 6,303 5,478
Preferred stock
dividends.............. (2,639) (2,849) (3,732) (4,113) (3,868) (4,038) (3,423)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income applicable to
common stockholders.... $ 13,447 $ 7,811 $ 6,595 $ 5,555 $ 4,170 $ 2,265 $ 2,055
========== ========== ========== ========== ========== ========== ==========
Ratio of earnings to
fixed charges.......... 1.16 2.08 1.75 1.77 1.46 1.35 1.29
Ratio of earnings to
fixed charges and
preferred stock
dividends(1)........... 1.00 1.61 1.37 1.31 1.14 1.03 1.04
PER COMMON SHARE
DATA(2):
Basic and diluted income
per share applicable to
common
stockholders(3)........ $ 103,436 $ 60,085 $ 50,728 $ 42,733 $ 32,073 $ 17,288 $ 14,996
========== ========== ========== ========== ========== ========== ==========
Weighted average number
of common shares
outstanding(2)......... 130 130 130 130 130 131 137
========== ========== ========== ========== ========== ========== ==========
Cash dividends per
common share........... $ 1,800 $ 600 $ 1,200 $ -- $ -- $ 3,800 $ 675
========== ========== ========== ========== ========== ========== ==========
CONSOLIDATED BALANCE
SHEET DATA:
Total assets............ $1,265,056 $1,155,568 $1,226,665 $1,112,389 $1,282,659 $1,078,468 $1,063,290
Debentures, line of
credit advances, other
debt payable and
securities sold, not
owned.................. 354,441 232,059 323,908 190,131 363,427 226,864 261,500
Stockholders' equity.... 71,118 60,942 58,757 54,113 46,343 40,570 32,625
</TABLE>
9
<PAGE>
- --------
(1) The consolidated ratio of earnings to fixed charges and preferred stock
dividends was 1.00, 1.61, 1.37, 1.31, 1.14, 1.03, and 1.04 for the nine
months ended June 30, 1999 and 1998 and the years ended September 30, 1998,
1997, 1996, 1995 and 1994, respectively. Assuming no benefit from the
earnings of its subsidiaries with the exception of direct dividend
payments, the ratio of earnings to fixed charges and preferred dividends
for Metropolitan alone was 1.01, 1.28, 1.10, 1.01, 1.11, 1.05, and 1.34 for
the nine months ended June 30, 1999 and 1998, and the years ended September
30, 1998, 1997, 1996, 1995 and 1994, respectively. The consolidated ratio
of earnings to fixed charges excluding preferred stock dividends was 1.16
and 2.08 for the nine months ended June 30, 1999 and 1998, respectively;
and 1.75, 1.77, 1.46, 1.35, and 1.29 for the years ended September 30,
1998, 1997, 1996, 1995 and 1994, respectively. The ratio of earnings to
fixed charges excluding preferred stock dividends for Metropolitan,
assuming no benefit from the earnings of its subsidiaries with the
exception of direct dividend payments was 1.16, 1.64, 1.40, 1.36, 1.48,
1.40, and 1.36 for the nine months ended June 30, 1999 and 1998, and the
years ended September 30, 1998, 1997, 1996, 1995 and 1994, respectively.
(2) All information retroactively reflects the reverse common stock split of
2,250:1 which occurred during the fiscal year ended September 30, 1994.
(3) Earnings per common share, basic and diluted, are computed by deducting
preferred stock dividends from net income and dividing the result by the
weighted average number of shares of common stock outstanding. There were
no common stock equivalents or potentially dilutive securities outstanding
during any period presented.
10
<PAGE>
RISK FACTORS
When deciding whether or not to purchase the notes or exchange your
debentures for notes, you should carefully consider the risks contained in the
section entitled "BUSINESS OVERVIEW--Factors Affecting Future Operating
Results" of Metropolitan's Annual Report on Form 10-K for the fiscal year ended
September 30, 1998, incorporated into and attached to this prospectus. You
should also consider the following risks associated with an investment in the
notes:
The indenture does not Metropolitan's and your rights and obligations
restrict our ability in the notes are defined in an indenture dated
to incur additional as of October 6, 1999. The indenture does not
debt restrict our ability to issue additional notes
or to incur other debt. We are not required to
maintain any specified financial ratios,
minimum net worth, minimum working capital or a
sinking fund.
The notes are not The notes offered in this prospectus are
insured against the unsecured obligations of Metropolitan and they
risk of loss are not insured or guaranteed by any bank, any
governmental agency, any insurance company, any
affiliate of Metropolitan or any other person
or entity. Thus, the notes have greater risk
than investments that are insured against the
risk of loss.
There is no There is currently no trading market for the
established trading notes. Although we intend to list the notes for
market for the notes trading on Tier I of the Pacific Exchange, we
can not assure you that an active public market
for the notes will develop. You should consider
your needs for liquidity before investing in
the notes.
Possible inability to The State of Washington regulates the amount of
continue selling securities that we can sell under the Debenture
securities Company Act. Under that act, the amount of
securities that can be sold can be, and has
previously been, limited by the State of
Washington. Because of this limitation, we may
be restricted in the amount of securities that
we are able to offer in this offering or in
future offerings. As a result of this offering,
if successfully completed and upon the listing
of the notes for trading on Tier I of the
Pacific Exchange, we anticipate that we may no
longer be subject to some of these regulations
by the State.
USE OF PROCEEDS
If all the notes offered are sold as new sales and none are exchanged, we
expect the maximum proceeds from the offering to total $25,000,000 before
deducting sales commissions and other expenses. We will not receive any new
proceeds for notes exchanged for debentures. Commissions will range from two
and one-half percent (2.5%) to five and one-half percent (5.50%) depending on
whether notes are exchanged for debentures or sold for cash. This will result
in commissions of between $625,000 and $1,375,000, depending on the amount of
debentures exchanged and the amount of notes purchased. Other expenses are
estimated to be $ . We can not assure you that the conditions to the
offering will be satisfied and that the notes will be sold or exchanged.
In conjunction with the other funds available to us through operations
and/or borrowings, we currently plan to utilize the proceeds of this offering
for the following purposes: priority will be given first to (1) funding
investments in receivables and other investments, which may include investments
in existing subsidiaries, the commencement of new business ventures or the
acquisition of other companies, and then to (2) the
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development of real estate we currently hold or acquire in the future. We do
not have any commitments or agreements for material acquisitions. However, the
consolidated group continues to evaluate possible acquisition candidates. To
the extent internally generated funds are insufficient or unavailable for the
retirement of maturing debentures, proceeds of this offering may be used for
retiring maturing debentures, preferred stock dividends and for general
corporate purposes, including debt service and other general operating
expenses. Approximately $51.4 million in principal amount of debt securities
will mature between November 15, 1999 and January 31, 2001 with interest rates
ranging from 5.6% to 9.75% and averaging approximately 8.0% per annum. See
"BUSINESS OVERVIEW--Factors Affecting Future Operating Results" under Item 1 in
our Annual Report on Form 10-K for the year ended September 30, 1998.
We anticipate that some of the proceeds from this offering will be invested
in money market funds, bank repurchase agreements, commercial paper, U.S.
Treasury Bills and similar securities investments while awaiting use as
described above. Since we won't receive any new proceeds for exchanges of
debentures, and because we do not know how many notes will be sold for cash, we
are unable to accurately forecast the total net proceeds generated by this
offering. Therefore, we have not allocated specific amounts for any of the
foregoing purposes.
CONDITIONS TO THE OFFERING AND ALLOCATION OF NOTES
Conditions to the Offering
This offering is conditional upon debenture holders tendering, and us
accepting, together with sales of new notes, at least $20,000,000 in aggregate
principal amount of debentures and new sales of notes. The maximum amount of
notes we will sell for cash or exchange for debentures in this offering is
$25,000,000. You must either exchange debentures and/or purchase notes in an
aggregate principal amount of at least $5,000. We will only sell notes or
exchange debentures for notes in increments of $5,000 in principal amount.
We are making the offering of the notes on the basis that if we do not
receive subscriptions for at least $20 million of notes by November 30, 1999,
unless we extend that period from time to time, which we may do in our sole
discretion, then we will promptly return to you any exchange documents received
or any funds received without interest. While we wait for these conditions to
be satisfied, we will promptly deposit any funds we receive from you in an
escrow account with Bank of America.
If we receive subscriptions for at least $20 million during the period of
our offering described in the prior paragraph, then we may continue to offer
the notes until the end of our offering period or until the end of any
extension period.
Priority of Allocation
If more investors desire to exchange their debentures for the notes or if
more new investors desire to purchase the notes for cash than there are notes
available for us to sell, then we have the discretion to determine in which
order we will sell you our notes or exchange your debentures for notes. If
there is an over subscription, we intend to allocate the notes in the following
order of priority:
. First, to investors making new purchases of notes,
. Then, to investors who are both exchanging debentures and are also
making new purchases of notes in an amount equal to or greater than the
principal and accrued interest on the debentures they are exchanging,
. Then, equally to investors that are only exchanging debentures for notes
and investors who are both exchanging debentures for notes and
purchasing new notes in an amount less than the principal and accrued
interest on the debentures they are exchanging.
We may, in our sole discretion and without notice to you, change the overall
priority we intend to allocate the notes or elect not to follow the above
priority on a case by case basis. For the orders we receive to exchange or
purchase our notes that we do not accept, we will promptly return to you any
exchange documents received or any funds received without interest. If we do
not accept your offer to exchange your debentures for the new notes that we are
offering, then you will continue to be a holder of your debentures and entitled
to receive interest payments as though you had not tendered your debentures for
exchange.
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DESCRIPTION OF THE NOTES
General
The notes will be issued under an indenture dated as of October 6, 1999,
between Metropolitan and U.S. Bank Trust National Association. The following
statements relating to the notes and the indenture are summaries and are not
complete. These summaries are subject to the detailed provisions of the
indenture and are qualified in their entirety by reference to the indenture, a
copy of which is filed as an exhibit to the registration statement that
includes this prospectus and is also available for inspection at the office of
the trustee at 601 Union Street, Suite 2120, Seattle, Washington 98101.
The notes represent unsecured general obligations of our company and will be
issued as global securities in fully registered book-entry form without
coupons. The notes will be sold to the public at 100% of their principal
amount. The notes are not convertible into our capital stock or other
securities.
The notes will not be guaranteed or insured by any governmental agency or by
any other person or entity. The State of Washington regulates the amount of
debt securities we may issue, our debt to equity ratio, some of our investments
and various other aspects of our business. At June 30, 1999, we had outstanding
approximately $197,956,000, including principal and compounded and accrued
interest, of unsecured debenture debt and $156,485,000, including principal and
accrued interest, of collateralized debt and similar obligations. If this
offering is successfully completed and the notes are successfully listed for
trading on Tier I of the Pacific Exchange, we anticipate that we may no longer
be subject to some of these regulations by the State.
Interest and Maturity
The notes will bear interest at an annual rate of 9% commencing on the later
of December 1, 1999, or the closing date of the offering, until they mature or
until we redeem them. Interest payments will be made monthly, on the 30th day
of each month, beginning with the 30th day of the month of the commencement of
the accrual of interest, to the person in whose name a note is registered at
the close of business on the first day of that month. The notes will mature on
November 30, 2004. The notes are not subject to any sinking fund provision.
Optional Redemption
We can redeem the notes, at our option, in whole or in part at any time on
or after November 30, 2001, upon at least 60 days prior written notice. The
redemption price will be equal to 100% of the principal amount of the notes
being redeemed plus accrued interest to the date set for redemption.
If we make a partial redemption of the notes, selection of the notes for
redemption will be made by the trustee on a pro rata basis, by lot or by other
methods as the trustee in its sole discretion shall deem to be fair and
appropriate. No note of less than $1,000 in principal amount will be redeemed
in part. If any note is to be redeemed in part only, the notice of redemption
relating to that note will state the portion of the principal amount of that
note that will be redeemed. In this case, a new note in a principal amount
equal to the unredeemed portion will be issued in the holders name upon
cancellation of the original note.
The Indenture
General. The notes will be issued under the indenture between Metropolitan
and U.S. Bank Trust National Association, as trustee. The indenture does not
restrict our ability to issue additional notes or to incur other debt. The
indenture does not require us to maintain any specified financial ratios,
minimum net worth or minimum working capital. The notes that we are offering
are senior in liquidation only to our outstanding equity securities. They are
subordinate to our collateralized debt and rank equal to our debentures, our
unsecured debt and our unsecured accounts payable and accrued liabilities. You
should not rely on the terms of the indenture for protection of your
investment, but should look rather to our creditworthiness and ability to
satisfy our obligations.
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Merger, Consolidation or Sale of Assets. The indenture provides that we may,
with or without your consent, consolidate with, or sell, lease or convey all or
substantially all of our assets to, or merge with or into, any other entity,
provided that (1) either Metropolitan is the continuing entity, or the
successor entity formed by or resulting from any consolidation or merger or the
entity that received the transfer of the assets shall be an entity organized
and existing under the laws of the United States or a state thereof and the
successor entity shall expressly assume our obligation to pay the principal and
interest on the notes and shall also assume the due and punctual performance
and observance of all the covenants and conditions contained in the indenture;
(2) immediately after giving effect to this transaction and treating any
indebtedness that becomes an obligation of the successor entity, no event of
default under the indenture, and no event that, after notice or the lapse of
time, or both, would become an event of default, shall have occurred and be
continuing; and (3) an officers' certificate and legal opinion covering these
conditions shall be delivered to the trustee.
Existence. The indenture requires us to do or cause to be done all things
necessary to preserve and keep in full force and effect our corporate
existence, material rights and material franchises; provided, however, that we
are not required to preserve any right or franchise if our Board of Directors
determines that the preservation is no longer desirable in the conduct of our
business.
Maintenance of Properties. The indenture requires us to cause all of our
material properties used or useful in our business or the business of any
subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment. It also requires us to cause
all necessary repairs, renewals, replacements, betterments and improvements to
be made, all as in our judgment may be necessary so that our business may be
properly and advantageously conducted at all times; provided, however, that we
and our subsidiaries are not prevented from selling or otherwise disposing of
our properties for value in the ordinary course of business.
Insurance. The indenture will require us and our subsidiaries to keep in
force upon all of our properties and operations policies of insurance carried
with responsible companies in amounts and covering all risks as are customary
in the industry and customary with prevailing market conditions and
availability.
Payment of Taxes and Other Claims. The indenture requires us to pay or
discharge or cause to be paid or discharged, before delinquent, (1) all taxes,
assessments and governmental charges levied or imposed on us or any of our
subsidiaries or on our income, profits or property and (2) all lawful claims
for labor, materials and supplies that, if unpaid, might by law become a lien
upon our or our subsidiaries' property; provided, however, that the we are not
required to pay or discharge any tax, assessment, charge or claim where the
amount, applicability or validity of which is being contested in good faith by
appropriate proceedings.
Provision of Financial Information. The indenture requires us, within 15
days after each of the respective dates by which we are required to file annual
reports, quarterly reports and other documents with the SEC, (1) to transmit by
mail to all note holders, as their names and addresses appear in the applicable
register, without cost to the note holders, summaries of the annual reports,
quarterly reports and other documents that we file with the SEC under Section
13 or 15(d) of the Securities Exchange Act of 1934, (2) to file with the
trustee copies of the annual reports, quarterly reports and other documents
that we file with the SEC under Section 13 or 15(d) of the Securities Exchange
Act, and (3) to supply, promptly upon written request and payment of the
reasonable cost of duplication and delivery, copies of these documents to any
prospective note holder.
Modification of the Indenture. Note holders' rights may be modified with the
consent of the holders of a majority in aggregate principal amount outstanding
of the notes. In general, no adverse modification of the terms of payment and
no modifications reducing the percentage of notes required for modification can
be made without the consent of each note holder affected by that amendment.
Events of Default, Notice and Waiver. The following events will be an "event
of default" under the indenture:
. A default for 30 days in the payment of any installment of interest;
. A default in the payment of the principal at maturity;
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. A default in the performance or breach of selected covenants or
warranties of Metropolitan contained in the indenture which continues
for 60 days after written notice;
. A default under any bond, debenture, note, mortgage, indenture or other
instrument or other evidence of indebtedness for money borrowed by
Metropolitan or any of its subsidiaries, in an aggregate principal
amount in excess of $10 million, whether this indebtedness currently
exists or is subsequently created; or
. In some events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of Metropolitan or any
of its significant subsidiaries.
If an event of default under the indenture occurs and is continuing, then
the trustee or the holders of not less than 25% in principal amount of the
outstanding notes may declare the principal amount of all the notes to be due
and payable immediately by written notice to Metropolitan and the trustee.
However, at any time after a declaration of acceleration with respect to the
notes has been made, but before a judgment or decree for payment of the money
due has been obtained by the trustee, the holders of not less than a majority
of the principal amount of the outstanding notes may rescind and annul the
declaration and its consequences if (1) Metropolitan deposits with the trustee
all required payments of principal and overdue interest on the notes, plus any
applicable fees, expenses, disbursements and advances of the trustee, and (2)
all events of default, other than the nonpayment of accelerated principal, or
specified portion of principal, has been cured or waived as provided in the
indenture. The indenture also provides that the holders of not less than a
majority in principal amount of the outstanding notes may waive any past
default and its consequences, except a default (a) in the payment of the
principal or interest on the notes or (b) in respect of a covenant or provision
contained in the indenture that cannot be modified or amended without the
consent of the holder of each outstanding note.
The indenture requires the trustee to give notice to the note holders within
90 days of a default under the indenture unless the default is cured or waived;
provided, however, that the trustee may withhold notice to the note holders if
specified responsible officers of the trustee consider the withholding of
notice to be in the note holders' interest, except for a default in the payment
of the principal or interest on any note.
The indenture provides that no note holders may institute any proceedings,
judicial or otherwise, with respect to the indenture or for any remedy in the
indenture, except in the case of failure of the trustee, for 60 days, to act
after (1) it has received a written request to institute proceedings in respect
of an event of default from the holders of not less than 25% in principal
amount of the outstanding notes, (2) it has received an offer of indemnity
reasonably satisfactory to the trustee, and (3) no contrary directions from the
holders of more than 50% of the outstanding notes have been received by the
trustee. This provision will not prevent, however, any note holder from
instituting suit for the enforcement of payment of the principal and interest
on the notes at the respective due dates.
The indenture provides that the trustee is under no obligation to exercise
any of its rights or powers under the indenture at the request or direction of
any note holders, unless these holders offer to the trustee reasonable security
or indemnity. The holders of not less than a majority in principal amount of
the outstanding notes have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee, or of
exercising any trust or power conferred upon the trustee. The trustee may,
however, refuse to follow any direction that is in conflict with any law or the
indenture or that may involve the trustee in personal liability or that may be
unduly prejudicial to the note holders not joining therein.
Book-Entry System
The notes will be issued in the form of a global security, which is a single
fully registered note in book-entry form, which will be deposited with, or on
behalf of, The Depository Trust Company ("DTC") and registered in the name of
DTC or its nominee. Unless and until it is exchanged in whole or in part for
the individual notes represented thereby, a global security may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC
to DTC or another nominee of DTC or by DTC or any nominee to a successor
depository or any nominee of the successor.
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So long as DTC or its nominee is the registered owner of a global security,
DTC or its nominee, as the case may be, will be considered the sole owner or
holder of the notes represented by a global security for all purposes under the
indenture and the beneficial owners of the notes will be entitled only to those
rights and benefits afforded to them in compliance with DTC's regular operating
procedures. Except as provided below, owners of a beneficial interest in a
global security will not be entitled to have any of the individual notes
registered in their names, will not receive or be entitled to receive physical
delivery of any of these notes in definitive form and will not be considered
the owners or holders of these notes under the Indenture. The laws of some
states require that some purchasers of securities take physical delivery of
those securities in definitive form. These laws may impair the ability to
transfer beneficial interests in a global security.
If any of the following occur, we will issue individual notes in
certificated form in exchange for a global security:
. DTC is at any time unwilling or unable to continue as depository or if
at any time DTC ceases to be a clearing agency registered under the
Securities Exchange Act, and we do not appoint a successor depository
within 90 days;
. an event of default under the indenture with respect to the notes has
occurred and is continuing and the beneficial owners representing a
majority in principal amount of the notes represented by a global
security advise DTC to cease acting as depository; or
. we, in our sole discretion, determine at any time that the notes shall
no longer be represented by a global security.
In any of these instances, an owner of a beneficial interest in a global
security will be entitled to physical delivery of individual notes in
certificated form of like tenor, equal in principal amount to the beneficial
interest and to have the notes in certificated form registered in its name.
Notes so issued in certificated form will be issued in denominations of $1,000
or any integral multiple of $1,000, and will be issued in registered form only,
without coupons.
DTC has advised us of the following information regarding DTC:
DTC is:
. a limited-purpose trust company organized under the New York Banking
Law;
. a "banking organization" within the meaning of the New York Banking Law;
. a member of the Federal Reserve System;
. a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
. a "clearing agency" registered under the provisions of Section 17A of
the Securities Exchange Act.
DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among its participants of securities transactions,
like transfers and pledges, in deposited securities through electronic
computerized book-entry changes in its participants' accounts, thereby
eliminating the need for physical movement of securities certificates.
Direct participants of DTC include securities brokers and dealers, banks,
trust companies, clearing corporations and other organizations. DTC is owned by
a number of its direct participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others like
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the SEC.
Purchases of notes under the DTC system must be made by or through direct
participants, which will receive a credit for the notes on DTC's records. The
ownership interest of each actual purchaser of each note, or a beneficial
owner, is in turn recorded on the direct and indirect participants' records. A
beneficial owner does not receive written confirmation from DTC of its
purchase, but the beneficial owner is expected to receive a written
confirmation providing details of the transaction, as well as periodic
statements of its holdings, from the direct or indirect participant through
which the beneficial owner entered into the transaction.
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Transfers of ownership interests in the notes are accomplished by entries
made on the books of participants acting on behalf of beneficial owners.
Beneficial owners do not receive certificates representing their ownership
interests in notes, unless use of the book-entry system for the notes is
discontinued.
To facilitate subsequent transfers, the notes are registered in the name of
DTC's partnership nominee, Cede & Co. The deposit of the notes with DTC and
their registration in the name of Cede & Co. effects no change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners of the notes.
DTC records reflect only the identity of the direct participants to whose
accounts notes are credited, which may or may not be the beneficial owners. The
participants remain responsible for keeping account of their holdings on behalf
of their customers.
Delivery of notices and other communications by DTC to direct participants,
by direct participants to indirect participants, and by direct participants and
indirect participants to beneficial owners are governed by arrangements among
them, subject to any statutory or regulatory requirements as may be in effect
from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the notes
represented by a global security are to be redeemed, DTC's practice is to
determine by lot the amount of the interest of each direct participant to be
redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the notes.
Under its usual procedures, DTC mails a proxy (an "omnibus proxy") to the
issuer as soon as possible after the record date. The omnibus proxy assigns
Cede & Co.'s consenting or voting rights to those direct participants to whose
accounts the notes are credited on the record date, which are identified on a
list attached to the omnibus proxy.
Metropolitan will provide the funds for the payment of principal and
interest payments on the notes to the trustee and the trustee will pay
principal and interest on the notes to DTC. DTC's practice is to credit direct
participant's accounts on the payable date in proportion to their respective
holdings as shown on DTC's records unless DTC has reason to believe that it
will not receive payment on the payable date. Payments by participants to
beneficial owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of
that participant and not of DTC, the trustee or Metropolitan, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of Metropolitan
or the trustee. Disbursement of payments to direct participants is the
responsibility of DTC, and disbursement of the payments to the beneficial
owners is the responsibility of direct and indirect participants.
DTC may discontinue providing its services as securities depository with
respect to the notes at any time by giving reasonable notice to Metropolitan or
the trustee. Under these circumstances, if a successor securities depository is
not appointed, note certificates are required to be printed and delivered.
We may decide to discontinue use of the system of book-entry transfers
through DTC, or a successor securities depository. In that event, note
certificates will be printed and delivered.
None of Metropolitan, the trustee, any paying agent, the security registrar
or the underwriters will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in a global security for any notes or for maintaining, supervising or
reviewing any records relating to beneficial ownership interests or for any
other aspect of the relationship between DTC and its participants or the
relationship between the participants and the owners of beneficial interests in
a global security owned through those participants.
Interest, Registration and Transfer
The principal and interest on the notes will be payable at the trustee's
corporate trust office at 601 Union Street, Suite 2120, Seattle, Washington
98101; provided, however, that, at our option, payment of interest may be made
by check mailed to the address of the person entitled thereto as it appears in
the applicable register for the notes or by wire transfer of funds to that
person at an account maintained within the United States.
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Subject to limitations imposed on the notes in the indenture, and if the
notes are no longer a global security, the notes will be exchangeable for any
authorized denomination of notes of the same series and of a like aggregate
principal amount and tender upon surrender of a note or notes at the trustee's
corporate trust office or at the applicable office of any designated agent of
Metropolitan. In addition, subject to limitations imposed on the notes in the
indenture, the notes may be surrendered for registration of transfer at the
trustee's corporate trust office or at the applicable office of any designated
agent of Metropolitan. Every note surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer and evidence of title and identity satisfactory to the trustee,
Metropolitan, or its transfer agent, as applicable. No service charge will be
made for any registration of transfer or exchange of any note. However, with
some exceptions, we may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with the transfer.
Neither Metropolitan nor the trustee shall be required to (1) issue,
register the transfer of or exchange any notes during a period beginning at the
opening of business 15 days before the day of mailing of notice of redemption
of any note selected for redemption and ending at the close of business on the
day of mailing the relevant notice of redemption; or (2) register the transfer
of or exchange any note, or portion of a note, selected for redemption, in
whole or in part, except the unredeemed portion of any note being redeemed in
part.
THE EXCHANGE OFFER
How to Determine if You Are Eligible to Participate in the Exchange Offer
We are offering to exchange, upon the terms and subject to the conditions
contained in this prospectus and in the letter of transmittal accompanying it,
$1,000 in principal amount of notes for each $1,000 in principal amount and
accrued interest of our debentures, Investment Debentures Series II and III, or
Installment Debentures Series I, that you hold. You must exchange at least
$5,000 in aggregate amounts of principal and accrued interest of debentures to
participate in the exchange offer. You may tender cash in addition to your
debentures to meet the $5,000 minimum, or additional $5,000 increment. We will
only exchange debentures in increments of $5,000 in principal amount. The terms
of the notes are not the same as the terms of the debentures you may exchange
in this exchange offer. For a description of the terms of the notes you may
receive, see "DESCRIPTION OF THE NOTES". For a description of some of the
differences between the notes and your debentures, see "COMPARISON OF NOTES AND
DEBENTURES".
We are not making the exchange offer to, nor will we accept surrenders for
exchange from, holders of outstanding debentures in any jurisdiction in which
this exchange offer or the acceptance of a debenture for exchange would not be
in compliance with the securities or blue sky laws of that jurisdiction.
If you are a broker-dealer that resells notes that you received for your own
account in the exchange offer, and if you participate in a distribution of the
notes, you may be an "underwriter" within the meaning of the Securities Act and
any profit on any resale of notes and any commissions or concessions you
receive may be underwriting compensation under the Securities Act. If you are a
broker-dealer who acquires debentures as a result of market-making or other
trading activities, you may use this prospectus, as supplemented or amended, in
connection with resales of the notes. We have agreed that, for a period of one
year after we consummate the exchange offer, we will make this prospectus
available to any broker-dealer for use in connection with any resale. If you
tender debentures in the exchange offer for the purpose of participating in a
distribution of the notes, or if you cannot rely upon these interpretations,
you must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction to sell
your notes.
If you are tendering debentures, we will not require you to pay brokerage
commissions or fees or, subject to the instructions in the letter of
transmittal, transfer taxes with respect to the exchange of the debentures in
the exchange offer.
Maturing Debentures and Partial Tenders
If you are the holder of a debenture that matures between the date of this
prospectus and the expiration date of the offering, and wish to purchase new
notes instead of receiving the principal amount due on maturity
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of you debenture, you will, for purposes of the offering, be deemed to be
exchanging your debenture for notes. If there is an over subscription of the
offering, you will be placed on even priority as other investors who wish to
exchange their debentures as described above. If you do elect to exchange your
maturing debentures for notes, you will not earn any interest on the debenture
for the period beginning immediately after the maturity date of your debenture
and before the date when interest begins to accrue on the notes.
You may elect to exchange part of a debenture for notes. You must exchange
debentures in increments of $5,000 in aggregate amounts of principal and
accrued interest. If you elect to exchange only part of a debenture, a new
debenture will be issued for the portion of the old debenture that is not being
exchanged. No new debentures will be issued in denominations of less than $100.
Information About the Expiration Date of the Exchange Offer and Changes to It
The exchange offer expires on the expiration date, which is 5:00 p.m., New
York City time, on November 30, 1999, unless we, in our sole discretion, extend
from time to time the period the exchange offer is open. If we extend the
period for the exchange offer, the term "expiration date" means the latest time
and date the exchange offer, as so extended, expires. We reserve the right to
extend the exchange offer at any time and from time to time before the
expiration date by giving written notice to Metropolitan Investment Securities,
Inc., which is the exchange agent, and by timely public announcement
communicated by no later than 5:00 p.m. on the next business day following the
expiration date, unless applicable law or regulation requires otherwise, by
making a release to the Dow Jones News Service. During any extension of the
exchange offer, all debentures previously tendered in the exchange offer will
remain subject to the exchange offer.
The exchange date will be the first business day following the expiration
date of the offering. We expressly reserve the right to terminate the exchange
offer and not accept for exchange any debentures for any reason, including if
any of the events listed below under "--We may modify or terminate the exchange
offer under some circumstances" have occurred and we have not waived them. We
also reserve the right to amend the terms of the exchange offer in any manner,
whether before or after any tender of the debentures. If we terminate or amend
the exchange offer, we will notify the exchange agent in writing and will
either issue a press release or give written notice to you as a holder of the
debentures as promptly as practicable. Unless we terminate the exchange offer
before 5:00 p.m., New York City time, on the expiration date, we will exchange
the notes for debentures on the exchange date if the conditions to the offering
are satisfied.
We will mail this prospectus and the related letter of transmittal and other
relevant materials to you as a record holder of debentures and we will furnish
these items to brokers, banks and similar persons whose names, or the names of
whose nominees, appear on the lists of holders for subsequent transmittal to
beneficial owners of debentures.
How to Tender Your Debentures
If you tender any of your debentures to us by complying with one of the
procedures below, that tender will constitute an agreement between you and us
under the terms and subject to the conditions that we describe below and in the
letter of transmittal for the exchange offer.
You may tender debentures by properly completing and signing the letter of
transmittal or a facsimile of it. All references in this prospectus to the
"letter of transmittal" include a facsimile of the letter. You must deliver it,
together with the certificate or certificates representing the debentures that
you are tendering and any required signature guarantees, or a timely
confirmation of a book-entry transfer in compliance with the procedure that we
describe below, to the exchange agent at Metropolitan Investment Securities,
Inc., 601 West First Avenue, Department 141000, Spokane, Washington 99201, on
or before the expiration date. You may also tender debentures by complying with
the guaranteed delivery procedures that we describe below.
Your signature does not need to be guaranteed if you registered your
debentures in your name, you will register the notes in your name and you sign
the letter of transmittal. In any other case, the registered holder of
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<PAGE>
your debentures must endorse them or send them with duly executed written
instruments of transfer in form satisfactory to us. Also, we may, in our
discretion, require an "eligible institution," like a bank, broker, dealer,
credit union, savings association, clearing agency or other institution that is
a member of a recognized signature guarantee medallion program within the
meaning of Rule 17Ad-15 under the Securities Exchange Act, to guarantee the
signature on the endorsement or instrument of transfer.
If your debentures are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and you wish to tender
debentures, you should contact the registered holder promptly and instruct the
holder to tender debentures on your behalf. If you wish to tender your
debentures yourself, you must, before completing and executing the letter of
transmittal and delivering your debentures, either make appropriate
arrangements to register ownership of the debentures in your name or follow the
procedures described in the immediately preceding paragraph. Transferring
record ownership from someone else's name to your name may take considerable
time.
How to Tender if You Hold Your Debentures Through a Broker or Other Institution
and You Do Not Have the Actual Debentures
If you will not be able to send all the exchange documents on time, you can
still tender your debentures by using the guaranteed delivery procedures
described below.
You assume the risk of choosing the method of delivery of your debentures
and all other documents. If you send your debentures and your documents by
mail, we recommend that you use registered mail, return receipt requested, you
obtain proper insurance, and you mail these items sufficiently in advance of
the expiration date to permit delivery to the exchange agent on or before the
expiration date.
If you do not provide your taxpayer identification number, which is your
social security number or employer identification number, as applicable, and
certify that the number is correct, the exchange agent will withhold 31% of the
gross proceeds otherwise payable to you in the exchange offer, unless an
exemption applies under the applicable law and regulations concerning "backup
withholding" of federal income tax. You should complete and sign the main
signature form and the Substitute Form W-9 included as part of the letter of
transmittal, so as to provide the information and certification necessary to
avoid backup withholding, unless an applicable exemption exists and you prove
it in a manner satisfactory to us and the exchange agent.
How to Use the Guaranteed Delivery Procedures if You Will Not Have Enough Time
to Send All Documents to Us
If you desire to tender your debentures, and time will not permit a letter
of transmittal, a book-entry transfer or debentures to reach the exchange agent
before the expiration date, you may tender your debentures if the exchange
agent has received at its office listed on the letter of transmittal on or
before the expiration date a letter, telegram or facsimile transmission from an
eligible institution setting forth: your name and address, the principal amount
of the debentures that you are tendering, the names in which you registered the
debentures and, if possible, the certificate numbers of the debentures that you
are tendering.
The eligible institution's correspondence to the exchange agent must state
that the correspondence constitutes the tender and guarantee that within three
New York Stock Exchange trading days after the date that the eligible
institution executes the correspondence, the eligible institution will deliver
the debentures, or a book-entry transfer, in proper form for transfer, together
with a properly completed and duly executed letter of transmittal and any other
required documents. We may, at our option, reject the tender if you do not
tender your debentures and accompanying documents by either the above-described
method or by a timely book-entry confirmation, and if you do not deposit your
debentures and tender documents with the exchange agent within the time period
stated above. Copies of a notice of guaranteed delivery that eligible
institutions may use for the purposes described in this paragraph are available
from the exchange agent.
Valid receipt of your tender will occur as of the date when the exchange
agent receives your properly completed letter of transmittal, accompanied by
either the debentures or a timely book-entry confirmation. We will
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<PAGE>
issue notes in exchange for debentures that you tendered with a notice of
guaranteed delivery or correspondence to similar effect as described above by
an eligible institution only against deposit of the letter of transmittal, any
other required documents and either the tendered debentures or a timely book-
entry confirmation.
We Reserve the Right to Determine Validity of All Tenders
We will be the sole judge of all questions as to the validity, form,
eligibility, including time of receipt, and acceptance for exchange of your
tender of debentures and our judgment will be final and binding. We reserve the
absolute right to reject any or all of your tenders that are not in proper form
or the acceptances for exchange of which may, in the opinion of our counsel, be
unlawful. We also reserve the absolute right to waive any of the conditions of
the exchange offer or any defect or irregularities in tenders of any particular
holder whether or not we waive similar defects or irregularities in your case.
Neither we, the exchange agent nor any other person will be under any duty to
give you notification of any defects or irregularities in tenders nor shall any
of us incur any liability for failure to give you any notification. Our
interpretation of the terms and conditions of the exchange offer, including the
letter of transmittal and its instructions, will be final and binding.
To Participate, You Must Complete the Letter of Transmittal Certifying
Information About Yourself
By tendering debentures and executing the letter of transmittal, you certify
the following:
. you are not our "affiliate";
. you are not a broker-dealer that owns debentures you acquired directly
from us or our affiliate; and
. you are acquiring the notes we are offering in this prospectus in the
ordinary course of your business and that you have no arrangement with
any person to participate in the distribution of the notes.
If you cannot certify the foregoing, you may certify that you are an affiliate
of us or of the initial purchasers of the debentures, and you will comply with
the registration and prospectus delivery requirements of the Securities Act to
the extent applicable to you.
By tendering debentures for exchange, you will exchange, assign and transfer
the debentures to us and irrevocably appoint the exchange agent as your agent
and attorney-in-fact to assign, transfer and exchange the debentures. You will
also represent and warrant that you have full power and authority to tender,
exchange, assign and transfer the debentures and to acquire notes issuable upon
the exchange of your tendered debentures. The letter of transmittal requires
you to agree that, when we accept your debentures for exchange, we will acquire
good and unencumbered title to them, free and clear of all liens, restrictions,
charges and encumbrances and that they are not subject to any adverse claim.
You will also warrant that you will, upon our request, execute and deliver
any additional documents that we believe are necessary or desirable to complete
the exchange, assignment and transfer of your tendered debentures. All
authority conferred by you will survive your death or incapacity and every
obligation of you shall be binding upon your heirs, legal representatives,
successors, assigns, executors and administrators.
How We Will Either Exchange Your Debentures for Notes or Return Them to You
On the exchange date, we will determine which debentures the holders validly
tendered and we will issue notes in exchange for the validly tendered
debentures that we accept for exchange. The exchange agent will act as your
agent for the purpose of receiving notes from us and registering the notes in
your name promptly after acceptance of the tendered debentures. If we do not
accept your debentures for exchange, we will return them without expense to you
promptly following the expiration of the exchange offer. If we do not accept
your debentures and return them to you, they will retain the same terms as they
had immediately before your tender. Interest will continue to accrue on your
debentures while they are being held in escrow by the exchange agent.
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<PAGE>
We May Modify or Terminate the Exchange Offer Under Some Circumstances
We are not required to issue notes in respect of any properly tendered
debentures that we have not previously accepted. We may terminate the exchange
offer or, at our option, we may modify or otherwise amend the exchange offer.
If we terminate the exchange offer, it will be by oral or written notice to the
exchange agent and by timely public announcement communicated no later than
5:00 p.m. on the next business day following the expiration date, unless
applicable law or regulation requires otherwise, by making a release to the Dow
Jones News Service. We may terminate the exchange offer in the following
circumstances:
. Any court or governmental agency brings a legal action seeking to
prohibit the exchange offer or assessing or seeking any damages as a
result of the exchange offer, or resulting in a material delay in our
ability to accept any of the debentures for exchange; or
. Any government or governmental authority, domestic or foreign brings or
threatens any law or legal action that in our sole judgment, might
directly or indirectly result in any of the consequences referred to
above; or, if in our sole judgment, this activity might result in the
holders of notes having obligations with respect to resales and
transfers of notes that are greater than those we described above in the
interpretations of the staff of the SEC or would otherwise make it
inadvisable to proceed with the exchange offer; or
. A material adverse change has occurred in our business, condition,
financial or otherwise, operations or prospects.
The foregoing conditions are for our sole benefit and we may assert them
with respect to all or any portion of the exchange offer regardless of the
circumstances giving rise to the condition. We also reserve the right to waive
these conditions in whole or in part at any time or from time to time in our
discretion. Our failure at any time to exercise any of the foregoing rights
will not be a waiver of any right, and each right will be an ongoing right that
we may assert at any time or from time to time. In addition, we have reserved
the right, notwithstanding the satisfaction of each of the foregoing
conditions, to terminate or amend the exchange offer.
Any determination by us concerning the fulfillment or nonfulfillment of any
conditions will be final and binding upon all parties.
In addition, we will not accept for exchange any tendered debentures, and we
will not issue notes in exchange for any debentures, if at that time there is,
or the SEC has threatened, any stop order with respect to the registration
statement that this prospectus is a part of, or if qualification of the
indenture is required under the Trust Indenture Act of 1939, and has not been
so qualified.
Where to Send Your Documents For the Exchange Offer
We have appointed Metropolitan Investment Securities, Inc. as the exchange
agent for the exchange offer. You must send your letter of transmittal to the
exchange agent at:
Metropolitan Investment Securities, Inc.
601 West First Avenue
Spokane, Washington 99201-5015
Telephone: (509) 835-2210
Facsimile: (509) 835-2767
Attention: Exchange Agent
If you send your documents to any other address or fax number, you will not
have validly delivered them and you will not receive notes in exchange for your
debentures. We will return your debentures to you.
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<PAGE>
We Are Paying Our Costs For the Exchange Offer
We have retained Metropolitan Investment Securities, Inc., one of our
affiliates, to act as a dealer-manager and the exchange agent in connection
with the exchange offer and will pay them a commission of 2.5% to 2.75% of the
principal amount of debentures exchanged, plus reimbursement of reasonable out-
of-pocket expenses. We will also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses that they incur
in forwarding tenders for their customers. We will pay the expenses incurred in
connection with the exchange offer, including the fees and expenses of the
exchange agent and printing, accounting, investment banking and legal fees. We
estimate that these fees are approximately $ . See "PLAN OF DISTRIBUTION".
No person has been authorized to give you any information or to make any
representations to you in connection with the exchange offer other than those
that this prospectus contains. If anyone else gives you information or
representations about the exchange offer, you should not rely upon that
information or representation or assume that we have authorized it. Neither the
delivery of this prospectus nor any exchange made hereunder shall, under any
circumstances, create any implication that there has been no change in our
affairs since the respective dates as of which this prospectus gives
information.
We are not making the exchange offer to, nor will we accept tenders from or
on behalf of, holders of debentures in any jurisdiction in which it is unlawful
to make the exchange offer or to accept it. However, we may, at our discretion,
take action as we may deem necessary to make the exchange offer in any
jurisdiction and extend the exchange offer to holders of debentures in those
jurisdictions. In any jurisdiction where the securities laws or blue sky laws
require a licensed broker or dealer to make the exchange offer one or more
registered brokers or dealers that are licensed under the laws of that
jurisdiction is making the exchange offer on our behalf.
Holders of debentures will not have dissenters' rights or appraisal rights
in connection with the exchange offer.
COMPARISON OF NOTES AND DEBENTURES
The following is a brief summary of some of the differences and similarities
between the notes we are offering in this prospectus and the debentures that
you may currently own. For a more detailed description of the notes, see
"DESCRIPTION OF THE NOTES". The table below lists some of the provisions of our
outstanding debentures in general. For a more detailed description of the terms
of your debentures, see the provisions of your debentures as they are described
in the physical certificates representing your debentures.
<TABLE>
<CAPTION>
Notes Debentures
------------------------ ------------------------------------
<C> <S> <C>
Maturity dates............... The notes will mature on The debentures have a maturity
November 30, 2004. date between 1999 and 2009,
depending on the series and type
of debentures and the date
originally purchased.
Interest rates and payments.. Interest only payments Interest payments on the
will be made monthly at debentures range from monthly,
an annual rate of 9%. quarterly, annually, to only
payable at maturity. The Installment
Debentures also make amortizing
payments of principal and interest.
Interest rates on the debentures
range from 5.5% to 11%.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Notes Debentures
------------------------ ----------------------------------------
<C> <S> <C>
Conversion......................... The notes are not The debentures are not convertible
convertible into any into any other security of Metropolitan.
other security of
Metropolitan.
Optional redemption by the issuer.. We may redeem the notes The debentures are not
at any time on or after redeemable by Metropolitan.
November 30, 2001.
Ranking............................ The notes will rank The debentures rank equally with
equally with our the notes and our other unsecured debt.
debentures and our other
unsecured debt.
Voting Rights...................... Amendments to the Amendments to the indenture that
indenture or the terms relate to the debentures or the terms
of the notes may be made of any series of debentures may be
in most cases with the made in most cases with the consent
consent of the holders of the holders of 66 2/3% in
of a majority in principal amount outstanding
principal amount of the series affected by the amendment.
outstanding.
Listing and trading................ Intended to be listed Not listed for trading on a
for trading on Tier I of securities exchange.
the Pacific Exchange.
</TABLE>
FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of some of the federal income tax
consequences to persons exchanging their debentures for notes or making new
purchases of notes for cash in this offering. The discussion contains some of
the tax consequences to investors in this offering, but does not deal with all
aspects of federal taxation, or with any aspect of state, local or foreign
taxation that may be relevant to investors in light of their personal
investment and tax circumstances. Some investors, including insurance
companies, tax-exempt organizations, financial institutions, broker-dealers,
foreign corporations, persons who are not citizens or residents of the United
States and qualified employee benefit plans under the Employee Retirement
Income Security Act of 1974, or tax-qualified retirement plans and individual
retirement accounts under the Internal Revenue Code of 1986 (the "Code"), may
be subject to special rules not discussed below. Debenture holders desiring to
tender their debentures for notes are advised to consult with their own tax
advisors regarding the federal, state, local and foreign tax consequences which
could result therefrom. Furthermore, all potential holders of notes should
consult with their own tax advisors regarding the federal, state, local and
foreign tax consequences of acquiring, holding and disposing of the notes.
Metropolitan believes that the notes should be characterized as debt for
federal income tax purposes. The following discussion makes the same
assumption.
Exchange of Debentures
Generally, the amount of gain or loss that will be recognized upon the
exchange of debentures for notes will be equal to the difference between (1)
the fair market value of the notes received and (2) the adjusted basis of the
debentures surrendered increased by any original issue discount or market
discount previously included in income by the holder. See discussions of
Original Issue Discount and Market Discount below. Therefore, assuming a
debenture holder's basis in his debentures is equal to the fair market value of
the notes he receives, the holder should not recognize gain as a result of the
exchange. In the event a debenture holder acquired them at a market discount
that has not been previously taken into income, or his basis therein is
otherwise less than the fair market value of the notes received, the holder
likely will recognize gain upon the exchange.
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<PAGE>
Stated Interest
Under general federal income tax principles, holders of notes must include
stated interest in income in accordance with their method of tax accounting.
Accordingly, holders of notes using the accrual method of tax accounting must
include stated interest in income as it accrues and holders of notes using the
cash method of tax accounting must include stated interest in income as it is
actually or constructively received.
Payments of interest to taxable holders of notes will constitute portfolio
income for purposes of Section 469 of the Code and not passive activity income.
Accordingly, this income will not be subject to reduction by losses from
passive activities (e.g., any interest in a trade or business held as a limited
partner or other arrangements in which the holders of notes do not materially
participate) of holders of notes who are subject to the passive activity loss
rules. However, income attributable to interest payments may be offset by
investment expense deductions, subject to the limitation that individual
investors may only deduct miscellaneous itemized deductions, including
investment expenses, to the extent these deductions exceed two percent of the
investor's adjusted gross income.
Holding Period of Notes
For purposes of determining whether gain or loss on the disposition of the
note is long term or short term capital gain or loss, the holding period of the
notes begins with the date the notes are issued in connection with the
offering.
Disposition of the Notes
On the sale, redemption or other disposition of the notes, the holder will
recognize gain or loss measured by the difference between (1) the amount of
cash and the fair market value of the property received and (2) the holder's
tax basis in the notes sold, exchanged or otherwise disposed of, increased by
any original issue discount or market discount previously included income by
the holder. See discussions of Original Issue Discount and Market Discount
below. Provided that the notes are issued for cash at par or are exchanged for
debentures at par, a holder's basis in the notes will be equal to the original
principal amount of the notes received. Subject to the market discount and bond
premium rules discussed below, the gain or loss from disposition of the notes
will be a capital gain or loss, provided the notes were held as a capital
asset, and will be long term gain or loss if the notes were held for more than
one year.
Original Issue Discount
Original issue discount is generally defined as the excess of a debt
instrument's stated redemption price at maturity over its issue price, subject
to a statutorily-defined de minimis exception, generally one-quarter of 1% of
the debt instrument's stated redemption price at maturity multiplied by the
number of complete years to maturity from its issue date. The "stated
redemption price at maturity" of a debt instrument is generally the sum of the
debt instrument's stated principal amount plus all other payments required
thereunder, other than payments of "qualified stated interest," generally,
stated interest that is unconditionally payable in cash at least annually at a
single fixed rate that equals or exceeds a published federal rate. The "issue
price" of a debt instrument that is not part of an issue of which a substantial
part is sold for money and is traded on an established securities market is its
fair market value when issued. Metropolitan believes that (1) the interest paid
on the note will be qualified stated interest and (2) the issue price and
stated redemption price at maturity will equal each other. Therefore,
Metropolitan expects that the notes will not be issued with original issue
discount.
In the event notes were deemed to be issued with more than a de minimis
discount, the original issue discount will be included in income by the
acquiring holder as it accrues under a constant yield method which would
generally require the recognition of taxable income associated with such
discount prior to the receipt of cash by such holder.
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<PAGE>
Bond Premium
Metropolitan believes that the notes will be issued without premium.
However, in the event a note holder's initial adjusted basis in the notes or
their fair market value immediately after the issuance, whichever is lower,
exceeds the amount payable at maturity of the notes, or in some cases, on an
earlier call date, the holders of notes may be able to elect to deduct the
excess using a constant yield method over the remaining term of the notes as
amortizable bond premium under Section 171 of the Code provided the notes are
held as a capital asset. Except as provided in the Treasury Regulations
relating thereto, the amortizable bond premium will be treated as an offset to
interest income on the notes rather than as a separate deduction item. An
election under Section 171 of the Code generally is binding once made and
applies to all obligations owned or subsequently acquired by the taxpayer.
Market Discount
With respect to notes acquired subsequent to the date of issuance, the
market discount provisions of the Code generally provide that, subject to a
statutorily defined de minimis exception, if a note is acquired at a market
discount and the holder thereof thereafter recognizes gain on a disposition of
such note, including a gift, the lesser of the gain or the portion of the
market discount that accrued while the note was held by the holder will be
treated as ordinary interest income at the time of the disposition. For this
purpose, in the case of a note not issued with original issue discount, an
acquisition at a market discount includes an acquisition, other than an
acquisition at original issuance, resulting in a basis in the note below the
note's stated redemption price at maturity. The market discount rules also
provide that a holder who acquires a note at a market discount, and who does
not elect to include the market discount in income on a current basis, may be
required to defer the deduction of a portion of any interest incurred or
maintained to purchase or carry the debt instrument until the holder disposes
of the debt instrument in a taxable transaction.
The notes provide that they may be redeemed, in whole or in part, before
maturity. If some or all of the notes are redeemed, each holder of a note
acquired at a market discount would be required to treat the principal payment
as ordinary interest income to the extent of any accrued market discount on the
notes.
A holder of a debt instrument may elect to have market discount currently
included in income. The current inclusion election, once made, applies to all
market discount obligations acquired by the holder on or after the fist day of
the first taxable year to which the election applies and may not be revoked
without the consent of the Service. If a note holder elects to include market
discount in income in accordance with the preceding sentence, the foregoing
rules with respect to the recognition of ordinary income on a sale or other
dispositions of a note and the deferral of interest deduction on indebtedness
related to the note will not apply.
Backup Withholding
Under the backup withholding rules, a holder of a debenture or note may be
subject to backup withholding at the rate of 31% with respect to interest paid
on, and the cash proceeds of the sale, redemption or other disposition of, the
debentures or notes unless the holder (1) is a corporation or comes within
other exempt categories and, when required, demonstrates that fact, or (2)
provides a taxpayer identification number, certifies as to no loss of exemption
from backup withholding, and otherwise complies with applicable requirements of
the backup withholding rules. Backup withholding may be required for the amount
of notes received.
PLAN OF DISTRIBUTION
The notes are being offered directly to the public on a best efforts basis,
with conditions, through Metropolitan Investment Securities, Inc. ("MIS"),
which is affiliated with Metropolitan through the common control by C. Paul
Sandifur Jr. Accordingly, the offering has not received the independent selling
agent review customarily made when an unaffiliated selling agent offers
securities. No commission or other expense of the
26
<PAGE>
offering will be paid by the purchasers of the notes. A commission of between
2.5% and 5.50% of the principal amount purchased or exchanged will, however, be
paid by Metropolitan, depending on whether purchases of notes are for cash or
for exchange for outstanding debentures. The notes are being offered only for
cash or cash equivalents, or for exchange on the terms described under the
section entitled "THE EXCHANGE OFFER." MIS will promptly deposit funds it
receives for new purchases in an escrow account, to be transmitted directly to
Metropolitan pending the satisfaction of the conditions to the offering. During
the three fiscal years ended September 30, 1998, MIS has received commissions
of $3,698,362 from Metropolitan on sales of approximately $112,685,000 of
Metropolitan's debentures.
MIS is a member of the National Association of Securities Dealers, Inc. Due
to the affiliation of Metropolitan and MIS, Rule 2720 of the NASD Conduct Rules
requires, in part, that a qualified independent underwriter be engaged to make
a recommendation regarding the interest rates to be paid on the notes offered
by this prospectus. Accordingly, MIS has obtained a letter from Cruttenden Roth
Incorporated, a NASD member, stating that the interest rate on the notes is
consistent with Cruttenden's recommendations which were based on conditions and
circumstances existing as of the date of the prospectus. Cruttenden has assumed
the responsibilities of acting as the qualified independent underwriter in
pricing the offering and conducting due diligence. For performing its functions
as a qualified independent underwriter with respect to the notes offered,
Cruttenden will receive $25,000.00 in fees. Cruttenden will also be reimbursed
by Metropolitan for its actual out-of-pocket expenses.
We have agreed to indemnify Cruttenden against, or make contributions to
Cruttenden with respect to, some liabilities under the Securities Act of 1933
and the Securities Exchange Act.
MIS does not intend to make a market for the notes. MIS may enter into
selected dealer agreements with and reallow to some dealers, who are members of
the NASD, and some foreign dealers who are not eligible for membership in the
NASD, a commission of up to 5.50% of the principal amount of notes sold by
those dealers.
LEGAL MATTERS
The legality of the notes to be issued in connection with this offering is
being passed upon for Metropolitan by the law firm of Kutak Rock, Denver,
Colorado.
EXPERTS
The consolidated balance sheets of Metropolitan Mortgage & Securities Co.,
Inc. and its subsidiaries as of September 30, 1998 and 1997, and the
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended September 30, 1998, incorporated by
reference in this prospectus, have been incorporated in reliance upon the
report, which includes an explanatory paragraph describing changes in the
methods of accounting for the transfer and servicing of financial assets in
1997 and impaired loans in 1996, of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in auditing and
accounting.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act, and, in compliance with the act, file periodic reports and other
information with the SEC. These reports and the other information that we file
with the SEC can be inspected and copied at the public reference facilities
maintained by the SEC in Washington, D.C. at 450 Fifth Street, N.W.,
Washington, DC 20549 and at some of its regional offices which are located in
the New York Regional Office, Seven World Trade Center, Suite 1300, New York,
NY 10048, and the Chicago Regional Office, CitiCorp Center, 500 West Madison
Street, Suite 1400, Chicago, IL 60661-2511. In addition, the SEC maintains a
World Wide Web site that contains reports, proxy statements and other
information regarding registrants like Metropolitan, that file electronically
with the SEC at the following Internet address: (http://www.sec.gov).
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<PAGE>
We have filed with the SEC in Washington, D.C., a registration statement on
Form S-2 under the Securities Act with respect to the notes offered by this
prospectus. This prospectus does not contain all of the information contained
in the registration statement, as permitted by the rules and regulations of the
SEC.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the SEC are incorporated in this
prospectus by reference:
Annual Report on Form 10-K of Metropolitan for the fiscal year ended
September 30, 1998, filed January 13, 1999.
Quarterly Report on Form 10-Q of Metropolitan for the fiscal quarter ended
June 30, 1999, filed August 13, 1999.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus modifies or supersedes that statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
Metropolitan will provide without charge to each person, including to whom a
prospectus is delivered, upon written or oral request of that person, a copy of
any and all of the information that has been referenced in this prospectus
other than exhibits to these documents. Requests for these copies should be
directed to Corporate Secretary, Metropolitan Mortgage & Securities Co., Inc.,
PO Box 2162, Spokane, Washington 99210-2162, telephone number (509) 838-3111.
28
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Metropolitan Mortgage & Securities Co., Inc.
$25,000,000
9% Notes due 2004
----------------
PROSPECTUS
----------------
, 1999
Metropolitan Investment Securities, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
Information Not Required in Prospectus
Item 14: Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
SEC Registration Fee............................................. $ 6,950
NASD Filing Fee.................................................. 3,000
Independent Underwriter Fee and Expenses......................... 25,000
Accounting Fees and Expenses(/1/)................................ *
Legal Fees and Disbursements(/1/)................................ *
Trustee's Fees and Expenses(/1/)................................. *
Printing Expenses(/1/)........................................... *
Miscellaneous Expenses(/1/)...................................... *
-------
Total Expenses................................................. $ *
=======
</TABLE>
- --------
* To be supplied by amendment
(1) Estimated
Item 15: Indemnification of Directors and Officers
Metropolitan has no contractual or other arrangement with its controlling
persons, directors or officers regarding indemnification, other than as set
forth in its Articles of Incorporation. Metropolitan's Articles of
Incorporation permits indemnification of a director, officer or employee up to
the indemnification limits permitted by Washington state law which permits
indemnification for judgments, fines and amounts paid in settlement actually
and reasonably incurred in connection with an action, suit or proceeding if
the indemnified person acted in good faith and in a manner reasonably believed
to be in and not opposed to the best interests of the corporation.
Item 16. Exhibits
(a) Exhibits
<TABLE>
<C> <S>
1.01* Selling Agreement between Metropolitan and Metropolitan Investment
Securities, Inc.
1.02* Form of Agreement to Act as "Qualified Independent Underwriter,"
between Metropolitan, Metropolitan Investment Securities, Inc. and
Cruttenden Roth Incorporated with respect to the note to be
registered.
1.03* Form of Pricing Recommendation Letter of Cruttenden Roth
Incorporated with respect to the notes to be registered.
4.01* Indenture, dated as of October 6, 1999, between Metropolitan and
U.S. Bank Trust National Association, trustee.
5.01* Opinion of Kutak Rock as to the validity of the notes.
10.01 Employment Agreement between Metropolitan and Bruce Blohowiak
(incorporated by reference to Exhibit 10(a) to Metropolitan's Form
10-K filed January 8, 1998).
10.02 Employment Agreement between Metropolitan and Michael Kirk
(incorporated by reference to Exhibit 10(b) to Metropolitan's Form
10-K filed January 8, 1998).
10.03 Employment Agreement between Metropolitan and Jon McCreary
(incorporated by reference to Exhibit 10(c) to Metropolitan's Form
10-K filed January 8, 1998).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
10.04 Reinsurance Agreement between Western United Life Assurance Company
and Old Standard Life Insurance Company (incorporated by reference
to Exhibit 10(d) to Metropolitan's Form 10-K filed January 8,
1998).
10.05 Employment Agreement between Metropolitan and William D. Snider
(incorporated by reference to Exhibit 10(c) to Metropolitan's Form
10-Q filed May 20, 1999).
11.01* Statement indicating computation of earnings per common share.
12.01* Statement of computation of ratio of earnings to fixed charges and
preferred stock dividends.
13.01 Quarterly Report of Metropolitan on Form 10-Q for the fiscal
quarter ended June 30, 1999 (incorporated by reference to
Metropolitan's Form 10-Q filed August 13, 1999).
23.01* Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.02 Consent of Kutak Rock (included in Exhibit 5).
24.01 The Power of attorney, included on Page II-4 of the Registration
Statement, is incorporated herein by reference.
25.01* Statement of eligibility of trustee.
99.01* Form of Letter of Transmittal
99.02* Form of Notice of Guaranteed Delivery
</TABLE>
- --------
* Filed herewith
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(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.
(b) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
II-2
<PAGE>
event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer, or controlling persons of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(1) For the purpose of determining any liability under the Act, the
information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the 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 Act, 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.
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-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Spokane, State of Washington, on this 5th day of
October, 1999.
Metropolitan Mortgage & Securities
Co., Inc.
/s/ C. Paul Sandifur, Jr.
By: _________________________________
C. Paul Sandifur, Jr., President,
Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, whose signatures
appear below, hereby constitute and appoint C. Paul Sandifur, Jr. their true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for them and in their name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full and to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ C. Paul Sandifur, Jr. President, Chief Executive October 5, 1999
______________________________________ Officer and Chairman of
C. Paul Sandifur, Jr. the Board (Principal
Executive Officer)
/s/ Bruce J. Blohowiak Executive Vice President, October 5, 1999
______________________________________ Chief Operating Officer
Bruce J. Blohowiak and Director
/s/ William Snider Chief Financial Officer October 5, 1999
______________________________________ (Principal Accounting
William Snider Officer)
/s/ Reuel Swanson Secretary and Director October 5, 1999
______________________________________
Reuel Swanson
/s/ Charles Stolz Director October 5, 1999
______________________________________
Charles Stolz
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Irv Marcus Director October 5, 1999
______________________________________
Irv Marcus
/s/ John T. Trimble Director October 5, 1999
______________________________________
John T. Trimble
/s/ Harold Erfurth Director October 5, 1999
______________________________________
</TABLE> Harold Erfurth
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
1.01* Selling Agreement between Metropolitan and Metropolitan Investment
Securities, Inc.
1.02* Form of Agreement to Act as "Qualified Independent Underwriter,"
between Metropolitan, Metropolitan Investment Securities, Inc. and
Cruttenden Roth Incorporated with respect to the note to be
registered.
1.03* Form of Pricing Recommendation Letter of Cruttenden Roth
Incorporated with respect to the notes to be registered.
4.01* Indenture, dated as of October 6, 1999, between Metropolitan and
U.S. Bank Trust National Association, trustee.
5.01* Opinion of Kutak Rock as to the validity of the notes.
10.01 Employment Agreement between Metropolitan and Bruce Blohowiak
(incorporated by reference to Exhibit 10(a) to Metropolitan's Form
10-K filed January 8, 1998).
10.02 Employment Agreement between Metropolitan and Michael Kirk
(incorporated by reference to Exhibit 10(b) to Metropolitan's Form
10-K filed January 8, 1998).
10.03 Employment Agreement between Metropolitan and Jon McCreary
(incorporated by reference to Exhibit 10(c) to Metropolitan's Form
10-K filed January 8, 1998).
10.04 Reinsurance Agreement between Western United Life Assurance
Company and Old Standard Life Insurance Company (incorporated by
reference to Exhibit 10(d) to Metropolitan's Form 10-K filed
January 8, 1998).
10.05 Employment Agreement between Metropolitan and William D. Snider
(incorporated by reference to Exhibit 10(c) to Metropolitan's Form
10-Q filed May 20, 1999).
11.01* Statement indicating computation of earnings per common share.
12.01* Statement of computation of ratio of earnings to fixed charges and
preferred stock dividends.
13.01 Quarterly Report of Metropolitan on Form 10-Q for the fiscal
quarter ended June 30, 1999 (incorporated by reference to
Metropolitan's Form 10-Q filed August 13, 1999).
23.01* Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.02 Consent of Kutak Rock (included in Exhibit 5).
24.01 The Power of attorney, included on Page II-5 of the Registration
Statement, is incorporated herein by reference.
25.01* Statement of eligibility of trustee.
99.01* Form of Letter of Transmittal
99.02* Form of Notice of Guaranteed Delivery
</TABLE>
- --------
*Filed herewith
<PAGE>
Exhibit 1.01
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
AND
METROPOLITAN INVESTMENT SECURITIES, INC.
SELLING AGREEMENT
This Agreement made as of the 6th day of October, 1999, by and between
METROPOLITAN MORTGAGE & SECURITIES CO., INC., a Washington corporation
("Metropolitan") and METROPOLITAN INVESTMENT SECURITIES, INC., a Washington
corporation (the "Selling Agent").
WITNESSETH:
WHEREAS, Metropolitan proposes to issue and sell or exchange for
outstanding debentures (the "Offering") up to $25,000,000 principal amount of
its 9% Notes due 2004 (the "Notes") pursuant to a Registration Statement on Form
S-2 (the "Registration Statement") to be filed with the U.S. Securities and
Exchange Commission (the "SEC") and a Prospectus (the "Prospectus") which is a
part of the Registration Statement, all filed under the Securities Act of 1933,
as amended; and
WHEREAS, the Selling Agent, an affiliate of Metropolitan, for good and
valuable consideration the receipt of which is hereby acknowledged, desires to
assist in the sale or exchange of the Notes upon the terms and in reliance upon
the representations, warranties and agreements set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Appointment of Selling Agent. Metropolitan hereby appoints the Selling
Agent as its managing agent to offer and sell the Notes or exchange the Notes
for Metropolitan's Investment Debentures Series II or III, or Installment
Debentures Series I (collectively the "Debentures") at the price and in the
manner described in the Registration Statement and the Prospectus and in
compliance with the terms and conditions thereof. Metropolitan agrees to
provide the Selling Agent with such number of Registration Statements and
Prospectuses as it reasonably requests to enable it to offer the Notes and
authorizes the Selling Agent to distribute the Registration Statements and
Prospectuses.
2. Undertaking of Selling Agent. The Selling Agent agrees to use its best
efforts to sell the Notes on the terms stated herein and in the Registration
Statement and Prospectus and to notify Metropolitan of the number of Notes with
respect to which subscription agreements have been executed by subscribers. It
is understood that the Selling Agent has no commitment to sell the Notes other
than to use its best efforts. The Selling Agent will deposit, by noon of the
next business day after receipt, all cash and checks received from the
subscribers in a trust account (the "Trust Account"), in compliance with the
rules and regulations of the SEC applicable to a
<PAGE>
best efforts or other contingent offering, to be held in the Trust Account until
the conditions to the Offering have been satisfied. Upon satisfaction of the
conditions to the Offering, the Selling Agent will cause the delivery all funds
in the Trust Account to Metropolitan by noon of the next business day. If the
Offering is terminated without having satisfied the conditions to the Offering,
the Selling Agent will cause the funds in the Trust Account to be returned
promptly to their rightful owners in compliance with the rules and regulations
of the SEC and the National Association of Securities Dealers, Inc. All checks
received by the Selling Agent from subscribers shall be made payable to Bank of
America, as escrow agent. The Selling Agent will not maintain discretionary
customer accounts and undertakes that it will not, in any event make
discretionary purchases for the accounts of customers.
The Selling Agent will also act as the exchange agent for the Offering. The
Selling Agent will cause all certificates and other documents, that are tendered
by a holder of Debentures, to be held in escrow until the end of the Offering.
The Selling Agent will inform Metropolitan of the certificate number and
principal amount of each Debenture tendered, and supply copies of all documents
tendered to Metropolitan promptly after each Debenture is tendered. If the
conditions to the Offering set forth in the Registration Statement are met,
Selling Agent and Metropolitan agree that Metropolitan will decide and instruct
the Selling Agent on which Debenture certificates to accept as validly tendered
for exchange, if any, and Metropolitan will instruct the Selling Agent on which
Debenture certificates to promptly return, or cause to be returned, to their
respective holders. If the Offering is terminated, Selling Agent will promptly
return, or cause to be returned, all Debenture certificates promptly to their
respective holders.
3. Amendment of the Registration Statement and Prospectus. Metropolitan
agrees, at its expense, to amend or supplement the Registration Statement or the
Prospectus and to provide the Selling Agent with sufficient copies thereof for
distribution as contemplated in the Registration Statement or the Prospectus or
otherwise for purposes contemplated by federal and state securities laws, if (i)
the Selling Agent advises Metropolitan that in its opinion and that of its
counsel, such amendment or supplement is necessary or advisable, or (ii) such
amendment or supplement is necessary to comply with federal or state securities
laws or the rules or regulations promulgated thereunder or is necessary to
correct any untrue statement therein or eliminate any material omissions therein
or any omissions therein which make any of the statements therein misleading.
The representations, warranties and obligations to indemnify all parties hereto
contained herein relating to the Registration Statement or the Prospectus shall
attach to any such amendment or supplement.
4. Undertakings of Metropolitan. Metropolitan will promptly notify the
Selling Agent in the event of the issuance by the SEC of any stop order or other
order suspending the registration of the Notes, or in the event of the
institution or intended institution of any action or proceeding for that
purpose. In the event that the SEC shall enter a stop order suspending or
otherwise suspend the registration of the Notes, Metropolitan will make every
reasonable effort to obtain as promptly as possible the entry of an appropriate
order setting aside such stop order or otherwise reinstating the registration of
the Notes.
2
<PAGE>
5. Representations and Warranties. Metropolitan represents and warrants to
the Selling Agent that:
(i) The Registration Statement and the Prospectus comply as to form in
all material respects with the Securities Act of 1933 and the
rules and regulations of the SEC thereunder, accurately describe
the operations of Metropolitan and do not contain any misleading
or untrue statements of a material fact or omit to state a
material fact which is necessary to prevent the statements therein
from being misleading.
(ii) Metropolitan is a corporation duly organized and validly existing
under the laws of the State of Washington with full corporate
power to perform its obligations as described in the Registration
Statement and the Prospectus.
(iii) The Notes, when issued and sold pursuant to the terms hereof and
of the Registration Statement, Prospectus and subscription
agreements, will constitute valid, binding and legal outstanding
obligations of Metropolitan, in accordance with their terms.
(iv) This Agreement has been duly and validly authorized, executed and
delivered on behalf of Metropolitan and is a valid and binding
agreement in accordance with its terms.
6. Indemnification. Metropolitan and the Selling Agent each (a) agree to
indemnify and hold harmless the other (and each person, if any, who controls the
other) against any loss, claim, damage, charge or liability to which the other
(or such controlling persons) may become subject, insofar as such loss, claim,
damage, charge or liability (or actions in respect thereof) (i) arises out of or
is based upon any misrepresentation or breach of warranty of such party herein
or any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or the Prospectus (or any amendment or
supplement thereto) which relates to or was supplied by such party, or (ii)
arises out of or is based upon the omission or alleged omission to state therein
a material fact relating to such party required to be stated therein or
necessary to make the statements therein not misleading, including liabilities
under the Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, and (b) agree to reimburse such other party (and any
controlling persons) for any legal or other fees or expenses reasonably incurred
in connection with investigating or defending any action or claim arising out of
or based upon any of the foregoing.
7. Fees and Expenses. Metropolitan will pay all expenses incurred in
connection with the Offering and sale of the Notes, including without
limitation, fees and expenses of counsel, blue sky fees and expenses (including
legal fees), printing expenses, exchange listing fees, accounting fees and
expenses, and fees and expenses of U.S. Bank Trust National Association, as
Trustee. In the event of termination of the Offering, Selling Agent will be
reimbursed only for its actual accountable out-of-pocket expenses, and no
commissions will be paid. The commission payable upon sale of the Notes to an
investor who is not exchanging Metropolitan's debentures for Notes shall be a
maximum of 5.50% of the investment amount. The commission payable upon the
exchange of Metropolitan's debentures for Notes shall be a maximum of 2.75% of
the
3
<PAGE>
principal amount exchanged. Exchange commissions will only be payable with
respect to validly tendered debentures that are validly accepted for exchange by
Metropolitan, on the terms described in the Registration Statement.
8. Governing Law. This Agreement shall be deemed to be made under and
governed by the laws of the State of Washington.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as
of the day and year first above mentioned.
METROPOLITAN MORTGAGE &
SECURITIES CO., INC.
By /s/ C. Paul Sandifur, Jr.
----------------------------------
C. Paul Sandifur, Jr., President
METROPOLITAN INVESTMENT SECURITIES, INC.
By /s/ Reuel Swanson
----------------------------------
Reuel Swanson, Secretary
4
<PAGE>
Exhibit 1.02
FORM OF AGREEMENT TO ACT AS "QUALIFIED INDEPENDENT UNDERWRITER"
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
9% Notes due 2004
This agreement made as of the ___ day of October, 1999 by and between
Metropolitan Mortgage & Securities Co., Inc., a Washington corporation
("Metropolitan"), Metropolitan Investment Securities, Inc., a Washington
corporation ("MIS"), and CRUTTENDEN ROTH INCORPORATED, a California corporation
("CRUTTENDEN").
WITNESSETH:
WHEREAS, Metropolitan intends to offer $25,000,000 in 9% Notes due 2004
(hereinafter referred to as "Notes"), which will be offered in reliance on a
registration statement filed on Form S-2 with the Securities and Exchange
Commission; and,
WHEREAS, MIS, a broker/dealer and affiliate of Metropolitan and a member of
the National Association of Securities Dealers, Inc. ("NASD"), will be engaged
as the sole managing agent for Metropolitan; and,
WHEREAS, pursuant to subparagraph (c) of Rule 2720 of the NASD, MIS, as a
NASD member, may participate in such underwriting only if the yield at which the
Notes offered to the public is not lower than the yield recommended by a
"Qualified Independent Underwriter" as that term is defined in Rule 2720
subparagraph (b)(15) of the NASD Conduct Rules, and who participates in the
preparation of the registration statement and prospectus relating to the
offering and exercises customary standards of due diligence, with respect
thereto; and,
WHEREAS, this agreement ("Agreement") describes the terms under which
Metropolitan is retaining CRUTTENDEN to serve as such a "Qualified Independent
Underwriter" in connection with the offering of Notes;
NOW, THEREFORE, in consideration of the recitations set forth above, and
the terms, promises, conditions, and covenants herein contained, the parties
hereby contract and agree as follows:
DEFINITIONS
As hereinafter used, except as the context may otherwise require, the term
"Registration Statement" means the registration statement on Form S-2 (including
the related preliminary prospectus, financial statements, exhibits and all other
documents to be filed as a part thereof or incorporated therein) for the
registration of the offer and sale of the Notes under the Securities Act of
1933, as amended, and the rules and regulations thereunder (the "Act") filed
with the Securities and Exchange Commission (the "Commission"), and any
amendment thereto, and the term "Prospectus" means the prospectus including any
preliminary or final prospectus and any materials incorporated by reference into
and attached to the Prospectus (including the form of prospectus to be filed
with the Commission pursuant to Rule 424(b) under the Act) and any amendment or
supplement thereto, to be used in connection with the offering.
1
<PAGE>
Section 1. Rule 2720 Requirement. CRUTTENDEN hereby confirms its agreement
as required by subparagraph (b)(15) of Rule 2720 of the Conduct Rules of the
NASD and represents that, as appropriate, CRUTTENDEN satisfies or at the times
designated in such subparagraph (l5) will satisfy the other requirements set
forth therein or will receive an exemption from such requirements from the NASD.
Section 2. Consent. CRUTTENDEN hereby consents to be named in the
Registration Statement and Prospectus as having acted as a "Qualified
Independent Underwriter" solely for the purposes of Rule 2720 referenced herein.
Except as permitted by the immediately preceding sentence or to the extent
required by law, all references to CRUTTENDEN in the Registration Statement or
Prospectus or in any other filing, report, document, release or other
communication prepared, issued or transmitted in connection with the offering by
Metropolitan or any corporation controlling, controlled by or under common
control with Metropolitan, or by any director, officer, employee, representative
or agent of any thereof, shall be subject to CRUTTENDEN's prior written consent
with respect to form and substance.
Section 3. Pricing Formula And Recommendation Letter. CRUTTENDEN agrees to
render a written letter of recommendation as to the yield below which
Metropolitan's Notes may not be offered and the exchange value below which the
Notes may not be exchanged (the "Pricing Recommendation Letter"). It is
understood and agreed by CRUTTENDEN that the securities to which this Agreement
relates will be offered on a minimum to maximum, best efforts basis by MIS, as
the managing agent, pursuant to the Selling Agreement in effect between MIS and
Metropolitan which is filed as an exhibit to the Registration Statement referred
to above. Metropolitan, through MIS, will offer the Notes according to the terms
and conditions of said agreement, in accordance with this Agreement. CRUTTENDEN
reserves the right to review and amend its Pricing Recommendation Letter upon
the filing of any post-effective amendment to the Registration Statement or upon
occurrence of any material event which may or may not require such an amendment
to be filed, or at such time as the offering under the registration shall
terminate or otherwise lapse under operation of law.
Section 4. Fees And Expense. It is agreed that CRUTTENDEN shall be paid a
fee for its services hereunder in the amount of $25,000.00 payable upon delivery
of the Pricing Recommendation Letter referred to in paragraph 3 above. In
addition, CRUTTENDEN will be reimbursed by Metropolitan for CRUTTENDEN's actual
out-of-pocket expenses, up to a maximum of $7,000.000, incurred in connection
with its performance of its duties and obligations hereunder.
Section 5. Material Facts. Metropolitan represents and warrants to
CRUTTENDEN that at the time the Registration Statement and, at the time the
Prospectus is filed with the Commission (including any preliminary prospectus
and the form of prospectus filed with the Commission pursuant to Rule 424(b))
and at all times subsequent thereto, to and including the date on which payment
for, and delivery of, the Notes to be sold in the Offering is made by the
underwriter or underwriters, as the case may be, participating in the Offering
and by Metropolitan (such date being referred to herein as the "Closing Date"),
the Registration Statement and the Prospectus (as the same may be amended or
supplemented if such documents, including documents incorporated therein by
reference, shall have been so amended or supplemented) will contain all material
statements which are required to be stated therein in accordance with the Act
and will conform to all other requirements of the federal securities laws, and
will not, on such date contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading and that all contracts and documents required
by the Act to be filed or required to be filed as exhibits to the Registration
Statement have been filed. Metropolitan further represents and warrants that any
further filing, report, document, release or communication which in any way
refers to CRUTTENDEN or to the services to be performed by CRUTTENDEN pursuant
to this Agreement will not contain any untrue or misleading statement of a
material fact or omit to state
2
<PAGE>
a material fact required to be stated therein or necessary to make the
statements therein not misleading.
Metropolitan further warrants and represents that:
(a) All leases, contracts and agreements referred to in or filed as
exhibits to the Registration Statement to which Metropolitan or
its subsidiaries is a party or by which it is bound are in full
force and effect, except as may otherwise be disclosed in the
Registration Statement.
(b) Metropolitan has good and marketable title, except as otherwise
indicated in the Registration Statement and Prospectus, to all
of its assets and properties described therein as being owned by
it, free and clear of all liens, encumbrances and defects except
such encumbrances and defects which do not, in the aggregate,
materially affect or interfere with the use made and proposed to
be made of such properties as described in the Registration
Statement and Prospectus; and Metropolitan has no material
leased properties except as disclosed in the Prospectus.
(c) Metropolitan is duly organized under the laws of the State of
Washington and, as of the effective date of the Registration
Statement and at the Closing Date Metropolitan will be validly
existing and in good standing under the laws of the State of
Washington with full corporate power and authority to own its
properties and conduct its business to the extent described in
the Registration Statement and Prospectus; Metropolitan is duly
qualified to do business as a foreign corporation and is in good
standing in all jurisdictions in which the nature of the
business transacted by it or its ownership of properties or
assets makes qualification necessary; the authorized and
outstanding capitalization of Metropolitan is as set forth in
the Prospectus and the description in the Prospectus of the
capital stock of Metropolitan conforms with and accurately
describes the rights set forth in the instruments defining the
same;
(d) Metropolitan is not in violation of its Certificate of
Incorporation or Bylaws or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any bond, note, note, or other evidence
of indebtedness, contract or lease or in any indenture or loan
agreement to which it is a party or by which it is bound.
(e) The execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action on the
part of Metropolitan and MIS and performance of the foregoing
agreement and the consummation of the transactions contemplated
thereby, will not conflict with or result in a breach of any of
the terms or constitute a violation of the respective
Certificates of Incorporation or Bylaws of Metropolitan or MIS,
or any deed of trust, lease, sublease, indenture, mortgage, or
other agreement or instrument to which Metropolitan or MIS is a
party or by which either of them or their property is bound, or
any applicable law, rule, regulation, judgment, order or decree
of any
3
<PAGE>
government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over Metropolitan or MIS or their
properties or obligations; and no consent, approval,
authorization or order of any court or governmental agency or
body is required for the consummation of the transactions
contemplated herein and in the other agreements previously
referred to in this paragraph except as may be required under
the Act or under any state securities or laws.
(f) Any certificate signed by an officer of Metropolitan and
delivered to CRUTTENDEN pursuant to this Agreement shall be
deemed a representation and warranty by Metropolitan to
CRUTTENDEN, to have the same force and effect as stated herein,
as to the matters covered thereby.
(g) If any event relating to or affecting Metropolitan shall occur
as a result of which it is necessary, in CRUTTENDEN's opinion,
to amend or supplement the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser,
Metropolitan undertakes to inform CRUTTENDEN of such events
within a reasonable time thereafter, and will forthwith prepare
and furnish to CRUTTENDEN, without expense to them, a reasonable
number of copies of an amendment or amendments or a supplement
or supplements to the Prospectus (in form and substance
satisfactory to CRUTTENDEN) which will amend or supplement the
Prospectus so that as amended or supplemented it will not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein in
light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading.
(h) Metropolitan hereby warrants and represents that the Notes were
priced at an annual yield of 9% simple interest computed on a
360 day year.
(i) All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of
Metropolitan submitted pursuant hereto, shall remain operative
and in full force and effect, surviving the date of this
Agreement.
Section 6. Availability Of Information. Metropolitan hereby agrees to
provide CRUTTENDEN, at its expense, with all information and documentation with
respect to its business, financial condition and other matters as CRUTTENDEN may
deem relevant based on the standards of reasonableness and good faith and shall
request in connection with CRUTTENDEN's performance under this Agreement,
including, without limitation, copies of all correspondence with the Commission,
certificates of its officers, opinions of its counsel and comfort letters from
its auditors. The above-mentioned certificates, opinions of counsel and comfort
letters shall be provided to CRUTTENDEN as CRUTTENDEN may request on the
effective date of the Registration Statement and on the Closing Date.
Metropolitan will make reasonably available to CRUTTENDEN, its auditors,
counsel, and officers and directors to discuss with CRUTTENDEN any aspect of
Metropolitan which CRUTTENDEN may deem
4
<PAGE>
relevant. In addition, Metropolitan, at CRUTTENDEN's request, will cause to be
delivered to CRUTTENDEN copies of all certificates, opinions, letters and
reports to be delivered to the underwriter or underwriters, as the case may be,
pursuant to any underwriting agreement executed in connection with the Offering
or otherwise, and shall cause the person issuing such certificate, opinion,
letter or report to authorize CRUTTENDEN to rely thereon to the same extent as
if addressed directly to CRUTTENDEN. Metropolitan represents and warrants to
CRUTTENDEN that all such information and documentation provided pursuant to this
paragraph 6 will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statement therein not misleading. In
addition, Metropolitan will promptly advise CRUTTENDEN of all telephone
conversations with the Commission which relate to or may affect the Offering.
Section 7. Indemnification.
(a) Subject to the conditions set forth below, and in addition to any
rights of indemnification and contribution to which CRUTTENDEN may be entitled
pursuant to any agreement among underwriters, underwriting agreement or
otherwise, and to the extent allowed by law, Metropolitan hereby agrees that it
will indemnify and hold CRUTTENDEN and each person controlling, controlled by or
under common control with CRUTTENDEN within the meaning of Section 15 of the Act
or Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or the rules and regulations thereunder (individually, an "Indemnified
Person") harmless from and against any and all loss, claim, damage, liability,
cost or expense whatsoever to which such Indemnified Person may become subject
under the Act, the Exchange Act, or other federal or state statutory law or
regulation, at common law or otherwise, arising out of, based upon, or in any
way related or attributed to (i) this Agreement, (ii) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or Prospectus or any other filing, report, document, release or
communication, whether oral or written, referred to in paragraph 5 hereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (iii)
any application or other document executed by Metropolitan or based upon written
information furnished by Metropolitan filed in any jurisdiction in order to
qualify the Notes under the securities or Blue Sky laws thereof, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (iv) the
breach of any representation or warranty made by Metropolitan in this Agreement.
Metropolitan further agrees that upon demand by an Indemnified Person at any
time or from time to time, it will promptly reimburse such Indemnified Person
for, or pay, any loss, claim, damage, liability, cost or expense as to which
Metropolitan has indemnified such person pursuant hereto. Notwithstanding the
foregoing provisions of this paragraph 7, any such payment or reimbursement by
Metropolitan of fees, expenses or disbursement incurred by an Indemnified Person
in any proceeding in which a final judgment by a court of competent jurisdiction
(after all appeals or the expiration of time to appeal) is entered against such
Indemnified Person as a direct result of such person's negligence, bad faith or
willful misfeasance will be promptly repaid to Metropolitan. In addition,
anything in this paragraph 7 to the contrary notwithstanding, Metropolitan shall
not be liable for any settlement of any action or proceeding effected without
its written consent.
(b) Promptly after receipt by an Indemnified Person under sub-paragraph (a)
above of notice of the commencement of any action, such Indemnified Person will,
if a claim in respect thereof is to be made against Metropolitan under paragraph
(a), notify Metropolitan in writing of
5
<PAGE>
the commencement thereof; but the omission to so notify Metropolitan will not
relieve Metropolitan from any liability which it may have to any Indemnified
Person otherwise than under this paragraph 7 if such omission shall not have
materially prejudiced Metropolitan's ability to investigate or to defend against
such claim. In case any such action is brought against any Indemnified Person,
and such Indemnified Person notifies Metropolitan of the commencement thereof,
Metropolitan will be entitled to participate therein and, to the extent that it
may elect by written notice delivered to the Indemnified Person promptly after
receiving the aforesaid notice from such Indemnified Person, to assume the
defense thereof with counsel reasonably satisfactory to such Indemnified Person;
PROVIDED, HOWEVER, that if the defendants in any such action include both the
Indemnified Person and Metropolitan or any corporation controlling, controlled
by or under common control with Metropolitan, or any director, officer,
employee, representative or agent of any thereof, or any other "Qualified
Independent Underwriter" retained by Metropolitan in connection with the
Offering and the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it which are different from or additional to
those available to such other defendant, the Indemnified Person shall have the
right to select separate counsel to represent it. Upon receipt of notice from
Metropolitan to such Indemnified Person of its election so to assume the defense
of such action and approval by the Indemnified Person of counsel, Metropolitan
will not be liable to such Indemnified Person under this paragraph 7 for any
fees of counsel subsequently incurred by such Indemnified Person in connection
with the defense thereof (other than the reasonable costs of investigation
subsequently incurred by such Indemnified Person) unless (i) the Indemnified
Person shall have employed separate counsel in accordance with the provision of
the next preceding sentence (it being understood, however, that Metropolitan
shall not be liable for the expenses of more than one separate counsel in any
one jurisdiction representing the Indemnified Person, which counsel shall be
approved by CRUTTENDEN), (ii) Metropolitan, within a reasonable time after
notice of commencement of the action, shall not have employed counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person, or
(iii) Metropolitan shall have authorized in writing the employment of counsel
for the Indemnified Person at the expense of Metropolitan, and except that, if
clause (i) or (iii) is applicable, such liability shall be only in respect of
the counsel referred to in such clause (i) or (iii).
(c) Subject to the conditions set forth below, and in addition to any
rights of indemnification and contribution to which Metropolitan may be entitled
pursuant to any agreement among underwriters, underwriting agreement or
otherwise, and to the extent allowed by law, CRUTTENDEN hereby agrees that it
will indemnify and hold Metropolitan and each person controlling, controlled by
or under common control with Metropolitan within the meaning of Section 15 of
the Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the rules and regulations thereunder (individually, an
"Indemnified Person") harmless from and against any and all loss, claim, damage,
liability, cost or expense whatsoever to which such Indemnified Person may
become subject under the Act, the Exchange Act, or other federal or state
statutory law or regulation, at common law or otherwise, arising out of, based
upon, or in any way related or attributed to the failure of CRUTTENDEN to be a
"qualified independent underwriter" as contemplated by this Agreement.
CRUTTENDEN further agrees that upon demand by an Indemnified Person at any time
or from time to time, it will promptly reimburse such Indemnified Person for, or
pay, any loss, claim, damage, liability, cost or expense as to which CRUTTENDEN
has indemnified such person pursuant hereto. Notwithstanding the foregoing
provisions of this paragraph 7, any such payment or reimbursement by CRUTTENDEN
of fees, expenses or disbursement incurred by an Indemnified Person in any
proceeding in which a final judgment by a court of competent
6
<PAGE>
jurisdiction (after all appeals or the expiration of time to appeal) is entered
against such Indemnified Person as a direct result of such person's negligence,
bad faith or willful misfeasance will be promptly repaid to CRUTTENDEN. In
addition, anything in this paragraph 7 to the contrary notwithstanding,
CRUTTENDEN shall not be liable for any settlement of any action or proceeding
effected without its written consent. CRUTTENDEN and Metropolitan agree that
they shall each follow the procedures set forth in paragraph 7(b) with respect
to any claim against CRUTTENDEN hereunder.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph 7 is due in
accordance with its terms but is for any reason held by a court to be
unavailable from Metropolitan to CRUTTENDEN on grounds of policy or otherwise,
Metropolitan and CRUTTENDEN shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) to which Metropolitan and
CRUTTENDEN may be subject in such proportion so that CRUTTENDEN is responsible
for that portion represented by the percentage that its fee under this Agreement
bears to the public offering price appearing on the cover page of the Prospectus
and Metropolitan is responsible for the balance, except as Metropolitan may
otherwise agree to reallocate a portion of such liability with respect to such
balance with any other person, including, without limitation, any other
"Qualified Independent Underwriter"; PROVIDED, HOWEVER, that (i) in no case
shall CRUTTENDEN be responsible for any amount in excess of the fee set forth in
paragraph 4 above and (ii) no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this paragraph (d), any person controlling, controlled by or under
common control with CRUTTENDEN, or any partner, director, officer, employee,
representative or any agent of any thereof, shall have the same rights to
contribution as CRUTTENDEN and each person who controls Metropolitan within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each officer
of Metropolitan who shall have signed the Registration Statement and each
director of Metropolitan shall have the same rights to contribution as
Metropolitan, subject in each case to clause (i) of this paragraph (d). Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against the other party under this
paragraph (d), notify such party from whom contribution may be sought, but the
omission to so notify such party shall not relieve the party from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d). The indemnity and
contribution agreements contained in this paragraph 7 shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
any Indemnified Person or termination of this Agreement.
Section 8. Authorization By METROPOLITAN. Metropolitan represents and
warrants to CRUTTENDEN that this Agreement has been duly authorized, executed
and delivered by Metropolitan and constitutes a valid and binding obligation of
Metropolitan.
Section 9. Authorization By MIS. MIS represents and warrants to
CRUTTENDEN that this Agreement has been duly authorized, executed and delivered
by MIS and constitutes a valid and binding obligation of MIS.
7
<PAGE>
Section 10. Authorization By CRUTTENDEN. CRUTTENDEN represents and
warrants to Metropolitan that this Agreement has been duly authorized, executed
and delivered by CRUTTENDEN and constitutes a valid and binding obligation of
CRUTTENDEN.
Section 11. Notice. Whenever notice is required to be given pursuant to
this Agreement, such notice shall be in writing and shall be mailed by first
class mail, postage prepaid, addressed (a) if to CRUTTENDEN ROTH INCORPORATED,
at 18301 Von Karman, Suite 100, Irvine, CA 92612, Attention: Walter W.
Cruttenden and (b) if to Metropolitan, at 601 W. 1st. Avenue - Department
115000, Spokane, Washington 99201, Attention: Susan Thomson, Assistant
Corporate Counsel.
Section 12. Governing Law. This Agreement shall be construed (both as to
validity and performance) and enforced in accordance with and governed by the
laws of the State of Washington applicable to agreements made and to be
performed wholly within such jurisdiction.
8
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the day and year first above mentioned.
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
By:
------------------------------------------
C. Paul Sandifur, Jr., President
METROPOLITAN INVESTMENT SECURITIES, INC.
By:
------------------------------------------
C. Paul Sandifur, Jr., President
CRUTTENDEN ROTH INCORPORATED
By:
------------------------------------------
Shelly Singhal,
Executive Vice President, Corporate Finance
9
<PAGE>
Exhibit 1.03
FORM OF PRICING RECOMMENDATION LETTER
[Letterhead]
Date: October __, 1999
C. Paul Sandifur, Jr., President
Metropolitan Investment Securities, Inc.
601 W. 1st Ave.
Spokane, Washington 99201
Re: Pricing Opinion of Cruttenden Roth Incorporated
Metropolitan Mortgage & Securities Co., Inc., Offering of $25,000,000 in
Principal Amount of 9% Notes due 2004
Dear Mr. Sandifur:
This letter will serve to confirm our engagement as a "qualified
independent underwriter" as that term is defined in subparagraph (b)(15) of Rule
2720 to the NASD Conduct Rules, as amended ("Rule 2720").
Based upon our review of the registration statement, and the performance of
"due diligence" as required in subparagraph (c)(3) to Rule 2720, it appears that
the yield on the 9% Notes due 2004 is no lower than we would recommend, and it
appears that the exchange value of the 9% Notes due 2004 is no lower than we
would recommend.
We hereby consent to the use of our name as a "qualified independent
underwriter," in the Registration Statement filed by Metropolitan Mortgage &
Securities Co., Inc. with respect to the above-referenced matter.
Very truly yours,
CRUTTENDEN ROTH INCORPORATED
By:_________________________________
cc: National Association of Securities Dealers, Inc.
<PAGE>
Exhibit 4.01
================================================================================
INDENTURE
between
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
Dated as of October 6, 1999
================================================================================
<PAGE>
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture dated as of October 6, 1999.
Trust Indenture Act Section Indenture Section
Section 310(a)(1) 6.07
(a)(2) 6.07
(b) 6.07, 6.08
Section 312(c) 7.01
Section 313(a) 7.02
(c) 7.02
Section 314(a) 7.03
(a)(4) 10.09
(c)(1) 1.02
(c)(2) 1.02
(e) 1.02
Section 315(b) 6.01
Section 316(a) (last sentence) 1.01 ("Outstanding")
(a)(1)(A) 5.02, 5.12
(a)(1)(B) 5.13
(b) 5.08
Section 317(a)(1) 5.03
(a)(2) 5.04
Section 318(a) 1.11
(c) 1.11
- --------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act,
which provides that the provisions of Sections 310 to and including 317 of the
1939 Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C> <C>
Section 1.01. Definitions.................................................................1
Section 1.02. Compliance Certificates and Opinions........................................9
Section 1.03. Form of Documents Delivered to Trustee.....................................10
Section 1.04. Acts of Holders............................................................10
Section 1.05. Notices, Etc., To Trustee and Company......................................12
Section 1.06. Notice to Holders; Waiver..................................................12
Section 1.07. Counterparts; Effect of Headings and Table of Contents.....................13
Section 1.08. Successors and Assigns.....................................................13
Section 1.09. Severability Clause........................................................13
Section 1.10. Benefits of Indenture......................................................13
Section 1.11. Governing Law..............................................................13
Section 1.12. Legal Holidays.............................................................14
Section 1.13. Immunity of Stockholders, Directors, Officers and Agents of the Company....14
Section 1.14. Conflict with Trust Indenture Act..........................................14
ARTICLE II
SECURITIES FORMS
Section 2.01. Forms of Securities........................................................14
Section 2.02. Form of Trustee's Certificate of Authentication............................15
Section 2.03. Securities Issuable in Global Form.........................................15
ARTICLE III
THE SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.......................................16
Section 3.02. Denominations..............................................................20
Section 3.03. Execution, Authentication, Delivery and Dating.............................20
Section 3.04. Temporary Securities.......................................................22
Section 3.05. Registration, Registration of Transfer and Exchange........................25
Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities...........................28
Section 3.07. Payment of Interest; Interest Rights Reserved..............................29
Section 3.08. Persons Deemed Owners......................................................31
Section 3.09. Cancellation...............................................................32
Section 3.10. Computation of Interest....................................................32
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE IV
SATISFACTION AND DISCHARGE
<S> <C> <C>
Section 4.01. Satisfaction and Discharge of Indenture....................................32
Section 4.02. Application of Trust Funds.................................................34
ARTICLE V
REMEDIES
Section 5.01. Events of Default...........................................................34
Section 5.02. Acceleration of Maturity; Rescission and Annulment..........................35
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee.............36
Section 5.04. Trustee May File Proofs of Claim............................................37
Section 5.05. Trustee May Enforce Claims Without Possession of Securities or Coupons......38
Section 5.06. Application of Money Collected..............................................38
Section 5.07. Limitation on Suits.........................................................39
Section 5.08. Unconditional Rights of Holders to Receive Principal, Premium,
if any, Interest and Additional Amounts.....................................39
Section 5.09. Restoration of Rights and Remedies..........................................39
Section 5.10. Rights and Remedies Cumulative..............................................40
Section 5.11. Delay or Omission not Waiver................................................40
Section 5.12. Control by Holders of Securities............................................40
Section 5.13. Waiver of Past Defaults.....................................................40
Section 5.14. Waiver of Usury, Stay or Extension Laws.....................................41
Section 5.15. Undertaking for Costs.......................................................41
ARTICLE VI
THE TRUSTEE
Section 6.01. Notice of Defaults..........................................................41
Section 6.02. Certain Rights of Trustee...................................................42
Section 6.03. Not Responsible for Recitals or Issuance of Securities......................43
Section 6.04. May Hold Securities.........................................................44
Section 6.05. Money Held in Trust.........................................................44
Section 6.06. Compensation and Reimbursement..............................................44
Section 6.07. Corporate Trustee Required; Eligibility; Conflicting Interests..............44
Section 6.08. Resignation and Removal; Appointment of Successor...........................45
Section 6.09. Acceptance of Appointment by Successor......................................46
Section 6.10. Merger, Conversion, Consolidation or Succession to Business.................47
Section 6.11. Appointment of Authenticating Agent.........................................47
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
<S> <C> <C>
Section 7.01. Disclosure of Names and Addresses of Holders................................49
Section 7.02. Reports by Trustee..........................................................49
Section 7.03. Reports by Company..........................................................49
Section 7.04. Company to Furnish Trustee Names and Addresses of Holders...................50
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
Section 8.01. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions.....................50
Section 8.02. Rights and Duties of Successor Corporation..................................51
Section 8.03. Officers' Certificate and Opinion of Counsel................................51
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Holders..........................52
Section 9.02. Supplemental Indentures with Consent of Holders.............................53
Section 9.03. Execution of Supplemental Indentures........................................54
Section 9.04. Effect of Supplemental Indenture............................................54
Section 9.05. Conformity with Trust Indenture Act.........................................54
Section 9.06. Reference in Securities to Supplemental Indentures..........................55
ARTICLE X
COVENANTS
Section 10.01. Payment of Principal, Premium, if any, Interest and Additional Amounts......55
Section 10.02. Maintenance of Office or Agency.............................................55
Section 10.03. Money for Securities Payments to be Held in Trust...........................57
Section 10.04. Existence...................................................................58
Section 10.05. Maintenance of Properties...................................................58
Section 10.06. Insurance...................................................................58
Section 10.07. Payment of Taxes and Other Claims...........................................59
Section 10.08. Provision of Financial Information..........................................59
Section 10.09. Statement as to Compliance..................................................59
Section 10.10. Additional Amounts..........................................................59
Section 10.11. Waiver of Certain Covenants.................................................60
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE XI
REDEMPTION OF SECURITIES
<S> <C> <C>
Section 11.01. Applicability of Article....................................................61
Section 11.02. Election to Redeem; Notice to Trustee.......................................61
Section 11.03. Selection by Trustee of Securities to be Redeemed...........................61
Section 11.04. Notice of Redemption........................................................61
Section 11.05. Deposit of Redemption Price.................................................63
Section 11.06. Securities Payable on Redemption Date.......................................63
Section 11.07. Securities Redeemed in Part.................................................64
ARTICLE XII
SINKING FUNDS
Section 12.01. Applicability of Article....................................................64
Section 12.02. Satisfaction of Sinking Fund Payments with Securities.......................65
Section 12.03. Redemption of Securities for Sinking Fund...................................65
ARTICLE XIII
REPAYMENT AT THE OPTION OF HOLDERS
Section 13.01. Applicability of Article....................................................65
Section 13.02. Repayment of Securities.....................................................66
Section 13.03. Exercise of Option..........................................................66
Section 13.04. When Securities Presented for Repayment Become Due and Payable..............67
Section 13.05. Securities Repaid in Part...................................................67
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE
Section 14.01. Applicability of Article; Company's Option to Effect Defeasance
or Covenant Defeasance......................................................68
Section 14.02. Defeasance and Discharge....................................................68
Section 14.03. Covenant Defeasance.........................................................68
Section 14.04. Conditions to Defeasance or Covenant Defeasance.............................69
Section 14.05. Deposited Money and Government Obligations to be Held in Trust;
Other Miscellaneous Provisions..............................................71
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
ARTICLE XV
MEETINGS OF HOLDERS OF SECURITIES
<S> <C> <C>
Section 15.01. Purposes for Which Meetings May be Called...................................72
Section 15.02. Call, Notice and Place of Meetings..........................................72
Section 15.03. Persons Entitled to Vote At Meetings........................................72
Section 15.04. Quorum; Action..............................................................72
Section 15.05. Determination of Voting Rights, Conduct and Adjournment of Meetings.........74
Section 15.06. Counting Votes and Recording Action of Meetings.............................74
</TABLE>
EXHIBIT A FORM OF REDEEMABLE OR NONREDEEMABLE SECURITY
EXHIBIT B-1 FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED TO RECEIVE
BEARER SECURITY OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE
EXCHANGE DATE
EXHIBIT B-2 FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND CEDEL S.A. IN
CONNECTION WITH THE EXCHANGE OF A PORTION OF A TEMPORARY
GLOBAL SECURITY OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE
EXCHANGE DATE
v
<PAGE>
THIS INDENTURE dated as of October 6, 1999, between METROPOLITAN MORTGAGE &
SECURITIES CO., INC., a Washington corporation (the "Company") having its
principal office at 601 West First Ave., Spokane, Washington 99201, and U.S.
BANK TRUST NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States of America, as Trustee hereunder
(the "Trustee"), having a Corporate Trust Office at 601 Union Street, Suite
2120, Seattle, Washington 98101.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its lawful
purposes debt Securities (hereinafter called the "Securities") evidencing its
indebtedness and has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of the Securities to be
issued in one or more series as provided in this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended (the "TIA"), that are deemed to be incorporated into this
Indenture and shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company in accordance with its terms have been done.
NOW, THEREFORE THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided unless the context otherwise requires:
(a) the terms defined in this Article I have the meanings assigned
to them in this Article I, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the TIA,
either directly or by reference therein have the meanings assigned to them
therein and the terms "cash transaction" and "self-liquidating paper," as
used in TIA Section 311 shall have the meanings assigned to them in the
rules of the Commission adopted under the TIA;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
<PAGE>
(d) the words "herein, "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act" when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Additional Amounts" means any additional amounts which are required by a
Security or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain taxes imposed on
certain Holders and which are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting Securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 6.11 to act on behalf of the Trustee to authenticate
Securities.
"Authorized Newspaper" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 5.01.
"Bearer Security" means any Security established pursuant to Section 2.01
which is payable to bearer.
"Board of Directors" means the board of directors of the Company, or any
committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
3.01, any day, other than a Saturday or Sunday, that is not a day on which
banking institutions in that Place of Payment or particular location are
authorized or required by law, regulation or executive order to close.
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"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Stock" means, with respect to any Person, all shares of capital
stock issued by such Person other than any Preferred Stock.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by its Chairman of the Board, the
President, any Executive Vice President, any Senior Vice President or Vice
President and by its Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Conversion Event" means the cessation of use of (a) a Foreign Currency
both by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (b) the ECU both within the European
Monetary System and for the settlement of transactions by public institutions of
or within the European Communities or (c) any currency unit (or composite
currency) other than the ECU for the purposes for which it was established.
"Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at 601 Union Street, Suite 2120,
Seattle, Washington 98101.
"Corporation" includes corporations, associations, companies and business
trusts.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning specified in Section 5.01.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
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"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Article V.
"Fiscal Year" means the fiscal year of the Company, which begins on October
1, and ends on September 30 of the following calendar year.
"Foreign Currency" means any currency, currency unit or composite currency,
including, without limitation, the ECU, issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, as used in the United States applied on a consistent basis.
"Global Security" means a security evidencing all or a part of a series of
Securities issued to and registered in the name of the depositary for such
series, or its nominee, in accordance with Section 3.05, and bearing the legend
prescribed in Section 2.03.
"Government Obligations" means securities which are (a) direct obligations
of the United States or the government which issued the Foreign Currency in
which the Securities of a particular series are payable, for the payment of
which its full faith and credit is pledged or (b) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States or such government which issued the Foreign Currency in which the
Securities of such series are payable, the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States or such
other government, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder of a
depository receipt; provided, however, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in whose
name a Security is registered in the Security Register and, in the case of a
Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
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"Indenture" means this instrument as originally executed or as it may be
supplemented or amended from time to time by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 3.01; provided, however, that, if at any time more than one Person is
acting as Trustee under this instrument, "Indenture" shall mean, with respect to
any one or more series of Securities for which such Person is Trustee, this
instrument as originally executed or as it may be supplemented or amended from
time to time by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of the, or
those, particular series of Securities for which such Person is Trustee
established as contemplated by Section 3.01, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest" when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity, and, when used with respect to a Security which provides for the
payment of Additional Amounts pursuant to Section 10.10, includes such
Additional Amounts.
"Interest Payment Date" when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity" when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, the President, any Executive Vice President, any Senior Vice
President or Vice President and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other counsel for the Company
and who shall be satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.02.
"Outstanding" when used with respect to Securities, means, as of the date
of determination, all Securities therefor authenticated and delivered under this
Indenture, except:
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(a) securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) securities, or portions thereof, for whose payment or redemption
(including repayment at the option of the Holder) money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities and any Coupons appertaining thereto; provided,
however, that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(c) securities, except to the extent provided in Sections 14.02 and
14.03, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article XIV;
(d) securities which have been paid pursuant to Section 3.06 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(e) securities converted into Common Stock or Preferred Stock pursuant
to or in accordance with this Indenture if the terms of such Securities
provide for convertibility pursuant to Section 3.01;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculation required by TIA Section 313, (i) the principal amount of an Original
Issue Discount Security that may be counted in making such determination or
calculation and that shall be deemed to be Outstanding for such purpose shall be
equal to the amount of principal thereof that would be (or shall have been
declared to be) due and payable, at the time of such determination, upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.02,
(ii) the principal amount of any Security denominated in a Foreign Currency that
may be counted in making such determination or calculation and that shall be
deemed Outstanding for such purpose shall be equal to the Dollar equivalent,
determined pursuant to Section 3.01 as of the date such Security is originally
issued by the Company, of the principal amount (or, in the case of an Original
Issue Discount Security, the Dollar equivalent as or such date of original
issuance of the amount determined as provided in clause (i) above) of such
Security, (iii) the principal amount of any Indexed Security that may be counted
in making such determination or calculation and that shall be deemed outstanding
for such purpose shall be equal to the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
Security pursuant to Section 3.01, and (iv) Securities owned by the Company or
of 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
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whether the Trustee shall be protected in making such calculation or 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 owned as provided in clause (iv) above 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" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities or Coupons on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" when used with respect to the Securities of or within
any series, means the place or places where the principal of (and premium, if
any) and interest on such Securities are payable as specified as contemplated by
Sections 3.01 and 10.02.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Stock" means, with respect to any Person, all capital stock, if
any, issued by such Person that are entitled to a preference or priority over
any other capital stock issued by such Person with respect to any distribution
of such Person's assets, whether by dividend or upon any voluntary or
involuntary liquidation, dissolution or winding up.
"Redemption Date" when used with respect to any Security to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" shall mean any Security which is registered in the
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Securities of or within any series means the date specified
for that purpose as contemplated by Section 3.01, whether or not a Business Day.
"Repayment Date" means, when used with respect to any Security to be repaid
at the option of the Holder, the date fixed for such repayment by or pursuant to
this Indenture.
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"Responsible Officer" when used with respect to the Trustee, means the
chairman or vice chairman of the board of directors, the chairman or vice
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "vice president"), the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above-designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
"Security" has the meaning stated in the first recital of this Indenture
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture; provided, however, that, if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.05.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X promulgated
under the Securities Act of 1933, as amended) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Company
pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Security or any installment
of principal thereof or interest thereon, means the date specified in such
Security or a coupon representing such installment of interest as the fixed date
on which the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" means a corporation a majority of the outstanding voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries of the Company. For the purposes of this definition, "voting
stock" means stock having voting power for the election of directors, whether at
all times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 9.05.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder; provided, however, that if
at any time there is more than one such Person,
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"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 3.01, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States Person" means, unless otherwise specified with respect to
any Securities pursuant to Section 3.01, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time of
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
Section 1.02. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel to the effect that, in the opinion of such counsel, all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (including certificates delivered
pursuant to Section 10.09) shall include:
(a) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(b) 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;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
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Section 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate,
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.04. Acts of Holders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are issuable
as Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article XV, or a combination of such
instruments and any such record. 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 or so voting
at any such meeting. 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 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 1.04. The record of any meeting of Holders
of Securities shall be proved in the manner provided in Section 15.06.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or
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other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other reasonable manner which the Trustee deems
sufficient.
The ownership of Registered Securities shall be proved by the Security
Register. As to any matter relating to beneficial ownership interests in any
Global Security, the appropriate depositary's records shall be dispositive for
purposes of this Indenture.
The ownership of Bearer Securities may be proved by the production of such
Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (a) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced or (b) such
Bearer Security is produced to the Trustee by some other Person or (c) such
Bearer Security is surrendered in exchange for a Registered Security or (d) such
Bearer Security is no longer Outstanding. The ownership of Bearer Securities
may also be proved in any other manner which the Trustee deems sufficient.
If the Company shall solicit from the Holders of Registered Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, in or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date
is fixed, 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 record at the close of business on such record date shall be deemed
to be Holders for the purposes 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, however, that no such authorization, agreement or
consent by the Holders on such record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Indenture not later
then eleven months after the record date.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu
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thereof in respect of anything done, omitted or suffered to be done by the
Trustee, any Security Registrar, any Paying Agent, any Authenticating Agent or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
Section 1.05. Notices, Etc., To Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at the address of its Corporate Trust Office
specified in the first paragraph of this Indenture, Attention: Corporate
Trust Department;
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company, Attention: Chief
Financial Officer (with a copy to the Company's general counsel); or
(c) either the Trustee or the Company, by the other party shall be
sufficient for every purpose hereunder if given by facsimile transmission,
receipt confirmed by telephone followed by an original copy delivered by
guaranteed overnight courier; if to the Trustee at facsimile number (206)
461-4175; and if to the Company at facsimile number (509) 835-2758.
Section 1.06. Notice to Holders; Waiver. Where this Indenture provides
for notice of any event to Holders of Registered Securities by the Company or
the Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, if any, prescribed for the giving of such notice. In any case
where notice to Holders of Registered Securities is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice.
If by reason of the suspension of or irregularities in regular mail service
or by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to Holders of Registered Securities as shall be
made with the approval of the Trustee shall constitute a sufficient notification
to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified with
respect to any Securities pursuant to Section 3.01, where this Indenture
provides for notice to Holders of Bearer
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Securities of any event, such notice shall be sufficiently given if published in
an Authorized Newspaper in the City of New York and the City of Seattle and in
such other city or cities as may be specified in such Securities on a Business
Day, such publication to be not later than the latest date, and not earlier than
the earliest date, if any, prescribed for the giving of such notice. Any such
notice shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication.
If by reason of the suspension of publication of any Authorized Newspaper
or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 1.07. Counterparts; Effect of Headings and Table of Contents.
This Indenture may be executed in any number of counterparts, each of which when
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 1.08. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 1.09. Severability Clause. In case any provision in this
Indenture or in any Security or coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 1.10. Benefits of Indenture. Nothing in this Indenture or in the
Securities or coupons, express or implied, shall give to any Person, other than
the parties hereto, any Security Registrar, any Paying Agent, any Authenticating
Agent and their successors hereunder and the Holders any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 1.11. Governing Law. This Indenture and the Securities and
coupons shall be governed by and construed in accordance with the law of the
State of Washinton applicable to
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agreements made and to be performed therein. This Indenture is subject to the
provisions of the TIA that are required to be part of this Indenture and shall,
to the extent applicable, be governed by such provisions.
Section 1.12. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date, Repayment Date, Stated Maturity or Maturity of any
Security or the last date on which a Holder has the right to convert or exchange
a Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or any Security or coupon
other than a provision in the Securities of any series which specifically states
that such provision shall apply in lieu hereof), payment of interest or any
Additional Amounts or principal (and premium, if any) or conversion or exchange
of such security need not be made at such Place of Payment on such date, but
(except as otherwise provided in the supplemental indenture with respect to such
Security) may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date,
Redemption Date, Repayment Date or at the Stated Maturity or Maturity, or on
such last day of conversion or exchange, provided that no interest shall accrue
on the amount so payable for the period from and after such Interest Payment
Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity, as the case may be.
Section 1.13. Immunity of Stockholders, Directors, Officers and Agents
of the Company. No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any past, present or future stockholder,
employee, officer or director, as such, of the Company or of any successor,
either directly or through the Company or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the Holders
and as part of the consideration for the issue of the Securities.
Section 1.14. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
or deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
ARTICLE II
SECURITIES FORMS
Section 2.01. Forms of Securities. The Registered Securities, if any, of
each series and the Bearer Securities, if any, of each series and related
coupons shall be substantially in the form of Exhibit A hereto or in such other
form as shall be established in one or more indentures supplemental hereto or
approved from time to time by or pursuant to a Board Resolution in accordance
with Section 3.01, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or any indenture supplemental
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hereto, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate 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.
Unless otherwise specified as contemplated by Section 3.01, Bearer
Securities shall have interest coupons attached.
Subject to Section 3.04, the definitive Securities and coupons shall be
printed, lithographed or engraved, or produced by any combination of these
methods, on a steel engraved border or steel engraved borders or mechanically
reproduced on safety paper or may be produced in any other manner, all as
determined by the officers of the Company executing such Securities or coupons,
as evidenced by their execution of such Securities or coupons.
Section 2.02. Form of Trustee's Certificate of Authentication. Subject
to Section 6.11, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
By
-------------------------------------
Authorized Signatory
Section 2.03. Securities Issuable in Global Form. If Securities of or
within a series are issuable in the form of one or more Global Securities, then,
notwithstanding clause (h) of Section 3.01 and the provisions of Section 3.02,
any such Global Security or Securities may provide that it or they shall
represent the aggregate amount of all Outstanding Securities of such series (or
such lesser amount as is permitted by the terms thereof) from time to time
endorsed thereon and may also provide that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. Any endorsement of any Global Security to
reflect the amount, or any increase or decrease in the amount, or changes in the
rights of Holders thereof, of Outstanding Securities represented thereby shall
be made by the Trustee in such manner or by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 3.03 or 3.04. Subject to the provisions of Section 3.03 and,
if applicable, Section 3.04, the Trustee shall deliver and redeliver any Global
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 3.03 or 3.04 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery
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of a Global Security shall be in writing but need not comply with Section 1.02
and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.03 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Global Security
together with written instructions (which need not comply with Section 1.02 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 3.03.
Notwithstanding the provisions of Section 3.07, unless otherwise specified
as contemplated by Section 3.01, payment of principal of and any premium and
interest on any Global Security shall be made to the Person or Persons specified
therein.
Notwithstanding the provisions of Section 3.08 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent Global Security (a) in the
case of a permanent Global Security in registered form, the Holder of such
permanent Global Security in registered form or (b) in the case of a permanent
Global Security in bearer form, Euroclear or CEDEL.
Any Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:
This Security is a Global Security within the meaning set forth in the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Security is exchangeable for
Securities registered in the name of a person other than the Depositary or
its nominee only in the limited circumstances described in the Indenture,
and may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or its nominee to a
successor Depositary or its nominee.
ARTICLE III
THE SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 3.03, 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 such series from all other series of Securities);
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(b) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.07 or 13.05);
(c) the date or dates, or the method by which such date or dates will be
determined, on which the principal of the Securities of the series shall be
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 will be payable and the Regular Record
Date, if any, for the interest payable on any Registered Security on any
Interest Payment Date, or the method by which such date shall be
determined, and the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
(e) the place or places where the principal of (and premium, if any),
interest, if any, on, and Additional Amounts, if any, payable in respect
of, Securities of the series shall be payable, any Securities of the series
may be surrendered for registration of transfer, exchange or conversion
(each to the extent applicable) and notices or demands to or upon the
Company in respect of the Securities of the series and this Indenture may
be served;
(f) the period or periods within which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in which, and other 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 the option;
(g) the obligation, if any, of the Company to redeem, repay or purchase
Securities of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or periods
within which or the date or dates on which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in which, and other terms and conditions upon which Securities
of the series shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(h) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(i) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(j) the price (expressed as a percentage of the principal amount thereof
or otherwise) at which the Securities of the series will be issued and, if
other than the
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principal amount thereof, the portion of the principal amount of Securities
of the series that shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 5.02 or, if applicable, the portion of
the principal amount of Securities of the series that is convertible in
accordance with the provisions of this Indenture, or the method by which
such portion shall be determined;
(k) if other than Dollars, the Foreign Currency or currencies in which
payment of the principal of (and premium, if any) and interest or
Additional Amounts, if any, on the Securities of the series shall be
payable or in which the Securities of the series shall be denominated, the
manner of determining the equivalent thereof in Dollars for purposes of the
definition of "Outstanding" in Section 1.01 and other terms and conditions
relating to this subparagraph (k);
(l) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula or
method may be based, without limitation, on one or more currencies,
currency units, composite currencies, commodities, equity indices or other
indices), and the manner in which such amounts shall be determined;
(m) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a currency
or currencies, currency unit or units or composite currency or currencies
other than that in which such Securities are denominated or stated to be
payable, the period or periods within which, and the terms and conditions
upon which, such election may be made, and the time and manner of, and
identity of the exchange rate agent with responsibility for, determining
the exchange rate between the currency or currencies, currency unit or
units or composite currency or currencies in which such Securities are
denominated or stated to be payable and the currency or currencies,
currency unit or units or composite currency or currencies in which such
Securities are to be so payable;
(n) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified and the provisions, if any, relating to the subordination of the
Securities of the series to other obligations of the Company;
(o) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to Securities of the
series, whether or not such Events of Default or covenants are consistent
with the Events of Default or covenants set forth herein, and any change in
the right of any trustee or any of the Holders to declare the principal
amount of any such Securities due and payable;
(p) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities
and the terms upon which Bearer Securities of
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the series may be exchanged for Registered Securities of the series and
vice versa (if permitted by applicable laws and regulations), whether any
Securities of the series are to be issuable initially in temporary global
form and whether any Securities of the series are to be issuable in
permanent global form with or without coupons and, if so, whether
beneficial owners of interests in any such permanent Global Security may
exchange such interests for Securities of such series and of like tenor of
any authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in Section
3.05, and, if Registered Securities of the series are to be issuable as a
Global Security, the identity of the depositary for such series;
(q) the date as of which any Bearer Securities of the series and any
temporary Global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
(r) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, the manner in
which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on a
temporary Global Security on an Interest Payment Date will be paid if other
than in the manner provided in Section 3.04;
(s) the applicability, if any, of Sections 14.02 and/or 14.03 to the
Securities of the series and any provisions in modification of, in addition
to or in lieu of any of the provisions of Article XIV;
(t) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and/or terms
of such certificates, documents or conditions;
(u) if the Securities of the series are to be issued upon the exercise
of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(v) whether and under what circumstances the Company will pay Additional
Amounts as contemplated by Section 10.10 on the Securities of the series to
any Holder who is not a United States Person (including any modification to
the definition of such term) in respect of any tax, assessment or
governmental charge and, if so, whether the Company will have the option to
redeem such Securities rather than pay such Additional Amounts (and the
terms of any such option);
(w) the obligation, if any, of the Company to permit the conversion of
the Securities of such series into the Company's Common Stock or Preferred
Stock, as the case may be, and the terms and conditions upon which such
conversion shall be effected
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(including, without limitation, the initial conversion price or rate, the
conversion period, any adjustment of the applicable conversion price and
any requirements relative to the reservation of such shares for purposes of
conversion) and applicable limitations on the ownership or transferability
of the Common Stock or Preferred Stock into which such Securities are
convertible;
(x) the provisions, if any, relating to any security provided for the
Securities of the series; and
(y) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 3.03) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or before the delivery
of the Officers' Certificate setting forth the terms of the Securities of such
series.
Section 3.02. Denominations. The Securities of each series shall be
issuable in such denominations as shall be specified as contemplated by Section
3.01. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Securities of such series, other than Securities issued in global form (which
may be of any denomination), shall be issuable in denominations of $1,000 and
any integral multiple thereof.
Section 3.03. Execution, Authentication, Delivery and Dating. The
Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by its Chairman of the Board, its President or one of its Executive
or Senior Vice Presidents, under its corporate seal reproduced thereon, and
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities and coupons may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices before the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
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At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 3.01, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit B-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 3.01, dated no earlier than 15 days before the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section 3.03 and Section 3.04, the notation of a beneficial
owner's interest therein upon original issuance of such Security or upon
exchange of a portion of a temporary Global Security shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent Global Security. Except as permitted by Section
3.06, the Trustee shall not authenticate and deliver any Bearer Security unless
all appurtenant coupons for interest then matured have been detached and
cancelled.
If all the Securities of any series are not to be issued at one time and if
the Board Resolution or supplemental indenture establishing such series shall so
permit, such Company Order may set forth procedures acceptable to the Trustee
for the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. 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 TIA Section 315(a) through 315(d)) shall be fully protected in
relying upon:
(a) an Opinion of Counsel stating that:
(i) the form or forms of such Securities and any coupons have
been established in conformi ty with the provisions of this Indenture;
(ii) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(iii) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in accordance
with this Indenture, authenticated and delivered by the Trustee in
accordance with this Indenture and issued by the Company in the manner
and subject to any conditions specified in such Opinion of Counsel, will
constitute legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
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bankruptcy, insolvency, fraudulent transfer, reorganization and other
similar laws of general applicability relating to or affecting the
enforcement of creditors' rights generally and to general equitable
principles; and
(b) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities
have been complied with and that, to the best of the knowledge of the
signers of such certificate, no Event of Default with respect to any of the
Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.01 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 3.01 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security shall be dated as of the date specified as contemplated by
Section 3.01.
No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
or Security to which such coupon appertains a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security
(including a Global Security) shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
3.09 together with a written statement (which need not comply with Section 1.02
and need not be accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Company, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
Section 3.04. Temporary Securities. Pending the preparation of definitive
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued, in registered form, or, if authorized, in bearer form
with one or more coupons or without coupons, and with such appropriate
insertions, omissions,
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substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities. In
the case of Securities of any series, such temporary Securities may be in global
form.
Except in the case of temporary Securities (which shall be exchanged as
otherwise provided herein or as otherwise provided in or pursuant to a Board
Resolution), if temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series (accompanied by any nonmatured
coupons appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations; provided,
however, that no definitive Bearer Security shall be delivered in exchange for a
temporary Registered Security; and provided further that a definitive Bearer
Security shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 3.03. Until so exchanged,
the temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series.
Unless otherwise provided in or pursuant to a Board Resolution, the
following provisions of this Section 3.04 shall govern the exchange of temporary
Securities other than through the facilities of The Depository Trust Company
("DTC"). If any such temporary Security is issued in global form, then such
temporary Global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and CEDEL, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary Global Security, executed by the Company. On or after
the Exchange Date, such temporary Global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary Global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary Global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary Global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 3.01, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
however, that, unless otherwise specified in such temporary Global Security,
upon such presentation by the Common Depositary, such temporary Global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the
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portion of such temporary global security held for its account then to be
exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by CEDEL as to the portion of such temporary Global Security held for its
account then to be exchanged, each in the form set forth in Exhibit B-2 to this
Indenture or in such other form as may be established pursuant to Section 3.01;
and provided further that definitive Bearer Securities shall be delivered in
exchange for a portion of a temporary Global Security only in compliance with
the requirements of Section 3.03.
Unless otherwise specified in such temporary Global Security, the interest
of a beneficial owner of Securities of a series in a temporary Global Security
shall be exchanged for definitive Securities of the same series and of like
tenor following the Exchange Date when the account holder instructs Euroclear or
CEDEL, as the case may be, to request such exchange on his behalf and delivers
to Euroclear or CEDEL, as the case may be, a certificate in the form set forth
in Exhibit B-1 to this Indenture (or in such other form as may be established
pursuant to Section 3.01), dated no earlier than 15 days prior to the Exchange
Date, copies of which certificate shall be available from the offices of
Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary Global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary Global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive
Securities in bearer form to be delivered in exchange for any portion of a
temporary Global Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 3.01, interest payable on a temporary Global Security
on an Interest Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euroclear and CEDEL on such
Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee of a
certificate or certificates in the form set forth in Exhibit B-2 to this
Indenture (or in such other forms as may be established pursuant to Section
3.01), for credit without further interest on or after such Interest Payment
Date to the respective accounts of Persons who are the beneficial owners of such
temporary Global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth in Exhibit B-1 to this Indenture (or in such
other forms as may be established pursuant to Section 3.01). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs and of the third paragraph of Section 3.03 and the interests of the
Persons who are the beneficial owners of the temporary Global Security with
respect to which such certification was made will be exchanged for definitive
Securities of the same series and of like tenor on the Exchange Date or the date
of certification if such date occurs after the Exchange Date, without further
act or deed by such beneficial owners. Except as otherwise provided in this
paragraph, no payments of principal or interest owing with respect to a
beneficial interest in a temporary Global Security
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will be made unless and until such interest in such temporary Global Security
shall have been exchanged for an interest in a definitive Security. Any interest
so received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
Section 3.05. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively 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. The Security
Register shall be in written form or any other form capable of being converted
into written form within a reasonable time. The Trustee, at its Corporate Trust
Office, is hereby initially appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities on such Security Register as
herein provided. If the Trustee shall cease to be Security Registrar, it shall
have the right to examine the Security Register at all reasonable times.
Subject to the provisions of this Section 3.05, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like aggregate principal
amount, bearing a number not contemporaneously outstanding, and containing
identical terms and provisions.
Subject to the provisions of this Section 3.05, at the option of the
Holder, Securities of any series may be exchanged for other Securities of the
same series, of any authorized denomination or denominations and of a like
aggregate principal amount, containing identical terms and provisions, upon
surrender of the Securities to be exchanged at any such office or agency.
Whenever any such 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. Unless otherwise
specified with respect to any series of Securities as contemplated by Section
3.01, Bearer Securities may not be issued in exchange for Securities.
If (but only if) permitted by the applicable Board Resolution and (subject
to Section 3.03) set forth in the applicable Officers' Certificate, or in any
indenture supplemental hereto, delivered as contemplated by Section 3.01, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor, upon surrender of the Bearer Securities to
be exchanged at any such office or agency, with all unmatured coupons and all
matured coupons in default thereto appertaining. If the Holder of a Bearer
Security is unable to produce any such unmatured coupon or coupons or matured
coupon or coupons in default, any such permitted exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
in an amount equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by the Company
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and the Trustee if there is furnished to them such security or indemnity as they
may require to save each of them and any Paying Agent harmless. If thereafter
the Holder of such Security shall surrender to any Paying Agent any such missing
coupon in respect of which such a payment shall have been made, such Holder
shall be entitled to receive the amount of such payment; provided, however,
that, except as otherwise provided in Section 10.02, interest represented by
coupons shall be payable only upon presentation and surrender of those coupons
at an office or agency located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any such
office or agency in a permitted exchange for a Registered Security of the same
series and like tenor after the close of business at such office or agency on
(a) any Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date or (b) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such coupon when due in accordance with the provisions of this
Indenture. 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.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.01, any permanent Global Security shall be
exchangeable only as provided in this paragraph. If the depositary for any
permanent Global Security is DTC, then, unless the terms of such Global Security
expressly permit such Global Security to be exchanged in whole or in part for
definitive Securities, a Global Security may be transferred, in whole but not in
part, only to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor
to DTC for such Global Security selected or approved by the Company or to a
nominee of such successor to DTC. If at any time DTC notifies the Company that
it is unwilling or unable to continue as depositary for the applicable Global
Security or Securities or if at any time DTC ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, if so required
by applicable law or regulation, the Company shall appoint a successor
depositary with respect to such Global Security or Securities. If (a) a
successor depositary for such Global Security or Securities is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, (b) an Event of Default
has occurred and is continuing and the beneficial owners representing a majority
in principal amount of the applicable series of Securities represented by such
Global Security or Securities advise DTC to cease acting as depositary for such
Global Security or Securities or (c) the Company, in its sole discretion,
determines at any time that all Outstanding Securities (but not less than all)
of any series issued or issuable in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities, then the
Company shall execute, and the Trustee shall authenticate and deliver,
definitive Securities of like series, rank, tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such Global
Security or Securities. If any beneficial owner of an interest in a permanent
Global Security is otherwise entitled to exchange such interest for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by
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Section 3.01 and provided that any applicable notice provided in the permanent
Global Security shall have been given, then without unnecessary delay but in any
event not later than the earliest date on which such interest may be so
exchanged, the Company shall execute, and the Trustee shall authenticate and
deliver, definitive Securities in aggregate principal amount equal to the
principal amount of such beneficial owner's interest in such permanent Global
Security. On or after the earliest date on which such interests may be so
exchanged, such permanent Global Security shall be surrendered for exchange by
DTC or such other depositary as shall be specified in the Company Order with
respect thereto to the Trustee, as the Company's agent for such purpose;
provided, however, that no such exchanges may occur during a period beginning at
the opening of business 15 days before any selection of Securities to be
redeemed and ending on the relevant Redemption Date if the Security for which
exchange is requested may be among those selected for redemption; and provided
further that no Bearer Security delivered in exchange for a portion of a
permanent Global Security shall be mailed or otherwise delivered to any location
in the United States. If a Registered Security is issued in exchange for any
portion of a permanent Global Security after the close of business at the office
or agency where such exchange occurs on (i) any Regular Record Date and before
the opening of business at such office or agency on the relevant Interest
Payment Date or (ii) any Special Record Date and the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Registered Security, but will be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such permanent Global
Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer (including evidence of title and identity) in form
satisfactory to the Company, the Trustee, the Company's designated agent (if
any) and the Security Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 9.06, 11.07 or 13.05 not involving any
transfer.
The Company or the Trustee, as applicable, shall not be required to (a)
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before date of mailing of the relevant notice of redemption and
ending at the close of business on (i) if such Securities are issuable only as
Registered Securities, the date of the mailing of the relevant notice of
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redemption and (ii) if such Securities are issuable as Bearer Securities, the
day of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the date of mailing of the relevant notice of redemption, or (b)
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (c) exchange
any Bearer Security so selected for redemption, except that such Bearer Security
may be exchanged for a Registered Security of that series and like tenor;
provided, however, that such Registered Security shall be simultaneously
surrendered for redemption or (d) issue, register the transfer of or exchange
any Security which has been surrendered for repayment at the option of the
Holder, except the portion, if any, of such Security not to be so repaid.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (a) evidence
to their satisfaction of the destruction, loss or theft of any Security or
coupon and (b) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case any
such mutilated, destroyed, lost or stolen Security or coupon has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any),
any interest on and any Additional Amounts with respect to Bearer Securities
shall, except as otherwise provided in Section 10.02, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 3.01, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
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Upon the issuance of any new Security under this Section 3.06, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section 3.06 in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security and its coupons, if any,
or the destroyed, lost or stolen coupon shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.
The provisions of this Section 3.06 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons.
Section 3.07. Payment of Interest; Interest Rights Reserved. Except as
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 3.01, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 10.02; provided, however, that each
installment of interest on any Registered Security may at the Company's option
be paid by (a) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 3.08, to the address of
such Person as it appears on the Security Register or (b) wire transfer to an
account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 3.01 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 3.01, every permanent
Global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case may be,
with respect to that portion of such permanent Global Security held for its
account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent Global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such
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Bearer Security, but will be payable only to the Holder of such coupon when due
in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 3.01, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election, in each case as
provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Registered Security of such series and the date of the proposed
payment (which shall not be less than 20 days after such notice is received
by the Trustee), and at the same time the Company shall deposit with the
Trustee an amount of money in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 3.01
for the Securities of such series) equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at his address as it appears in
the Security Register not less than 10 days prior to such Special Record
Date. The Trustee may, in its discretion, in the name and at the expense of
the Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each Place of Payment, but such publications shall
not be a condition precedent to the establishment of such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following clause (b). In case a Bearer
Security of any series is surrendered at the office or agency in a Place of
Payment for such series in exchange for a Registered Security of such
series after the close of business at such office or agency on any Special
Record Date and before the opening of business at such office or agency on
the related proposed date for payment of Defaulted Interest, such Bearer
Security shall be
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surrendered without the coupon relating to such proposed date of payment
and Defaulted Interest will not be payable on such proposed date of payment
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any Securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee or the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section 3.07 and Section 3.05,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 3.08. Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium, if any), and (subject to
Sections 3.05 and 3.07) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary. All such payments so made to any
such Person, or upon such Person's order, shall be valid, and, to the extent of
the sum or sums so paid, effectual to satisfy and discharge the liability for
money payable upon any such Security.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
No Holder of any beneficial interest in any Global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such Global Security and such depositary shall be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. None of the Company, the Trustee, 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 Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
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Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to such
Global Security or impair, as between such depositary and owners of beneficial
interests in such Global Security, the operation of customary practices
governing the exercise of the rights of such depositary (or its nominee) as
Holder of such Global Security.
Section 3.09. Cancellation. All Securities and coupons surrendered for
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or conversion or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee, and any such Securities and coupons and Securities and coupons
surrendered directly to the Trustee for any such purpose shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. If the Company shall so 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. No Securities shall
be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section 3.09, except as expressly permitted by this Indenture.
Cancelled Securities and coupons held by the Trustee shall be destroyed by the
Trustee and the Trustee shall deliver a certificate of such destruction to the
Company, unless the Trustee is otherwise directed by a Company Order.
Section 3.10. Computation of Interest. Except as otherwise specified as
contemplated by Section 3.01 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. This Indenture shall
upon Company Request cease to be of further effect with respect to any series of
Securities specified in such Company Request (except as to any surviving rights
of registration of transfer or exchange of Securities of such series herein
expressly provided for and any right to receive Additional Amounts, as provided
in Section 10.10), and the Trustee, upon receipt of a Company Order, and at the
expense of the Company, shall execute instruments in form and substance
satisfactory to the Trustee and the Company acknowledging satisfaction and
discharge of this Indenture as to such series when
(a) either:
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(i) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (A)
coupons appertaining to Bearer Securities surrendered for exchange for
Securities and maturing after such exchange, whose surrender is not
required or has been waived as provided in Section 3.05, (B) Securities and
coupons of such series which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.06, (C) coupons
appertaining to Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as provided in
Section 11.06 and (D) Securities and coupons of such series for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.03) have been
delivered to the Trustee for cancellation; or
(ii) all Securities of such series and, any coupons appertaining thereto
not theretofore delivered to the Trustee for cancellation:
(A) have become due and payable;
(B) will become due and payable at their Stated Maturity within
one year; or
(C) if redeemable at the option of the Company, are to be called
for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company;
and the Company, in the case of (A), (B) or (C) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in the currency or currencies, currency
unit or units or composite currency or currencies in which the Securities
of such series are payable, sufficient to pay and discharge the entire
indebtedness on such Securities and such coupons not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and
interest, and any Additional Amounts with respect thereto, to the date of
such deposit (in the case of Securities which have become due and payable)
or to the Stated Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 6.06, the obligations of the
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Company to any Authenticating Agent under Section 6.11 and, if money shall have
been deposited with and held by the Trustee pursuant to clause (ii) of this
Section 4.01, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
Section 4.02. Application of Trust Funds. Subject to the provisions of the
last paragraph of Section 10.03, all money deposited with the Trustee pursuant
to Section 4.01 shall be held in trust and applied by it, in accordance with the
provisions of the Securities, the coupons and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto
of the principal (and premium, if any) and any interest and Additional Amounts
for whose payment such money has been deposited with or received by the Trustee,
but such money need not be segregated from other funds except to the extent
required by law.
ARTICLE V
REMEDIES
Section 5.01. Events of Default. "Event of Default," wherever used herein
with respect to any particular series of Securities, means any one of the
following events (whatever the reason for such Event of Default and whether or
not it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of that series or of any coupon
appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, and continuance of such default for a period of 30
days;
(b) default in the payment of the principal of (or premium, if any, on)
any Security of that series when it becomes due and payable at its
Maturity;
(c) default in the deposit of any sinking fund payment, when and as due
by the terms of any Security of that series;
(d) default in the performance, or breach, of any covenant or warranty
of the Company set forth in this Indenture with respect to any Security of
that series (other than a covenant or warranty a default in the performance
of which or the breach of which is elsewhere in this Section 5.01
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the Outstanding
Securities of that series a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(e) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any of its Subsidiaries
(including obligations under leases required to be capitalized on the
balance sheet of the lessee under GAAP), in
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an aggregate principal amount in excess of $10 million or under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money borrowed
by the Company or any of its Subsidiaries (including such leases) in an
aggregate principal amount in excess of $10 million whether such
indebtedness now exists or shall hereafter be created, which default shall
have resulted in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable or such obligations being accelerated, without such acceleration
having been rescinded or annulled; or
(f) the Company or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or
(iv) makes a general assignment for the benefit of its
creditors; or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of either of their property;
or
(iii) orders the liquidation of the Company or any Significant
Subsidiary and the order or decree remains unstayed and in effect for
90 days; or
(h) any other Event of Default provided with respect to Securities of
that series.
As used in this Section 5.01, the term "Bankruptcy Law" means Title 11,
U.S. Code or any similar federal or state law for the relief of debtors and the
term "Custodian" means any receiver, trustee, assignee, liquidator or other
similar official under any Bankruptcy Law.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if Securities of
that series are Original Issue Discount Securities or Indexed Securities, such
portion of the
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principal as may be specified in the terms thereof) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal or specified portion thereof shall become immediately
due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article V provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration of acceleration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient
to pay in the currency, currency unit or composite currency in which the
Securities of such series are payable (except as otherwise specified
pursuant to Section 3.01 for the Securities of such series):
(i) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of that series
and any related coupons;
(ii) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
borne by or provided for in such Securities;
(iii) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities; and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium, if any) or
interest on Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(a) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series and any related
coupon when such interest
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or Additional Amount becomes due and payable and such default continues
for a period of 30 days; or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as Trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities of any series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of
principal (and premium, if any) and interest and Additional Amounts, if
any, owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
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compensation, expenses, disbursements and advances of the Trustee and its
agents and counsel) and of the Holders allowed in such judicial proceeding;
and
(b) to collect and receive any money or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments
to the Trustee, and if the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of
the Trustee and any predecessor Trustee, their agents and counsel, and any
other amounts due the Trustee or any predecessor Trustee under Section
6.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Securities, and it shall not be necessary to make any Holders of
the Securities parties to any such proceedings.
Section 5.05. Trustee May Enforce Claims Without Possession of Securities
or Coupons. All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee and its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
Section 5.06. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article V shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest and any
Additional Amounts, upon presentation of the Securities or coupons, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST, to the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.06;
SECOND, to the payment of the amounts then due and unpaid upon the
Securities and coupons for the principal (and premium, if any) and interest
and any Additional
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Amounts payable, in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Securities and
coupons for principal (and premium, if any), interest and Additional
Amounts, respectively; and
THIRD, to the payment of the remainder, if any, to the Company.
Section 5.07. Limitation on Suits. No Holder of any Security of any series
or any related coupon shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 5.08. Unconditional Rights of Holders to Receive Principal,
Premium, if any, Interest and Additional Amounts. Notwithstanding any other
provision in this Indenture, the Holder of any Security or coupon shall have the
right, which is absolute and unconditional, to receive payment of the principal
of (and premium, if any) and (subject to Sections 3.05 and 3.07) interest on,
and any Additional Amounts in respect of, such Security or payment of such
coupon on the respective due dates expressed in such Security or coupon (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
Section 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this
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Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, the Company, the Trustee and the Holders of Securities and
coupons shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or coupons in the last paragraph of Section 3.06, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Securities or coupons is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission not Waiver. No delay or omission of the
Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
Section 5.12. Control by Holders of Securities. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture;
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(c) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Holders.
Section 5.13. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all
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the Securities of such series and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default:
(a) in the payment of the principal of (or premium, if any) or interest
on or Additional Amounts payable in respect of any Security of such series
or any related coupons; or
(b) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
Section 5.14. Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.15. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of any undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 5.15 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium, if any) or
interest on any Security on or after the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on or after the Redemption
Date).
ARTICLE VI
THE TRUSTEE
Section 6.01. Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such default hereunder known to the
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Trustee, unless such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the principal of (or
premium, if any) or interest on or any Additional Amounts with respect to any
Security of such series, or in the payment of any sinking fund installment with
respect to the Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interest of
the Holders of the Securities and coupons of such series; and provided further
that in the case of any default or breach of the character specified in Section
5.01(d) with respect to the Securities and coupons of such series, no such
notice to Holders shall be given until at least 60 days after the occurrence
thereof. For the purpose of this Section 6.01, the term "default" means any
event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to the Securities of such series.
Section 6.02. Certain Rights of Trustee. Subject to the provisions of TIA
Section 315(a) through 315(d):
(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 believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto,
to the Trustee for authentication and delivery pursuant to Section 3.03
which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or power vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
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(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document, unless requested
in writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of any series; provided
that, if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such examination shall be paid by the Holders or, if paid by the Trustee,
shall be repaid by the Holders upon demand. The Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, relevant to the facts or matters that
are the subject of its inquiry, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion, rights or power conferred upon it by this
Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
Section 6.03. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons 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 or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
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Section 6.04. May Hold Securities. The Trustee, any Paying Agent,
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and coupons and subject to TIA Sections 310(b) and 311, and may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
Section 6.05. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
Section 6.06. Compensation and Reimbursement. The Company agrees:
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse each of the Trustee and any predecessor 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 reasonable expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(c) to indemnify each of the Trustee and any predecessor
Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its own part, arising
out of or in connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.01(e) or Section 5.01(f), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company under
this Section 6.06, the Trustee shall have a lien prior to the Securities upon
all property and money held or collected by the Trustee as such, except money
held in trust for the payment of principal of (or premium, if any) or interest
on particular Securities or any coupons.
The provisions of this Section 6.06 shall survive the termination of this
Indenture.
Section 6.07. Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such
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corporation publishes reports of condition at least annually, pursuant to law or
the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section 6.07,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.07, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article VI.
Neither the Company nor any Person directly or indirectly controlling or
controlled by, or under common control with, the Company shall serve as Trustee.
Section 6.08. Resignation and Removal; Appointment of Successor. No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article VI shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.09.
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 an instrument
of acceptance by a successor Trustee shall not have been delivered to the
Trustee within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and to the
Company.
If at any time:
(a) the Trustee shall fail to comply with the provisions of
TIA Section 310(b) after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months; or
(b) the Trustee shall cease to be eligible under Section 6.07
and shall fail to resign after written request therefor by the Company or
by any Holder of a Security who has been a bona fide Holder of a Security
for at least six months; or
(c) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
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If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause with respect to
the Securities of one or more series, the Company, by 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). 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, 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 hereinafter provided, 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 Securities of such series.
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 in the manner
provided for notices to the Holders of Securities in Section 1.06. 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 6.09. Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 6.06.
In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto, pursuant to
Article IX, wherein each successor Trustee shall accept such appointment and
which (a) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates, (b) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable
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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 (c) 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 as co-
Trustees of the same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in this
Section 6.09, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article VI.
Section 6.10. 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;
provided such corporation shall be otherwise qualified and eligible under this
Article VI, without the execution or filing of any paper or any further act on
the part of the parties hereto. In case any Securities or coupons 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 or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
Section 6.11. Appointment of Authenticating Agent. At any time when any
of the Securities remain Outstanding, the Trustee may appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption or
repayment thereof, 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
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the Trustee hereunder. Any such appointment shall be evidenced by an instrument
in writing signed by a Responsible Officer of the Trustee, a copy of which
instrument shall be promptly furnished to the Company. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a bank or trust company or
corporation organized and doing business and in good standing under the laws of
the United States or of any state or the District of Columbia authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or examination by
federal or state authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 6.11, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section 6.11, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 6.11.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 6.11, without the execution or filing of any paper or further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time resign
by giving written notice of resignation to the Trustee for such series and to
the Company. The Trustee for any series of Securities may at any time terminate
the agency of an Authenticating Agent by giving written notice of termination to
such Authenticating Agent and to 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 6.11, the Trustee for such series may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment to all Holders of Securities of the series
with respect to which such Authenticating Agent will serve in the manner set
forth in Section 1.06. 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 herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 6.11.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation, including reimbursement of its reasonable expenses for
its services under this Section 6.11.
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If an appointment with respect to one or more series is made pursuant to
this Section 6.11, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
By
---------------------------------
Authenticating Agent
By
---------------------------------
Authorized Signatory
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Disclosure of Names and Addresses of Holders. Every Holder
of Securities or coupons, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
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 TIA Section 312(b).
Section 7.02. Reports by Trustee. Within 60 days after November 27th of
each year commencing with the first November 27th after the first issuance of
Securities pursuant to this Indenture, the Trustee shall transmit by mail to all
Holders of Securities as provided in TIA Section 313(c) a brief report dated as
of such November 27th if required by TIA Section 313(a).
Section 7.03. Reports by Company. The Company will:
(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, as amended; or, if the Company is
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not required to file information, documents or reports pursuant to either
of such Sections, then it will 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, as amended, 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 by mail to the Holders of Securities, within 30
days after the filing thereof with the Trustee, in the manner and to the
extent provided in TIA Section 313(c), such summaries of any information,
documents and reports required to be filed by the Company pursuant to
clauses (a) and (b) of this Section 7.03 as may be required by rules and
regulations prescribed from time to time by the Commission.
Section 7.04. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, not later than 15 days after the Regular
Record Date for interest for each series of Securities, a list, in such
form as the Trustee may reasonably require, of the names and addresses of
the Holders of Securities of such series as of such Regular Record Date or,
if there is no Regular Record Date for interest for such series of
Securities, semiannually, upon such dates as are set forth in the Board
Resolution or indenture supplemental hereto authorizing such series, 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.
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
Section 8.01. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other entity, provided that in any such
case (a) either the Company shall be the continuing entity, or the successor
entity (if other than the Company) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such assets
shall be an entity
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organized and existing under the laws of the United States or a state thereof
and such successor entity shall expressly assume the due and punctual payment of
the principal of (and premium, if any) and any interest (including all
Additional Amounts, if any, payable pursuant to Section 10.10) on all of the
Securities, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company by supplemental indenture, complying with Article IX,
satisfactory to the Trustee, executed and delivered to the Trustee by such
entity and (b) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of such successor entity, the
Company or any Subsidiary as a result thereof as having been incurred by such
successor entity, the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or the lapse
of time, or both, would become an Event of Default, shall have occurred and be
continuing.
Section 8.02. Rights and Duties of Successor Corporation. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
Section 8.03. Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease or conveyance permitted under Section 8.01 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article VIII and that all conditions
precedent herein provided for relating to such transaction have been complied
with.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities;
(b) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants are
to be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company;
(c) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such Events of
Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are expressly being included solely for
the benefit of such series); provided, however, that in respect of any such
additional Events of Default such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults), may provide for an
immediate enforcement upon such default, may limit the remedies available
to the Trustee upon such default or may limit the right of the Holders of a
majority in aggregate principal amount of that or those series of
Securities to which such additional Events of Default apply to waive such
default;
(d) to add to or change certain of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of or any premium or interest on Bearer Securities, to permit
Bearer Securities to be issued in exchange for Securities, to permit Bearer
Securities to be issued in exchange for Bearer Securities of other
authorized denominations or to permit or facilitate the issuance of
Securities in uncertificated form; provided, however, that any such action
shall not adversely affect the interests of the Holders of Securities of
any series or any related coupons in any material respect;
(e) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series created
prior to the execution of such supplemental indenture which is entitled to
the benefit of such provision;
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(f) to secure the Securities;
(g) to establish the form or terms of Securities of any series
and any related coupons as permitted by Sections 2.01 and 3.01, including
the provisions and procedures relating to Securities convertible into
Common Stock or Preferred Stock, as the case may be;
(h) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee or different Trustees;
(i) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture; provided, however, that such
provisions shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect; or
(j) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the defeasance
and discharge of any series of Securities pursuant to Sections 4.01, 14.02
and 14.03; provided, however, that any such action shall not adversely
affect the interests of the Holders of Securities of such series and any
related coupons or any other series of Securities in any material respect.
Section 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities of a series, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by or pursuant to a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture with respect
to such series or of modifying in any manner the rights of the Holders of
Securities of such series and any related coupons under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of (or
premium, if any, on) or any installment of principal of or interest on, any
Security; or reduce the principal amount thereof or the rate or amount of
interest thereon or any Additional Amounts payable in respect thereof, or
any premium payable upon the redemption thereof, or change any obligation
of the Company to pay Additional Amounts pursuant to Section 10.10 (except
as contemplated by Section 8.01(a) and permitted by Section 9.01(a)), or
reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 5.02 or the amount thereof provable in
bankruptcy pursuant to Section 5.04, or adversely affect any right of
repayment of the Holder of any Security, or change any
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Place of Payment where, or the currency or currencies, currency unit or
units or composite currency or currencies in which, the principal of any
Security or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption or repayment at
the option of the Holder, on or after the Redemption Date or the Repayment
Date, as the case may be);
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver with respect to such series (or
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture, or reduce
the requirements of Section 15.04 for quorum or voting; or
(c) modify any of the provisions of this Section 9.02, Section
5.13 or 10.11, except to increase the required percentage to effect such
action or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding
Security affected thereby.
It shall not be necessary for any Act of Holders under this Section 9.02 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
Section 9.03. Execution of Supplemental Indentures. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article IX or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities that are
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
Section 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article IX shall conform to the requirements
of the Trust Indenture Act as then in effect.
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Section 9.06. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall, if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
Section 10.01. Payment of Principal, Premium, if any, Interest and
Additional Amounts. The Company covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 3.01 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 10.10 in respect
of principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. Unless otherwise
specified with respect to Securities of any series pursuant to Section 3.01, at
the option of the Company, all payments of principal may be paid by check to the
registered Holder of the Registered Security or other person entitled thereto
against surrender of such Security.
Section 10.02. Maintenance of Office or Agency. If Securities of a
series are issuable only as Registered Securities, the Company shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain: (a) in the City of Seattle, Washington, an office or agency where any
Securities of that series may be presented or surrendered for payment or
conversion, where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment or conversion in the circumstances described in the following
paragraph (and not otherwise) and that office or agency shall be U.S. Bank Trust
National Association located at 601 Union Street, Suite 2120, Seattle,
Washington; (b) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts
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payable on Securities of that series pursuant to Section 10.10) or conversion;
provided, however, that if the Securities of that series are listed on any stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent for the Securities of that
series in any required city located outside the United States, as the case may
be, so long as the Securities of that series are listed on such exchange; and
(c) subject to any laws or regulations applicable thereto, in a Place of Payment
for that series located outside the United States an office or agency where any
Securities of that series may be surrendered for registration of transfer, where
Securities of that series may be surrendered for exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of each such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Bearer Securities of
that series pursuant to Section 10.10) or conversion at the offices specified in
the Security, in London, England, and the Company hereby appoints the same as
its agent to receive such respective presentations, surrenders, notices and
demands, and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.01, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency of
the Company in the United States, at any office of the Trustee in the United
States, or by check mailed to any address in the United States or by transfer to
an account maintained with a bank located in the United States; provided,
however, that, if the Securities of a series are payable in Dollars, payment of
principal of and any premium and interest on any Bearer Security (including any
Additional Amounts payable on Securities of such series pursuant to Section
10.10) shall be made at the office of the Company's Paying Agent in the Borough
of Manhattan, the City of New York, if (but only if) payment in Dollars of the
full amount of such principal, premium, interest or Additional Amounts, as the
case may be, at all offices or agencies outside the United States maintained for
the purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 3.01 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of Securities the office or agency of U.S. Bank Trust National Association, in
the City of Seattle, Washington, and initially appoints the Trustee at its
Corporate Trust Office as Paying
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Agent in such city and as its agent to receive all such presentations,
surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.01, if and so long as the Securities of any series (a) are denominated
in a Foreign Currency or (b) may be payable in a Foreign Currency, or so long as
it is required under any other provision of this Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
Section 10.03. Money for Securities Payments to be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to any series
of any Securities and any related coupons, it will, on or before each due date
of the principal of (and premium, if any), or interest on or Additional Amounts
in respect of, any of the Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.01 for the Securities of such series) sufficient to pay
the principal (and premium, if any) or interest or Additional Amounts so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities and any related coupons, it will, on or before each due date of the
principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section 10.03, that such
Paying Agent will:
(a) hold all sums held by it for the payment of principal of
(and premium, if any) or interest or Additional Amounts on Securities in
trust for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest on the Securities of that
series; and
(c) at any time during the continuance of any such default
upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on,
or any Additional Amounts in respect of, any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any),
interest or Additional amounts has become due and payable shall be paid to the
Company upon 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 of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as Trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, 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 10.04. Existence. Subject to Article VIII, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, all material rights (by certificate of
incorporation, bylaws and statute) and material franchises; provided, however,
that the Company shall not be required to preserve any right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company.
Section 10.05. Maintenance of Properties. The Company will cause all of its
material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that the Company and its Subsidiaries
shall not be prevented from selling or otherwise disposing of their properties
for value in the ordinary course of their business.
Section 10.06. Insurance. The Company will, and will cause each of its
Subsidiaries to, keep in force upon all of its properties and operations
policies of insurance carried with responsible companies in such amounts and
covering all such risks as shall be customary in the industry in accordance with
prevailing market conditions and availability.
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Section 10.07. Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary and (b) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being contested in good faith by appropriate proceedings, provided all
liabilities relating to such tax, assessment, charge or claim are adequately
provided for on the books of the Company in accordance with GAAP. The Company,
any Subsidiaries and any partnership in which the Company or its Subsidiaries
are a partner shall timely and accurately file all tax returns required by law
to have been filed.
Section 10.08. Provision of Financial Information. Whether or not the
Company is subject to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the Company will, within 15 days after each of the respective
dates by which the Company would have been required to file annual reports,
quarterly reports and other documents with the Commission if the Company were so
subject, (a) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders summaries of the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended, if the Company were subject
to such Sections, and (b) file with the Trustee copies of the annual reports,
quarterly reports and other documents which the Company would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, if the Company were subject to such Sections
and (c) promptly upon written request and payment of the reasonable cost of
duplication and delivery, supply copies of such documents to any prospective
Holder.
Section 10.09. Statement as to Compliance. The Company will deliver to the
Trustee, within 120 days after the end of each Fiscal Year, a brief certificate
from the principal executive officer, principal financial officer or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture and, in the event of any
noncompliance, specifying such noncompliance and the nature and status thereof.
For purposes of this Section 10.09, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
Section 10.10. Additional Amounts. If any Securities of a series provide
for the payment of Additional Amounts, the Company will pay to the Holder of any
Security of such series or any coupon appertaining thereto Additional Amounts as
may be specified as contemplated by Section 3.01. Whenever in this Indenture
there is mentioned, in any context except in the case of Section 5.02(a), the
payment of the principal of or any premium or interest on, or in respect of, any
Security of any series or payment of any related coupon or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
by the terms of such series established pursuant to Section 3.01 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to such terms and express
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mention of the payment of Additional Amounts (if applicable) in any provisions
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made.
Except as otherwise specified as contemplated by Section 3.01, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
Persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. If the Trustee or any Paying Agent, as the case may be,
shall not so receive the above-mentioned Officers' Certificate, then the Trustee
or such Paying Agent shall be entitled (a) to assume that no such withholding or
deduction is required with respect to any payment of principal or interest with
respect to any Securities of a series or related coupons until it shall have
received a certificate advising otherwise and (b) to make all payments of
principal and interest with respect to the Securities of a series or related
coupons without withholding or deductions until otherwise advised. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section 10.10 or in reliance on the
Company's not furnishing such an Officers' Certificate.
Section 10.11. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 10.04 to 10.08, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
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ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.01. Applicability of Article. Securities of any series which are
redeemable before their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by Section 3.01
for Securities of any series) in accordance with this Article XI.
Section 11.02. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Securities shall be evidenced by or pursuant to a Board
Resolution. In case of any redemption at the election of the Company of less
than all of the Securities of any series, the Company shall, at least 45 days
prior to the giving of the notice of redemption in Section 11.04 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 11.03. Selection by Trustee of Securities to be Redeemed. If less
than all the Securities of any series issued on the same day with the same terms
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series issued on such date with the same terms
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion of
the principal amount of such Security which has been or is to be redeemed.
Section 11.04. Notice of Redemption. Notice of redemption shall be given in
the manner provided in Section 1.06, not less than 30 days nor more than 60 days
prior to the Redemption Date, unless a shorter period is specified by the terms
of such series established pursuant to Section 3.01, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
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Any notice that is mailed to the Holders of Securities in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives the notice.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 11.06, if any, and Additional Amounts, if
any;
(c) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed;
(d) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without a
charge, a new Security or Securities or authorized denominations for the
principal amount thereof remaining unredeemed;
(e) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 11.06, if
any, will become due and payable upon each such Security, or the portion
thereof, to be redeemed and, if applicable, that interest thereon shall
cease to accrue on and after said date;
(f) the Place or Places of Payment where such Securities, together
in the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price and accrued interest, if any, or for conversion;
(g) that the redemption is for a sinking fund, if such is the case;
(h) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing coupon or coupons will be
deducted from the Redemption Price, unless security or indemnity
satisfactory to the Company, the Trustee for such series and any Paying
Agent is furnished;
(i) if Bearer Securities of any series are to be redeemed and any
Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Securities not subject to redemption on
this Redemption Date pursuant to Section 3.05 or otherwise, the last date,
as determined by the Company, on which such exchanges may be made;
(j) the CUSIP number of such Security, if any; and
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(k) if applicable, that a Holder of Securities who desires to
convert Securities for redemption must satisfy the requirements for
conversion contained in such Securities, the then-existing conversion price
or rate, the place or places where such Securities may be surrendered for
conversion, and the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 11.05. Deposit of Redemption Price. On or before any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, which it may not do in the case
of a sinking fund payment under Article XII, segregate and hold in trust as
provided in Section 10.03) an amount of money in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 3.01 for the Securities of such series) sufficient to pay on the
Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall be paid to the Company upon Company
Request or, if then held by the Company, shall be discharged from such trust.
Section 11.06. Securities Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 3.01 for the Securities of
such series) (together with accrued interest, if any, to the Redemption Date),
and from and after such date (unless the Company shall default in the payment of
the Redemption Price and accrued interest) such Securities shall, if the same
were interest-bearing, cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; provided, however, that installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Redemption Date
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 10.02) and, unless otherwise specified
as contemplated by Section 3.01, only upon presentation and surrender of coupons
for such interest; and provided further that, except as otherwise provided with
respect to Securities convertible into Common Stock or Preferred Stock,
installments of interest on Securities whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Securities, or one
or more
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Predecessor Securities, registered as such at the close of business on
the relevant record dates according to their terms and the provisions of Section
3.07.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in respect
of which a deduction shall have been made from the Redemption Price, such Holder
shall be entitled to receive the amount so deducted; provided, however, that
interest represented by coupons shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section
10.02) and, unless otherwise specified as contemplated by Section 3.01, only
upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Security.
Section 11.07. Securities Redeemed in Part. Any Registered Security which
is to be redeemed only in part (pursuant to the provisions of this Article XI or
of Article XII) shall be surrendered at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his or her attorney duly authorized in
writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge a new Security or
Securities of the same series of any authorized denomination as requested by
such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered. If a Global
Security is so surrendered, the Company shall execute and the Trustee shall
authenticate and deliver to the depositary, without service charge, a new Global
Security in a denomination equal to and in exchange for the unredeemed portion
of the principal of the Global Security so surrendered.
ARTICLE XII
SINKING FUNDS
Section 12.01. Applicability of Article. The provisions of this Article XII
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 3.01 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of
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any Securities of any series, the cash amount of any mandatory sinking fund
payment may be subject to reduction as provided in Section 12.02. Each sinking
fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
Section 12.02. Satisfaction of Sinking Fund Payments with Securities. The
Company may, in satisfaction of all or any part of any mandatory sinking fund
payment with respect to the Securities of a series, (a) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together, in the case of any Bearer Securities of such series, with all
unmatured coupons appertaining thereto and (b) apply as a credit Securities of
such series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, as
provided for by the terms of such Securities, or which have otherwise been
acquired by the Company; provided, however, that such Securities so delivered or
applied as a credit have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the applicable
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.
Section 12.03. Redemption of Securities for Sinking Fund. Not less than 60
days prior to each sinking fund payment date for Securities of any series, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 3.01 for the
Securities of such series) and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 12.02, and the optional amount, if any, to be added in cash to the next
ensuing mandatory sinking fund payment, and will also deliver to the Trustee any
Securities to be so delivered and credited. If such Officers' Certificate shall
specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Company shall thereupon be obligated to pay the amount
therein specified. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.03 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.04. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.06 and 11.07.
ARTICLE XIII
REPAYMENT AT THE OPTION OF HOLDERS
Section 13.01. Applicability of Article. Repayment of Securities of any
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
3.01) in accordance with this Article XIII.
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Section 13.02. Repayment of Securities. Securities of any series subject to
repayment in whole or in part at the option of the Holders thereof will, unless
otherwise provided in the terms of such Securities, be repaid at a price equal
to the principal amount thereof, together with interest, if any, thereon accrued
to the Repayment Date specified in or pursuant to the terms of such Securities.
The Company covenants that on or prior to the Repayment Date it will deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.03) an
amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 3.01 for the
Securities of such series) sufficient to pay the principal (or, if so provided
by the terms of the Securities of any series, a percentage of the principal) of,
and (except if the Repayment Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof, as the case may be, to be
repaid on such date.
Section 13.03. Exercise of Option. Securities of any series subject to
repayment at the option of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. In order for any Security to
be repaid at the option of the Holder, the Trustee must receive at the Place of
Payment therefor specified in the terms of such Security (or at such other place
or places of which the Company shall from time to time notify the Holders of
such Securities) not earlier than 60 days nor later than 30 days prior to the
Repayment Date (a) the Security so providing for such repayment together with
the "Option to Elect Repayment" form on the reverse thereof duly completed by
the Holder (or by the Holder's attorney duly authorized in writing) or (b) a
telegram, telex, facsimile transmission or letter from a member of a national
securities exchange, or the National Association of Securities Dealers, Inc., or
a commercial bank or trust company in the United States setting forth the name
of the Holder of the Security, the principal amount of the Security, the
principal amount of the Security to be repaid, the CUSIP number, if any, or a
description of the tenor and terms of the Security, a statement that the option
to elect repayment is being exercised thereby and a guarantee that the Security
to be repaid, together with the duly completed form entitled "Option to Elect
Repayment" on the reverse of the Security, will be received by the Trustee not
later than the fifth Business Day after the date of such telegram, telex,
facsimile transmission or letter; provided, however, that such telegram, telex,
facsimile transmission or letter shall only be effective if such Security and
form duly completed are received by the Trustee by such fifth Business Day. If
less than the entire principal amount of such Security is to be repaid in
accordance with the terms of such Security, the principal amount of such
Security to be repaid, in increments of the minimum denomination for Securities
of such series, and the denomination or denominations of the Security or
Securities to be issued to the Holder for the portion of the principal amount of
such Security surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the option of the
Holder thereof may not be repaid in part if, following such repayment, the
unpaid principal amount of such Security would be less than the minimum
authorized denomination of Securities of the series of which such Security to be
repaid is a part. Except as otherwise may be provided by the terms of any
Security providing for repayment at the option of the Holder thereof, exercise
or the repayment option by the Holder shall be irrevocable unless waived by the
Company.
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Section 13.04. When Securities Presented for Repayment Become Due and
Payable. If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article XIII
and as provided by or pursuant to the terms of such Securities, such Securities
or the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 10.02) and, unless
otherwise specified pursuant to Section 3.01, only upon presentation and
surrender of such coupons; and provided further that, in the case of Securities,
installments of interest, if any, whose Stated Maturity is on or prior to the
Repayment Date shall be payable (but without interest thereon, unless the
Company shall default in the payment thereof) to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant record dates according to their terms and the
provisions of Section 3.07.
If any Bearer Security surrendered for repayment shall not be accompanied
by all appurtenant coupons maturing after the Repayment Date, such Security may
be paid after deducting from the amount payable therefor as provided in Section
13.02 an amount equal to the face amount of all such missing coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to the Trustee or any Paying Agent any
such missing coupon in respect of which a deduction shall have been made as
provided in the preceding sentence, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest represented by coupons
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 10.02) and, unless otherwise specified
as contemplated by Section 3.01, only upon presentation and surrender of those
coupons.
If the principal amount of any Security surrendered for repayment shall not
be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
Section 13.05. Securities Repaid in Part. Upon surrender of any Registered
Security which is to be repaid in part only, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge and at the expense of the Company, a new Registered Security or
Securities of the same series, of any authorized
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denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE
Section 14.01. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance. If, pursuant to Section 3.01, provision is
made for either or both of (a) defeasance of the Securities of or within a
series under Section 14.02 or (b) covenant defeasance of the Securities of or
within a series under Section 14.03, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
XIV (with such modifications thereto as may be specified pursuant to Section
3.01 with respect to any Securities), shall be applicable to such Securities and
any coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 14.02 (if applicable) or Section
14.03 (if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article XIV.
Section 14.02. Defeasance and Discharge. Upon the Company's exercise of the
above option applicable to this Section 14.02 with respect to any Securities of
or within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 14.04 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 14.05 and the other Sections of this Indenture
referred to in clauses (a) and (b) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of such Outstanding Securities and any coupons appertaining thereto to
receive, solely from the trust fund described in Section 14.04 and as more fully
set forth in such Section, payments in respect of the principal of (and premium,
if any) and interest, if any, on such Securities and any coupons appertaining
thereto when such payments are due, (b) the Company's obligations with respect
to such Securities under Sections 3.05, 3.06, 10.02 and 10.03 and with respect
to the payment of Additional Amounts, if any, on such Securities as contemplated
by Section 10.10, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (d) this Article XIV. Subject to compliance with this
Article XIV the Company may exercise its option under this Section 14.02
notwithstanding the prior exercise of its option under Section 14.03 with
respect to such Securities and any coupons appertaining thereto.
Section 14.03. Covenant Defeasance. Upon the Company's exercise of the
above option applicable to this Section with respect to any Securities of or
within a series, the Company
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shall be released from its obligations under Sections 10.04 to 10.08, inclusive,
and, if specified pursuant to Section 3.01, its obligations under any other
covenant, with respect to such Outstanding Securities and any coupons
appertaining thereto on and after the date the conditions set forth in Section
14.04 are satisfied (hereinafter, "covenant defeasance"), and such Securities
and any coupons appertaining thereto shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with
Sections 10.04 to 10.08, inclusive, or such other covenant, but shall continue
to be deemed "Outstanding" for all other purposes hereunder. For this purpose,
such covenant defeasance means that, with respect to such Outstanding Securities
and any coupons appertaining thereto, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such Section or such other covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
such other covenant or by reason of reference in any such Section or such other
covenant to any other provision herein or in any other document, and such
omission to comply shall not constitute a default or an Event of Default under
Section 5.01(d) or 5.01(h) or otherwise, as the case may be, but, except as
specified above, the remainder of this Indenture and such Securities and any
coupons appertaining thereto shall be unaffected thereby.
Section 14.04. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 14.02 or Section
14.03 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another Trustee satisfying the requirements
of Section 6.07 who shall agree to comply with the provisions of this
Article XIV applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities and any
coupons appertaining thereto, (i) an amount in such currency, currencies or
currency unit in which such Securities and any coupons appertaining thereto
are then specified as payable at Stated Maturity, or (ii) Government
Obligations applicable to such Securities and coupons appertaining thereto
(determined on the basis of the currency, currencies or currency unit in
which such Securities and coupons appertaining thereto are then specified
as payable at Stated Maturity) which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment of
principal of (and premium, if any) and interest, if any, on such Securities
and any coupons appertaining thereto or (iii) a combination thereof, in any
case, in an amount sufficient, without consideration of any reinvestment of
such principal and interest, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or other qualifying Trustee) to pay and discharge,
(A) the principal of (and premium, if any) and interest, if any, on such
Outstanding Securities and any coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest and (B)
any mandatory sinking fund payments or analogous payments applicable to
such Outstanding Securities and any coupons appertaining thereto on the day
on which such
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payments are due and payable in accordance with the terms of
this Indenture and of such Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which it is bound.
(c) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing
on the date of such deposit or, insofar as Sections 5.01(f) and 5.01(g) are
concerned, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(d) In the case of an election under Section 14.02, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (ii) since the date of execution of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of such Outstanding Securities and any
coupons appertaining thereto will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred.
(e) In the case of an election under Section 14.03, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Outstanding Securities and any coupons
appertaining thereto will not recognize income, gain or loss for federal
income tax purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such covenant defeasance
had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 14.02 or the covenant defeasance
under Section 14.03 (as the case may be) have been complied with and an
Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to clause (a) above and the related exercise of the Company's
option under Section 14.02 or 14.03 (as the case may be), registration is
not required under the Investment Company Act of 1940, as amended, by the
Company, with respect to the trust funds representing such deposit or by
the Trustee for such trust funds or (ii) all necessary registrations under
said act have been effected.
(g) Notwithstanding any other provisions of this Section 14.04,
such defeasance or covenant defeasance shall be effected in compliance with
any additional or substitute terms, conditions or limitations which may be
imposed on the Company in connection therewith pursuant to Section 3.01.
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Section 14.05. Deposited Money and Government Obligations to be Held in
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.03, all money and Government Obligations (or other
property as may be provided pursuant to Section 3.01) (including the proceeds
thereof) deposited with the Trustee (or other qualifying Trustee, collectively
for purposes of this Section 14.05, the "Trustee") pursuant to Section 14.04 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to Section
3.01, if, after a deposit referred to in Section 14.04(a) has been made, (a) the
Holder of a Security in respect of which such deposit was made is entitled to,
and does, elect pursuant to Section 3.01 or the terms of such Security to
receive payment in a currency or currency unit other than that in which the
deposit pursuant to Section 14.04(a) has been made in respect of such Security
or (b) a Conversion Event occurs in respect of the currency or currency unit in
which the deposit pursuant to Section 14.04(a) has been made, the indebtedness
represented by such Security and any coupons appertaining thereto shall be
deemed to have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium, if any), and interest, if any, on such
Security as the same becomes due out of the proceeds yielded by converting (from
time to time as specified below in the case of any such election) the amount or
other property deposited in respect of such Security into the currency or
currency unit in which such Security becomes payable as a result of such
election or Conversion Event based on the applicable market exchange rate for
such currency or currency unit in effect on the second Business Day prior to
each payment date, except, with respect to a Conversion Event, for such currency
or currency unit in effect (as nearly as feasible) at the time of the Conversion
Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 14.04 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article XIV to the contrary notwithstanding, subject to
Section 6.06, the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or Government Obligations (or other property and
any proceeds therefrom) held by it as provided in Section 14.04 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article XIV.
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ARTICLE XV
MEETINGS OF HOLDERS OF SECURITIES
Section 15.01. Purposes for Which Meetings May be Called. A meeting of
Holders of Securities of any series may be called at any time and from time to
time pursuant to this Article XV to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
Section 15.02. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 15.01, to be
held at such time and at such place as the Trustee shall determine. Notice
of every meeting of Holders of Securities of any 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 given, in the manner provided in
Section 1.06, not less than 20 nor more than 180 days prior to the date
fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to
call a meeting of the Holders of Securities of such series for any purpose
specified in Section 15.01, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee
shall not have made the first publication of the notice of such meeting
within 20 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place for
such meeting and may call such meeting for such purposes by giving notice
thereof as provided in clause (a) of this Section 15.02.
Section 15.03. Persons Entitled to Vote At Meetings. To be entitled to
vote at any meeting of Holders of Securities of any series, a Person shall be
(a) a Holder of one or more Outstanding Securities of such series or (b) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such Holder or Holders. The
only Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
Section 15.04. Quorum; Action. The Persons entitled to vote a majority in
principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series; provided, however,
that if any action is to be taken at such meeting with respect to a consent or
waiver which this Indenture expressly provides may be given by the Holders of
not less than a specified percentage in principal amount of the
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Outstanding Securities of a series, the Persons entitled to vote such specified
percentage in principal amount of the Outstanding Securities of such series
shall constitute a quorum. In the absence of a quorum within 30 minutes after
the time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other case
the meeting may be adjourned for a period of not less than 10 days as determined
by the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at the reconvening of any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10
days; at the reconvening of any meeting adjourned or further adjourned for lack
of a quorum, the persons entitled to vote 25% in aggregate principal amount of
the then Outstanding Securities shall constitute a quorum for the taking of any
action set forth in the notice of the original meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
15.02(b), except that such notice need be given only once not less than five
days prior to the date on which the meeting is scheduled to be reconvened.
Except as limited by the proviso to Section 9.02, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the Holders of a majority
in principal amount of the Outstanding Securities of that series; provided,
however, that, except as limited by the proviso to Section 9.02, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section 15.04 shall
be binding on all the Holders of Securities of such series and the related
coupons, whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 15.04, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(a) there shall be no minimum quorum requirement for such meeting;
and
(b) the principal amount of the Outstanding Securities of such
series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into
account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or
taken under this Indenture.
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Section 15.05. Determination of Voting Rights, Conduct and Adjournment of
Meetings.
(a) Notwithstanding any provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities of a series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and
in regard to the appointment and duties of inspector of elections, 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 deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved
in the manner specified in Section 1.04 and the appointment of any proxy
shall be proved in the manner specified in Section 1.04 or by having the
signature of the Person executing the proxy witnessed or guaranteed by any
trust company, bank or banker authorized by Section 1.04 to certify to the
holding of Bearer Securities. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 1.04 or other
proof.
(b) 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 Holders of Securities as provided in Section
15.02(b), in which case the Company or the Holders of Securities of the
series calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons entitled
to vote a majority in principal amount of the Outstanding Securities of
such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series 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, except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 15.02 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series represented
at the meeting, and the meeting may be held as so adjourned without further
notice.
Section 15.06. Counting Votes and Recording Action of Meetings. The vote
upon any resolution submitted to any meeting of Holders of Securities of any
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 and serial numbers of the Outstanding 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
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verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Securities of any series 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 fact, setting forth a copy of the notice of the meeting
and showing that said notice was given as provided in Section 15.02 and, if
applicable, Section 15.04. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
METROPOLITAN MORTGAGE &
SECURITIES CO., INC.
By /s/ C. Paul Sandifur, Jr.
-------------------------------
Name C. Paul Sandifur, Jr.
-----------------------------
Title President
----------------------------
[SEAL]
Attest:
By /s/ Reuel Sawnson
-------------------------------
Name Reuel Sawnson
-----------------------------
Title Secretary
----------------------------
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
By /s/ Sherrie L. Pantle
-------------------------------
Name Sherrie L. Pantle
-----------------------------
Title Vice President
----------------------------
[SEAL]
Attest:
By /s/ Carolyn Whalen
-------------------------------
Name Carolyn Whalen
-----------------------------
Title Assistant Vice President
----------------------------
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STATE OF WASHINGTON )
) ss.
COUNTY OF ________ )
On this 6 day of October 1999, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared C. Paul Sandifur, Jr. and Reuel Swanson to me known to be the persons
who signed as president, and secretary, respectively, of METROPOLITAN MORTGAGE &
SECURITIES CO., INC., the corporation that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation for the uses and purposes therein mentioned and on
oath stated that they were duly elected, qualified and acting as said officers
of the corporation, that they were authorized to execute said instrument and
that the seal affixed if any, is the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto see my hand and official seal the day
and year first above written.
/s/ Susan Thomson
--------------------------------------
(Signature of Notary)
Susan Thomson
--------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State of
Washington, residing at _____________.
My Appointment Expires: _____________.
77
<PAGE>
STATE OF WASHINGTON )
) ss.
COUNTY OF King )
On this 6 day of October 1999, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared Sherri C. Pantle and Carolyn Whalen, to me known to be the persons who
signed as Vice President and Assistant Vice President, respectively, of U.S.
Bank Trust National Association, the national banking association that executed
the within and foregoing instrument and acknowledged said instrument to be the
free and voluntary act and deed of said national banking association for the
uses and purposes therein mentioned, and on oath stated that they were duly
elected, qualified and acting as said officers of the national banking
association, that they were authorized to execute said instrument and that the
seal affixed if any, is the seal of said national banking association.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
/s/ Glendy Yuen
--------------------------------------
(Signature of Notary)
Glendy Yuen
--------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State of
Washington, residing at Renton.
My Appointment Expires: 2/28/2003.
78
<PAGE>
EXHIBIT A
FORM OF REDEEMABLE OR NONREDEEMABLE SECURITY
[FACE OF SECURITY]
[If the Holder of this Security (as indicated below it) is The Depository
Trust Company ("DTC") or a nominee of DTC, this Security is a Global Security
and the following two legends apply:
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
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, SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER
NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE
OF SUCH SUCCESSOR.]
[IF THIS SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- FOR
PURPOSES OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS ____% OF ITS PRINCIPAL
AMOUNT, THE ISSUE DATE IS __________, 19__ [AND] THE YIELD TO MATURITY IS ____%.
[THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE
TO THE SHORT ACCRUAL PERIOD OF __________, 19__ TO __________, 19__, IS ____% OF
THE PRINCIPAL AMOUNT OF THIS SECURITY.]
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
[DESIGNATION OF SERIES]
No. __________ $__________
METROPOLITAN MORTGAGE & SECURITIES CO., INC., a Washington corporation
(herein referred to as the "Company," which term includes any successor under
the Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to ____________________ or registered assigns the principal sum
of __________ Dollars on ____________________ (the "Stated Maturity Date") [OR
INSERT DATE FIXED FOR
<PAGE>
EARLIER REDEMPTION (the "Redemption Date)" and, together with the Stated
Maturity Date with respect to principal repayable on such date, the "Maturity
Date")].
[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT--and to pay
interest thereon from ________ or from the most recent interest payment date to
which interest has been paid or duly provided for, semi-annually in arrears on
and __________ of each year (each, an "Interest Payment Date"), commencing
, at the rate of ____% per annum, until the entire principal amount hereof is
paid or duly provided for. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Holder in whose name this Security (or one or more predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the ______ or ______ (whether or not a
Business Day, as defined below), as the case may be, next preceding such
Interest Payment Date [at the office or agency of the Company maintained for
such purpose; provided, however, that such interest may be paid, at the
Company's option, by mailing a check to such Holder at his registered address or
by transfer of funds to an account maintained by such Holder within the United
States]. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and may
be paid to the Holder in whose name this Security (or one or more predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not more than 15
days and not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.]
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at the
[Stated] Maturity Date and in such case the overdue principal of this Security
shall bear interest at the rate of ___ % per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of ____% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.]
The principal of this Security payable on the [Stated] Maturity Date [or
the principal of, premium, if any, and, if the Redemption Date is not an
Interest Payment Date, interest on this Security payable on the Redemption Date]
will be paid against presentation of this Security at the office or agency of
the Company maintained for that purpose in __________, in such coin or
A-2
<PAGE>
currency of the United States as at the time of payment is legal tender for the
payment of public and private debts.
Interest payable on this Security on any Interest Payment Date and on the
[Stated] Maturity Date [or Redemption Date, as the case may be,] will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including ________, if no interest has been paid on this Security) to but
excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date, as the case may be]. If any Interest Payment Date or the
[Stated] Maturity Date [or Redemption Date] falls on a day that is not a
Business Day, principal, premium, if any, and/or interest payable with respect
to such Interest Payment Date or [Stated] Maturity Date [or Redemption Date, as
the case may be,] will be paid on the next succeeding Business Day with the same
force and effect as if it were paid on the date such payment was due, and no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date or [Stated] Maturity Date [or Redemption Date, as the
case may be]. "Business Day" means any day, other than a Saturday or Sunday, on
which banks in New York are not required or authorized by law or executive order
to close.
[IF THIS SECURITY IS A GLOBAL SECURITY, INSERT--All payments of principal,
premium, if any, and interest in respect of this Security will be made by the
Company in immediately available funds.]
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature of one of its authorized signatories, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its [facsimile] corporate seal.
Dated METROPOLITAN MORTGAGE &
---------------- SECURITIES CO., INC.
Attest:
By
---------------------------------
- ----------------------
Secretary
A-3
<PAGE>
[Reverse of Security]
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
This Security is one of a duly authorized issue of securities of the
Company, issued and to be issued in one or more series under an Indenture, dated
as of __________, 199__ (herein called the "Indenture") between the Company and
____________________, as Trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture with respect to the series of
which this Security is a part), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the duly authorized series of Securities designated on the face hereof
(collectively, the "Securities"), [IF APPLICABLE, INSERT--and the aggregate
principal amount of the securities to be issued under such series is limited to
$__________ (except for Securities authenticated and delivered upon transfer of,
or in exchange for, or in lieu of other Securities).] All terms used in this
Security which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
If an Event of Default shall occur and be continuing, the principal of
the Securities of this series may be declared due and payable in the manner and
with the effect provided in the Indenture.
[IF APPLICABLE, INSERT--The Securities may not be redeemed prior to the
[Stated] Maturity Date.]
[IF APPLICABLE, INSERT--The Securities are subject to redemption [(a)
[IF APPLICABLE, INSERT--on in any year commencing with the year ______ and
ending with the year __________ through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount and (b) ] [IF
APPLICABLE, INSERT--at any time [on or after ____________], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed on or before
__________, ___% and if redeemed during the 12-month period beginning
_____________ of the years indicated, at the Redemption Prices indicated below.
Year Redemption Price Year Redemption Price
and thereafter at a Redemption Price equal to ___% of the principal amount,
together, in the case of any such redemption [IF APPLICABLE, INSERT--(whether
through operation of the sinking fund or otherwise)], with accrued interest to
the Redemption Date; provided, however, that installments of interest on this
Security whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture.]
A-4
<PAGE>
[IF APPLICABLE, INSERT--The Securities are subject to redemption (a) on
__________ in any year commencing with the year ____ and ending with the year
________________ at the Redemption Prices for redemption through operation of
the sinking fund (expressed as percentages of the principal amount) set forth in
the table below and (b) at any time [on or after __________], as a whole or in
part, at the election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below: If redeemed during the
12-month period beginning ______ of the years indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise Than
Operation of the Through Operation of
Year Sinking Fund the Sinking Fund
and thereafter at a Redemption Price equal to __% of the principal amount,
together, in the case of any such redemption (whether through operation of the
sinking fund or otherwise), with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Security whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this Security, or one or more predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[IF APPLICABLE, INSERT--Notwithstanding the foregoing, the Company may not,
prior to __________ redeem any Securities as contemplated by [clause (2) of] the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of money borrowed having an interest
cost to the Company (calculated in accordance with generally accepted financial
practice) of less than ____% per annum.]
[IF APPLICABLE, INSERT--The sinking fund for the Securities provides
for the redemption on __________ in each year, beginning with the year ____ and
ending with the year ____, of [not less than] $__] [("mandatory sinking fund")
and not more than $__________] aggregate principal amount of the Securities.
[The Securities acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made in the [DESCRIBE ORDER]
order in which they become due.]]
Notice of redemption will be given by mail to Holders of Securities,
not less than 30 nor more than 60 days prior to the Redemption Date, all as
provided in the Indenture.
In the event of redemption of the Security in part only, a new Security
or Securities for the unredeemed portion hereof shall be issued in the name of
the Holder hereof upon the cancellation hereof.
[IF APPLICABLE, INSERT CONVERSION PROVISIONS SET FORTH IN ANY BOARD
RESOLUTION OR INDENTURE SUPPLEMENTAL TO THE INDENTURE.]
A-5
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority of the aggregate principal amount of all Securities issued
under the Indenture at the time Outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of not less than a majority of
the aggregate principal amount of the Outstanding Securities, on behalf of the
Holders of all such Securities, to waive compliance by the Company with certain
provisions of the Indenture. Furthermore, provisions in the Indenture permit
the Holders of not less than a majority of the aggregate principal amount, in
certain instances, of the Outstanding Securities of any series to waive, on
behalf of all of the Holders of Securities of such series, certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, places and rates, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
[and herein] set forth, the transfer of this Security is registrable in the
Security Register of the Company upon surrender of this security for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this Security are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or by his attorney duly authorized in writing, and thereupon
one or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations therein
[and herein] set forth, this Security is exchangeable for a like aggregate
principal amount of Securities of different authorized denominations but
otherwise having the same terms and conditions, as requested by the Holder
hereof surrendering the same.
The Securities of this series are issuable only in registered form [without
coupons] in denominations of $__________ and any integral multiple thereof. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
A-6
<PAGE>
No recourse shall be had for the payment of the principal of or premium, if
any, or the interest on this Security, or for any claim based thereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any past, present or future stockholder,
employee, officer or director, as such, of the Company or of any successor,
either directly or through the Company or any successor, whether by virtue of
any constitution, statute or rule of law or by the enforcement of any assessment
or penalty or otherwise, all such liability being, by the acceptance hereof and
as part of the consideration for the issue hereof, expressly waived and
released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of ______________ applicable to agreements
made and to be performed entirely in such State.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[NAME OF TRUSTEE], as Trustee
By
-----------------------------------
Authorized Signatory
A-7
<PAGE>
EXHIBIT B-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account are owned by
(a) person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States Person(s)"), (b) United States Person(s) that are (i) foreign
branches of United States financial institutions (financial institutions, as
defined in United States Treasury Regulations Section 1.165-12(c)(1)(v), are
herein referred to as "financial institutions") purchasing for their own account
or for resale or (ii) United States Person(s) who acquired the Securities
through foreign branches of United States financial institutions and who hold
the Securities through such United States financial institutions on the date
hereof (and in either case (i) or (ii), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise Metropolitan Mortgage & Securities Co., Inc. or its agent that such
financial institution will comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the United States Internal Revenue Code of 1986, as amended, and
the regulations thereunder) or (c) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign financial
institution described in clause (c) above (whether or not also described in
clause (a) or (b)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States Person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the above-captioned
Securities held by you for our account in accordance with your Operating
Procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [US$__________] of such
interest in the above-captioned Securities in respect of which we are not able
to certify and as to which we understand an exchange for an interest in a
permanent Global Security or an exchange for and
<PAGE>
delivery of definitive Securities (or, if relevant, collection of any interest)
cannot be made until we do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: __________, ____
[To be dated no earlier than the 15th day prior to
(a) the Exchange Date or (b) the relevant interest
Payment Date occurring prior to the Exchange
Date, as applicable]
[Name of Person Making Certification]
By
---------------------------------------
Authorized Signatory
B-1-2
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [US$] principal amount of
the above-captioned Securities is owned by (a) person(s) that are not citizens
or residents of the United States, domestic partnerships, domestic corporations
or any estate or trust the income of which is subject to United States federal
income taxation regardless of its source ("United States Person(s)"), (b) United
States Person(s) that are (i) foreign branches of United States financial
institutions (financial institutions, as defined in United States Treasury
Regulations Section 1.16512(c)(1)(v), are herein referred to as "financial
institutions") purchasing for their own account or for resale or (ii) United
States Person(s) who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United
States financial institutions on the date hereof (and in either case (i) or
(ii), each such financial institution has agreed, on its own behalf or through
its agent, that we may advise Metropolitan Mortgage & Securities Co., Inc. or
its agent that such financial institution will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder) or (c) United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, to the further effect, that financial institutions described in clause (c)
(whether or not also described in clause (a) or (b)) have certified that they
have not acquired the Securities for purposes of resale directly or indirectly
to a United States Person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (a) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary Global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Other Organizations and (b) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
<PAGE>
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: __________, ____
[To be dated no earlier than the Exchange Date
or the relevant Interest Payment Date occurring
prior to the Exchange Date, as applicable]
[MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
BRUSSELS OFFICE,] as Operator of the Euroclear
System [CEDEL S.A.]
By
--------------------------------------------
Name
------------------------------------------
Title
-----------------------------------------
B-2-2
<PAGE>
EXHIBIT 5.1
<TABLE>
<S> <C> <C>
KUTAK ROCK ATLANTA
SUITE 2900 KANSAS CITY
717 SEVENTEENTH STREET LITTLE ROCK
NEW YORK
DENVER, COLORADO 80202-3329 NEWPORT BEACH
OKLAHOMA CITY
303-297-2400 OMAHA
FACSIMILE 303-292-7799 PHOENIX
PITTSBURGH
http://www.kutakrock.com WASHINGTON
October 7, 1999
</TABLE>
Metropolitan Mortgage & Securities Co., Inc.
601 West 1st Avenue
Spokane, Washington 99201
Ladies and Gentlemen:
We have acted as counsel to Metropolitan Mortgage & Securities Co., Inc.
(the "Company") in connection with the filing of a registration statement on
Form S-2, including a related Prospectus, under the Securities Act of 1933, as
amended (the "Act"), to which this opinion is attached as an exhibit. The
registration statement covers a proposed offering by the Company of up to
$25,000,000 in principal amount of its 9% Notes due 2004 (the "Notes"). Such
registration statement, as amended, and the Prospectus on file with the
Securities and Exchange Commission (the "Commission") at the time such
registration statement becomes effective (including financial statements and
schedules, exhibits and all other documents filed as a part thereof or
incorporated therein) are herein called, respectively, the "Registration
Statement" and the "Prospectus."
In connection with this opinion, we have made such investigations and
examined such records, including the Company's Certificate of Incorporation,
Bylaws and other corporate documents as we deemed necessary to the performance
of our services and to render this opinion. We have also examined and are
familiar with the originals or copies, certified or otherwise identified to our
satisfaction, of such other documents, corporate records and other instruments
as we have deemed necessary for the preparation of this opinion. In expressing
this opinion, we have relied, as to any questions of fact upon which our opinion
is predicated, upon representations and certificates of the officers of the
Company.
In giving this opinion we assumed:
(a) the genuineness of all signatures and the authenticity and
completeness of all documents submitted to us as originals;
(b) the conformity to originals and the authenticity of all documents
supplied to us as certified, photocopied, conformed or facsimile copies and
the authenticity and completeness of the originals of any such documents;
and
(c) the proper, genuine and due execution and delivery of all
documents by all parties to them and that there has been no breach of the
terms thereof.
<PAGE>
KUTAK ROCK
Metropolitan Mortgage & Securities Co., Inc.
October 7, 1999
Page 2
Based upon the foregoing and subject to the qualifications set forth above,
and assuming (i) that the Registration Statement has become effective under the
Act, (ii) that all required actions are taken and conditions satisfied with
respect to the issuance of the Company's Notes as specified in the Prospectus
and (iii) consideration is received for the Notes: we are of the opinion that
when sold, the Notes will be legally issued, fully paid and binding obligations
of the Company.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and the use of our name in the Registration Statement. In giving such
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Act or the Rules and
Regulations of the Commission promulgated pursuant thereto.
Very truly yours,
/s/ Kutak Rock
Kutak Rock
<PAGE>
<TABLE>
<CAPTION>
Exhibit 11.01
METROPOLITAN MORTGAGE & SECURITIES CO., INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Nine Months Ended
June 30 Year Ended September 30
------------------- -----------------------------------------------------
(Dollars in Thousands)
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- --------- -------- -------- --------
Earnings:
Net income $ 16,086 $10,660 $10,327 $ 9,668 $ 8,038 $ 6,303 $ 5,478
Preferred dividends (2,639) (2,849) (3,732) (4,113) (3,868) (4,038) (3,423)
-------- -------- -------- --------- -------- -------- --------
Net income available to common
stockholders $ 13,447 $ 7,811 $ 6,595 $ 5,555 $ 4,170 $ 2,265 $ 2,055
======== ======== ======== ========= ======== ======== ========
Weighted average number of common
shares outstanding (1) 130 130 130 130 130 131 137
======== ======== ======== ========= ======== ======== ========
Net income per common share $103,436 $60,085 $50,728 $42,733 $32,073 $17,288 $14,996
(1) All information retroactively reflects the reverse common stock split of 2,250:1 which occurred during the fiscal year ended
September 30, 1994.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit 12.01
METROPOLITAN MORTGAGE & SECURITIES CO., INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The ration of adjusted earnings to fixed charges and preferred stock dividends
was computed using the following tabulations to compute adjusted earnings and
the defined fixed charges and preferred stock dividends.
Nine Months Ended Year Ended September 30
June 30 (Dollars in Thousands)
------------------- ------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income $ 16,086 $ 10,660 $ 10,327 $ 9,668 $ 8,038 $ 6,303 $ 5,478
Add:
Interest 16,088 14,189 19,633 19,375 18,788 16,381 19,895
Taxes on income (12,697) 5,588 5,475 5,073 4,235 3,108 4,422
-------- -------- -------- -------- -------- -------- --------
Adjusted earnings $ 19,477 $ 30,437 $ 35,465 $ 34,116 $ 31,061 $ 25,792 $ 28,365
======== ======== ======== ======== ======== ======== ========
Preferred stock dividend requirements $ 2,639 $ 2,849 $ 3,732 $ 4,113 $ 3,868 $ 4,038 $ 3,423
Ration factor of income after
provision for income taxes to income
before provision for income taxes 100% 66% 66% 66% 66% 67% 66%
Preferred stock dividend factor on
pretax basis 2,639 4,328 5,687 6,244 5,880 6,006 5,220
Fixed charges
Interest 16,088 14,189 19,663 19,375 18,788 16,381 19,895
Capitalized interest 663 429 611 521 2,468 2,730 2,152
-------- -------- -------- -------- -------- -------- --------
Fixed charges and preferred stock
dividends $ 19,390 $ 18,946 $ 25,961 $ 26,140 $ 27,136 $ 25,117 $ 27,267
======== ======== ======== ======== ======== ======== ========
Ratio of adjusted earnings to fixed
charges and preferred stock dividends 1.00 1.61 1.37 1.31 1.14 1.08 1.04
======== ======== ======== ======== ======== ======== ========
</TABLE>
02-51699.01
<PAGE>
Exhibit 23.01
CONSENT OF INDEPENDENT ACCOUNTANT
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-2 of our report dated November 20, 1998 relating to the
financial statements, which appears in the Annual Report to Shareholders of
Metropolitan Mortgage & Securities Co., Inc. for the year ended September 30,
1998 and our report dated November 20, 1998 relating to the financial statement
schedules, which appears in Metropolitan Mortgage & Securities Co., Inc.'s
Annual Report on Form 10-K for the year ended September 30, 1998. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
Spokane, Washington
October 7, 1999
<PAGE>
EXHIBIT 25.01
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in Its Charter)
91-7587893
(I.R.S. Employer Identification No.)
601 Union Street, Suite 2120
Seattle, WA 98101
(Address of Principal Executive Offices) (Zip Code)
Metropolitan Mortgage & Securities Co., Inc.
(Exact Name of Obligor as Specified in Its Charter)
Washington 91-0609840
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) No.)
601 West 1st Avenue
Spokane, Washington
(509) 838-3111
(Address and telephone number of
principal executive offices)
99201
(Zip code)
9% Notes due 2004
(Title of the Indenture Securities)
<PAGE>
1. General Information. Furnish the following information as to the trustee--
-------------------
(a) Name and address of each examining or supervising authority to which it
is subject.
Comptroller of the Currency, Washington D.C. 20521
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor and Underwriters. If the obligor or any
------------------------------------------
underwriter for the obligor is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the Trustee, U.S. Bank Trust National
Association.
Items 3-15 are not applicable because to the best of the Trustee's
------------------------------------------------------------------
knowledge the obligor is not in default under any Indenture for which the
-------------------------------------------------------------------------
Trustee acts as Trustee.
------------------------
16. List of Exhibits. List below all exhibits filed as a part of this
----------------
statement of eligibility and qualification.
1. Articles of Association of U.S. Bank Trust National Association.*
2. Certificate of Authority of U.S. Bank Trust National Association to
Commence Business.*
3. Authorization of the trustee to exercise corporate trust powers.*
4. Bylaws of U.S. Bank Trust National Association.*
5. Not Applicable.
6. Consents of U.S. Bank Trust National Association required by Section
321(b) of the Act. (Attached)
7. Latest Report of Condition of U.S. Bank Trust National Association.
(Attached)
* Incorporated by reference to the exhibit of the same number to the Form
T-1 filed with registration statement number 333-43889.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
U.S. Bank Trust National Association, a national banking association organized
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Seattle, and State of Washington,
on the 30th day of September, 1999.
U.S. BANK TRUST NATIONAL ASSOCIATION
By /s/ Dyan M. Huhta
--------------------------------
Dyan M. Huhta, Vice President
<PAGE>
Exhibit 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939 in connection with the proposed issuance by Metropolitan Mortgage &
Securities Co., Inc. of 9% Notes, we hereby consent that reports of examinations
by federal, state, territorial and district authorities may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
U.S. BANK TRUST NATIONAL ASSOCIATION
By /s/ Dyan M. Huhta
--------------------------------
Dyan M. Huhta, Vice President
Dated: September 30, 1999
------------------
<PAGE>
Federal Deposit Insurance Corporation
OMB Number: 3064-0062
Office of the Comptroller of the Currency
OMB Number: 1667-0081
Expires March 31, 2002
Federal Financial Institutions Examination Council
- --------------------------------------------------------------------------------
[1]
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
- --------------------------------------------------------------------------------
Consolidated Reports of Condition and Income for
A Bank With Domestic Offices Only and Total Assets of
$100 Million or More But Less Than $300 Million -- FFIEC 033
(19990630)
Report at the close of business June 30, 1999 -------------
(RCRI 8999)
This report is required by law; 12 U.S.C. This report form is to be filed
(S)324 (State member banks); 12 U.S.C. by banks with domestic offices
(S)1817 (State nonmember banks); and 12 only. Banks with foreign offices
U.S.C. (S)161 (National banks). (as defined in the instructions)
must file FFIEC 031.
- --------------------------------------------------------------------------------
Note: The Reports of Condition and Income The Reports of Condition and
must be signed by an authorized officer Income are to be prepared in
and the Report of Condition must be accordance with Federal
attested to by not less than two regulatory authority
directors (trustees) for State nonmember instructions.
banks and three directors for State member
and National banks. We, the undersigned directors
(trustees), attest to the
I, Merita D. Schollmeier, Vice President correctness of the Report of
------------------------------------- Condition (including the
Name and Title of Officer Authorized supporting schedules) for this
to Sign Report report date and declare that it
of the named bank do hereby declare that has been examined by us and to
the Reports of Condition and Income the best of our knowledge and
(including the supporting schedules) belief has been prepared in
for this report date have been prepared conformance with the
in conformance with the instructions instructions issued by the
issued by the appropriate Federal appropriate Federal regulatory
regulatory authority and are true to authority and is true and
the best of my knowledge and belief. correct.
/s/ SIGNATURE ILLEGIBLE
/s/ Merita D. Schollmeier --------------------------------
- --------------------------------------- Director (Trustee)
Signature of Officer Authorized to
Sign Report /s/ SIGNATURE ILLEGIBLE
--------------------------------
7-16-99 Director (Trustee)
- ---------------------------------------
Date of Signature /s/ SIGNATURE ILLEGIBLE
--------------------------------
Director (Trustee)
- --------------------------------------------------------------------------------
Submission of Reports
Each bank must prepare its Reports For electronic filing
of Condition and Income either: assistance, contact EDS Call
Report Services, 2150 N.
(a) in electronic form and then Prospect Ave., Milwaukee, WI
file the computer data file 53202, telephone (800)255-1571.
directly with the banking
agencies' collection agent, To fulfill the signature and
Electronic Data Systems attestation requirement for the
Corporation (EDS), by Reports of Condition and Income
modem or on computer for this report date, attach
diskette; or this signature page (or a
photocopy or a computer-
(b) in hard-copy (paper) form generated version of this page)
and arrange for another to the hard-copy record of the
party to convert the paper completed report that the bank
report to electronic form. places in its files.
That party (if other than
EDS) must transmit the bank's
computer data file to EDS.
- --------------------------------------------------------------------------------
FDIC Ceritificate Number 33804 Call No. 208 033 6/30/99
http://www.usbank.com STBK:53-0836 STCERT:53-33804
--------------------------------
Primary Internet Web Address of
Bank (Home Page). If any (TEXT U.S. Bank Trust National Association
4087) Two Union Square, 601 Union Street
(Example:www.examplebank.com) Seattle, WA 98101
Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, Office of the Comptroller of the Currency
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 6/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RI-1
Seattle, WA 98101 3
</TABLE>
Transit Number: 91000020
Consolidated Report of Income
for the period of January 1, 1999 - June 30, 1999
All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
Schedule RI - Income Statement
<TABLE>
<CAPTION>
<S> <C> <C> <C>
I280
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------------
1. Interest income: RIAD
a. Interest and fee income on loans (1): ----
(1) Real estate loans __________________________________________________________ 4246.. 0 1.a.1
(2) Installment loans __________________________________________________________ 4247.. 0 1.a.2
(3) Credit cards and related plans _____________________________________________ 4248.. 0 1.a.3
(4) Commerical (time and demand) and all other loans ___________________________ 4249.. 0 1.a.4
b. Income from lease financing receivables:
(1) Taxable leases______________________________________________________________ 4505.. 0 1.b.1
(2) Tax-exempt leases __________________________________________________________ 4307.. 0 1.b.2
c. Interest income on balances due from depository institutions (2)________________ 4115.. 1,994 1.c
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency obligations (including
mortgage-backed securities issued or guaranteed by FNMA, FHLMC or GNMA)_____ 4027.. 43 1.d.1
(2) Securities issued by states and political subdivisions in the U.S.:
(a) Taxable securities _____________________________________________________ 4506.. 0 1.d.2a
(b) Tax-exempt securities __________________________________________________ 4507.. 0 1.d.2b
(3) Other domestic debt securities (including mortgage-backed securities not
issued or guaranteed by FNMA, FHLMC or GNMA) _______________________________ 3657.. 0 1.d.3
(4) Foreign debt securities ____________________________________________________ 3658.. 0 1.d.4
(5) Equity securities (including investments in mutual funds) __________________ 3659.. 99 1.d.5
e. Interest income from trading assets ____________________________________________ 4069.. 0 1.e
f. Interest income on federal funds sold and securities purchased under
agreements to resell ___________________________________________________________ 4020.. 0 1.f
g. Total interest income (sum of items 1.a through 1.f) ___________________________ 4107.. 2,136 1.g
- ---------------
(1) See instructions for loan classifications used in this schedule.
(2) Includes interest income on time certificates of deposit not held for trading.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101 Vendor I.D.: D Cert: 33804 Page RI-2
Transit Number: 91000020 4
</TABLE>
Schedule RI - Continued
<TABLE>
<CAPTION>
<S> <C> <C>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------
2. Interest expense:
a. Interest on deposits: RIAD Year-to-date
(1) Transaction account (NOW accounts, ATS accounts, and ----
telephone and preauthorized transfer accounts) __________________ 4508.. 0 .............. 2.a.1
(2) Nontransaction accounts:
(a) Money market deposit accounts (MMDAs) _______________________ 4509.. 0 .............. 2.a.2a
(b) Other savings deposits ______________________________________ 4511.. 0 .............. 2.a.2b
(c) Time deposits of $100,000 or more ___________________________ A517.. 0 .............. 2.a.2c
(d) Time deposits of less than $100,000 _________________________ A518.. 0 .............. 2.a.2d
b. Expense of federal funds purchased and securities sold under
agreements to repurchase ____________________________________________ 4180.. 0 .............. 2.b
c. Interest on demand notes issued to the U.S. Treasury, trading
Liabilities, and on other borrowed money ____________________________ 4185.. 0 .............. 2.c
d. Not applicable.
e. Interest on subordinated notes and debentures _______________________ 4200.. 0 .............. 2.e
f. Total interest expense (sum of items 2.a through 2.e) _______________ 4073.. 0 .............. 2.f
3. Net interest income (item 1.g minus 2.f) ________________________________ 4074.. . . . . . . 2,136 3.
4. Provisions:
a. Provision for credit losses _________________________________________ 4230.. . . . . . . 0 4.a
b. Provision for allocated transfer risk _______________________________ 4243.. . . . . . . 0 4.b
5. Noninterest income:
a. Income from fiduciary activities ____________________________________ 4070.. 3,548 .............. 5.a
b. Service charges on deposit accounts _________________________________ 4080.. 0 .............. 5.b
c. Trading revenue (must equal Schedule RI, sum of Memorandum
items 8.a through 8.d) ______________________________________________ A220.. 0 .............. 5.c
d. Not applicable.
e. Not applicable.
f. Other noninterest income:
(1) Other fee income ________________________________________________ 5407.. 177 .............. 5.f.1
(2) All other noninterest income* ___________________________________ 5408.. 0 .............. 5.f.2
g. Total noninterest income (sum of items 5.a through 5.f.(2)) _________ 4079.. . . . . . . 3,725 5.g
6. a. Realized gains (losses) on held-to-maturity securities ______________ 3521.. . . . . . . 0 6.a
b. Realized gains (losses) on available-for-sale securities ____________ 3196.. . . . . . . 0 6.b
7. Noninterest expense:
a. Salaries and employee benefits ______________________________________ 4135.. 1,267 .............. 7.a
b. Expenses of premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage
interest) ___________________________________________________________ 4217.. 70 .............. 7.b
c. Other noninterest expense* __________________________________________ 4092.. 2,036 .............. 7.c
d. Total noninterest expense (sum of items 7.a through 7.c) ____________ 4093.. . . . . . . 3,373 7.d
8. Income (loss) before income taxes and extraordinary items and
other adjustments (item 3 plus or minus items 4.a, 4.b, 5.g,
6.a, 6.b, and 7.d) ______________________________________________________ 4301.. . . . . . . 2,488 8.
9. Applicable income taxes (on item 8) _____________________________________ 4302.. . . . . . . 904 9.
10. Income (loss) before extraordinary items and other adjustments
(item 8 minus 9) ________________________________________________________ 4300.. . . . . . . 1,584 10.
11. Extraordinary items and other adjustments, net of income
taxes* __________________________________________________________________ 4320.. . . . . . . 0 11.
12. Net income (loss) (sum of items 10 and 11) ______________________________ 4340.. . . . . . . 1,584 12.
- -----------------------
* Describe on Schedule RI-E - Explanations.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D Cert: 33804 Page RI-3
Seattle, WA 98101 5
</TABLE>
Transit Number: 91000020
Schedule RI - Continued
<TABLE>
<CAPTION>
<S> <C> <C>
I281
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------------------
Memoranda RIAD Year-to-date
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired ----
after August 7, 1986, that is not deductible for federal income tax purposes _________ 4513.. 0 M.1
2. Income from the sale and servicing of mutual funds and annuities (included in
Schedule RI, item 8) _________________________________________________________________ 8431.. 0 M.2
3. Not applicable
4. Number of full-time equivalent employees at end of current period (round to nearest Number
------
whole number) ________________________________________________________________________ 4150.. 25 M.4
5. Interest and fee income on tax-exempt obligations (other than securities and leases)
of states and political subdivisions in the U.S. (reportable in Schedule RC-C, part I,
item 8) included in Schedule RI, item 1.a above ______________________________________ 4504.. 0 M.5
6. To be completed by banks with loans to finance agricultural production and other loans
to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans.
Interest and fee income on agricultural loans included in item 1.a above _____________ 4251.. 0 M.6
7. If the reporting bank has restated its balance sheet as a result of applying push down CCYY MM DD
accounting this calendar year, report the date of the bank's acquisition (1) _________ 9106.. N/A M.7
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments) RIAD Year-to-date
----
(sum of Memorandum items 8.a through 8.d must equal Schedule RI, item 5.c):
a. Interest rate exposures __________________________________________________________ 8757.. 0 M.8.a
b. Foreign exchange exposures _______________________________________________________ 8758.. 0 M.8.b
c. Equity security and index exposures ______________________________________________ 8759.. 0 M.8.c
d. Commodity and other exposures ____________________________________________________ 8760.. 0 M.8.d
9. Impact on income of off-balance sheet derivatives held for purposes other than trading:
a. Net increase (decrease) to interest income _______________________________________ 8761.. 0 M.9.a
b. Net (increase) decrease to interest expense ______________________________________ 8762.. 0 M.9.b
c. Other (noninterest) allocations __________________________________________________ 8763.. 0 M.9.c
10. Not applicable.
11. Does the reporting bank have a Subchapter S election in effect for federal income tax Yes No
purposes for the current tax year? ___________________________________________________ A530.. No M.11
12. Deferred portion of total applicable income taxes included in Schedule RI, items 9
and 11 (to be reported with the December Report of Income) ___________________________ 4772.. N/A M.12
- --------------------------
(1) For example, a bank acquired on June 1, 1997 would report 19970601
Schedule RI-A - Changes in Equity Capital
Indicate decreases and losses in parentheses.
I283
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------------------
RIAD
1. Total equity capital originally reported in the December 31, 1998, Reports of ----
Condition and Income _________________________________________________________________ 3215.. 110,729 1.
2. Equity capital adjustments from amended Reports of Income, net * _____________________ 3216.. 0 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) _________________ 3217.. 110,729 3.
4. Net income (loss) (must equal Schedule RI, item 12) __________________________________ 4340.. 1,584 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net ___________________ 4346.. 0 5.
6. Changes incident to business combinations, net _______________________________________ 4356.. 0 6.
7. LESS: Cash dividends declared on preferred stock ____________________________________ 4470.. 0 7.
8. LESS: Cash dividends declared on common stock _______________________________________ 4460.. 0 8.
9. Cumulative effect of changes in accounting principles from prior years * (see
instructions for this schedule) ______________________________________________________ 4411.. 0 9.
10. Corrections of material accounting errors from prior years * (see instructions for
this schedule) _______________________________________________________________________ 4412.. 0 10.
11. a. Change in net unrealized holding gains (losses) on available-for-sale securities __ 8433.. (5) 11.a
b. Change in accumulated net gains (looses) on cash flow hedges ______________________ 4574.. 0 11.b
12. Other transactions with parent holding company * (not included in item 5, 7, or
8 above) _____________________________________________________________________________ 4415.. 0 12.
13. Total equity capital end of current period (sum of items 3 through 12) (must equal
Schedule RC, item 28) ________________________________________________________________ 3210.. 112,308 13.
- -------------------
* Describe on Schedule RI-E - Explanations.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 PAGE RI-4
Seattle, WA 98101 6
</TABLE>
Transit Number: 91000020
Schedult RI-B - Charge-offs and Recoveries on Loan and Leases and Changes
in Allowance for Credit Losses
Part I. Charge-offs and Recoveries on Loans and Leases (1)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
I286
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
---------------- Calendar year-to-date ----------------
Part I excludes charge-offs and recoveries through the (Column A) (Column B)
allocated transfer risk reserve. Charge-offs Recoveries
------------------------ -------------------------
RIAD RIAD
---- ----
1. Real estate loans _____________________________________ 4256.. 0 4257.. 0 1.
2. Installment loans _____________________________________ 4258.. 0 4259.. 0 2.
3. Credit cards and related plans ________________________ 4262.. 0 4263.. 0 3.
4. Commerical (time and demand) and all other loans ______ 4264.. 0 4265.. 0 4.
5. Lease financing receivables ___________________________ 4266.. 0 4267.. 0 5.
6. Total (sum of items 1 through 5) ______________________ 4635.. 0 4605.. 0 6.
Memoranda
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
1. Loans to foreign governments and official institutions RIAD RIAD
---- ----
included in part I, items 1 through 4 above ___________ 4643.. 0 4627.. 0 M.1
2. To be completed by banks with loans to finance
agricultural production and other loans to farmers
(Schedule RC-C, part I, item 3) exceeding five percent
of total loans.
Agricultural loans included in part I, items 1 RIAD RIAD
---- ----
through 4, above ______________________________________ 4268.. 0 4269.. 0 M.2
3. Not applicable.
4. Loans to finance commercial real estate, construction,
and land development activities (not secured by real RIAD RIAD
estate) included in Schedule RI-B, part I, ---- ----
items 2 through 4, above ______________________________ 5443.. 0 5444.. 0 M.4
5. Real estate loans (sum of Memorandum items 5.a
through 5.e must equal Schedule RI-B, part I,
item 1, above):
a. Construction and land development _________________ 5445.. 0 5446.. 0 M.5.a
b. Secured by farmland _______________________________ 5447.. 0 5448.. 0 M.5.b
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4
family residential properties and extended
under lines of credit ________________________ 5449.. 0 5450.. 0 M.5.c1
(2) All other loans secured by 1-4 family
residential properties _______________________ 5451.. 0 5452.. 0 M.5.c2
d. Secured by multifamily (5 or more) residential
properties ________________________________________ 5453.. 0 5454.. 0 M.5.d
e. Secured by nonfarm nonresidential properties ______ 5455.. 0 5456.. 0 M.5.e
- ---------------------------
(1) See instructions for loan classifications used in this schedule.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RI-5
Seattle, WA 98101 7
</TABLE>
Transit Number: 91000020
Schedule RI-B - Continued
Part II. Changes in Allowance for Credit Losses
<TABLE>
<CAPTION>
<S> <C> <C>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
RIAD
----
1. Balance originally reported in the December 31, 1998, Reports of Condition and Income _ 3124.. 0 1.
2. Recoveries (must equal or exceed part I, item 6, column B above) ______________________ 2419.. 0 2.
3. LESS: Charge-offs (must equal or exceed part I, item 6, column A above) ______________ 2432.. 0 3.
4. Provision for credit losses (must equal Schedule RI, item 4.a) ________________________ 4230.. 0 4.
5. Adjustments * (see instructions for this schedule) ____________________________________ 4815.. 0 5.
6. Balance end of current period (sum of items 1 through 5) (must be equal or exceed
Schedule RC, item 4.b) ________________________________________________________________ A512.. 0 6.
- ----------------------
* Describe on Schedule RI-E - Explanations.
Schedule RI - E - Explanations
Schedule RI-E is to be completed each quarter on a calendar year-to-date basis.
Detail all adjustments in Schedules RI-A and RI-B, all extraordinary items and other adjustments in Schedule RI, and all
significant items of other noninterest income and other noninterest expense in Schedule RI. (See instructions for details.)
I295
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
1. All other noninterest income (from Schedule RI, item 5.f.(2)) RIAD Year-to-date
Report amounts that exceed 10% of Schedule RI, item 5.f.(2): ----
a. Net gains (losses) on other real estate owned _____________________________________ 5415.. N/A 1.a
b. Net gains (losses) on sales of loans ______________________________________________ 5416.. N/A 1.b
c. Net gains (losses on sales of premises and fixed assets ___________________________ 5417.. N/A 1.c
Itemize and describe the three largest other amounts that exceed 10% of
Schedule RI, item 5.f.(2):
TEXT RIAD
---- ----
d. 4461: _____________________________________________________________________________ 4461.. N/A 1.d
e. 4462: _____________________________________________________________________________ 4462.. N/A 1.e
f. 4463: _____________________________________________________________________________ 4463.. N/A 1.f
2. Other noninterest expense (from Schedule RI, item 7.c):
a. Amortization expense of intangible assets _________________________________________ 4531.. 915 2.a
Report amounts that exceed 10% of Schedule RI, item 7.c:
b. Net (gains) losses on other real estate owned _____________________________________ 5418.. N/A 2.b
c. Net (gains) losses on sales of loans ______________________________________________ 5419.. N/A 2.c
d. Net (gains) losses on sales of premises and fixed assets __________________________ 5420.. N/A 2.d
Itemize and describe the three largest other amounts that exceed 10% of
Schedule RI, item 7.c:
TEXT RIAD
---- ----
e. 4464: CTS EXPENSE - TRUST OPERATIONS INTERCOMPANY 4464 922 2.e
-----------------------------------------------------------------------------
f. 4467: _____________________________________________________________________________ 4467.. N/A 2.f
g. 4468: _____________________________________________________________________________ 4468.. N/A 2.g
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RI-6
Seattle, WA 98101 8
</TABLE>
Transit Number: 91000020
Schedule RI-E - Continued
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
3. Extraordinary items and other adjustments and applicable income tax effect
(from Schedule RI, item 11.) (itemize and describe all extraordinary items
and other adjustments):
TEXT RIAD RIAD Year-to-date
---- ---- ----
a. (1) 6373: Effect of adopting FAS 133, "Accounting
for Derivative Instruments and
Hedging Activities" ______________________ ................. 6373.. 0 3.a.1
(2) Applicable income tax effect ____________________ 4486.. 0 ................. 3.a.2
b. (1) 4487: ___________________________________________ ................. 4487.. 0 3.b.1
(2) Applicable income tax effect ____________________ 4488.. 0 ................. 3.b.2
c. (1) 4489: ___________________________________________ ................. 4489.. 0 3.c.1
(2) Applicable income tax effect ____________________ 4491.. 0 ................. 3.c.2
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A,
item 2) (itemize and describe all adjustments):
TEXT RIAD
---- ----
a. 4492: ____________________________________________________________________________ 4492.. N/A 4.a
b. 4493: ____________________________________________________________________________ 4493.. N/A 4.b
5. Cumulative effect of changes in accounting principles from prior years (from Schedule
RI-A, item 9) (itemize and describe all changes in accounting principles):
TEXT RIAD
---- ----
a. 4494: ____________________________________________________________________________ 4494.. N/A 5.a
b. 4495: ____________________________________________________________________________ 4495.. N/A 5.b
6. Corrections of material accounting errors from prior years (from Schedule RI-A, item
10) (itemize and describe all corrections):
TEXT RIAD
---- ----
a. 4496: ____________________________________________________________________________ 4496.. N/A 6.a
b. 4497: ____________________________________________________________________________ 4497.. N/A 6.b
7. Other transactions with parent holding company (from Schedule RI-A, item 12) (itemize
and describe all such transactions):
TEXT RIAD
---- ----
a. 4498: ____________________________________________________________________________ 4498.. N/A 7.a
b. 4499: ____________________________________________________________________________ 4499.. N/A 7.b
8. Adjustments to allowance for credit losses (from Schedule RI-B, part II,
item 5) (itemize and describe all adjustments):
TEXT RIAD
---- ----
a. 4521: ____________________________________________________________________________ 4521.. N/A 8.a
b. 4522: ____________________________________________________________________________ 4522.. N/A 8.b
I298 I299
9. Other explanations (the space below is provided for bank to briefly describe, at its
option, any other significant items affecting the Report of Income):
No comment: X (RIAD 4769)
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-1
Seattle, WA 98101 9
</TABLE>
Transit Number: 91000020
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
All schedules are to be reported in thousands of dollars. Unless otherwise indicated,
report the amount outstanding as of the last business day of the quarter.
Schedule RC - Balance Sheet
C200
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
ASSETS RCON
1. Cash and balances due from depository institutions (from Schedule RC-A): ----
a. Noninterest-bearing balances and currency and coin (1) ________________________ 0081.. 10,021 1.a
b. Interest-bearing balances (2) _________________________________________________ 0071.. 80,715 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) ____________________ 1754.. 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) __________________ 1773.. 4,788 2.b
3. Federal funds sold and securities purchased under agreements to resell ____________ 1350.. 0 3.
4. Loans and lease financing receivables: RCON
a. Loans and leases, net of unearned income ----
(from Schedule RC-C) _________________________________ 2122.. 0 ............................... 4.a
b. LESS: Allowance for loan and lease losses ___________ 3123.. 0 ............................... 4.b
c. LESS: Allocated transfer risk reserve _______________ 3128.. 0 ............................... 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) ___________________________ 2125.. 0 4.d
5. Trading assets ____________________________________________________________________ 3545.. 0 5.
6. Premises and fixed assets (including capitalized leases) __________________________ 2145.. 150 6.
7. Other real estate owned (from Schedule RC-M) ______________________________________ 2150.. 0 7.
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) ____________________________________________________________________ 2130.. 0 8.
9. Customers' liability to this bank on acceptances outstanding ______________________ 2155.. 0 9.
10. Intangible assets (from Schedule RC-M) ____________________________________________ 2143.. 17,073 10.
11. Other assets (from Schedule RC-F) _________________________________________________ 2160.. 3,418 11.
12. Total assets (sum of items 1 through 11) __________________________________________ 2170.. 116,165 12.
- ---------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-2
Seattle, WA 98101 10
</TABLE>
Transit Number: 91000020
Schedule RC - Continued
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of ----
columns A and C from Schedule RC-E) _________________________________________ 2200.. 0 13.a
RCON
----
(1) Noninterest-bearing (1) _____________________ 6631.. 0 .............................. 13.a.1
(2) Interest-bearing ____________________________ 6636.. 0 .............................. 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs _______________ ..............................
(1) Noninterest-bearing ____________________________________________________ ..............................
(2) Interest-bearing _______________________________________________________ ..............................
14. Federal funds purchased and securities sold under agreements to repurchase ______ 2800.. 0 14.
15. a. Demand notes issued to the U.S. Treasury ____________________________________ 2840.. 0 15.a
b. Trading liabilities _________________________________________________________ 3548.. 0 15.b
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
a. With a remaining maturity of one year or less _______________________________ 2332.. 0 16.a
b. With a remaining maturity of more than one year through three years _________ A547.. 0 16.b
c. With a remaining maturity of more than three years __________________________ A548.. 0 16.c
17. Not applicable
18. Bank's liability on acceptances executed and outstanding ________________________ 2920.. 0 18.
19. Subordinated notes and debentures (2) ___________________________________________ 3200.. 0 19.
20. Other liabilities (from Schedule RC-G) __________________________________________ 2930.. 3,857 20.
21. Total liabilities (sum of items 13 through 20) __________________________________ 2948.. 3,857 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ___________________________________ 3838.. 0 23.
24. Common stock ____________________________________________________________________ 3230.. 100 24.
25. Surplus (exclude all surplus related to preferred stock) ________________________ 3839.. 109,468 25.
26. a. Undivided profits and capital reserves ______________________________________ 3632.. 2,739 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities ______ 8434.. 1 26.b
c. Accumulated net gains (losses) on cash flow hedges __________________________ 4336.. 0 26.c
27. Cumulative foreign currency translation adjustments _____________________________ ..................
28. Total equity capital (sum of items 23 through 27) _______________________________ 3210.. 112,308 28.
29. Total liabilities and equity capital (sum of items 21 and 28) ___________________ 3300.. 116,165 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes
the most comprehensive level of auditing work performed for the bank by independent
external auditors as of any date during 1998 _____________________________________ 6724.. N/A M.1
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compiliation of the bank's financial statements by
submits a report on the consolidated holding company (but external auditors
not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in accordance 8 = No external audit work
with generally accepted auditing standards by a certified
public accounting firm (may be required by state charter-
ing authority)
- --------------------------
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
(2) Includes limited life preferred stock and related surplus.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-3
Seattle, WA 98101 11
</TABLE>
Transit Number: 91000020
Schedule RC-A - Cash and Balances Due From Depository Institutions
Exclude assets held for trading.
<TABLE>
<CAPTION>
<S> <C> <C>
C205
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
RCON
1. Cash items in process of collection, unposted debits, and currency and coin: ----
a. Cash items in process of collection and unposted debits _____________________________ 0020.. 0 1.a
b. Currency and coin ___________________________________________________________________ 0080.. 0 1.b
2. Balances due from depository institutions in the U.S.:
a. U.S. branches and agencies of foreign banks _________________________________________ 0083.. 0 2.a
b. Other commercial banks in the U.S. and other depository institutions in the U.S. ____ 0085.. 90,736 2.b
3. Balances due from banks in foreign countries and foreign central banks:
a. Foreign branches of other U.S. banks ________________________________________________ 0073.. 0 3.a
b. Other banks in foreign countries and foreign central banks __________________________ 0074.. 0 3.b
4. Balances due from Federal Reserve Banks _________________________________________________ 0090.. 0 4.
5. Total (sum of items 1 through 4) (must equal Schedule RC, sum of items 1.a and 1.b) _____ 0010.. 90,736 5.
Memorandum
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
RCON
1. Noninterest-bearing balances due from commercial banks in the U.S. ----
(included in items 2.a and 2.b above) ___________________________________________________ 0050.. 10,021 M.1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-4
Seattle, WA 98101 12
Transit Number: 91000020
Schedule RC-B - Securities
Exclude assets held for trading.
</TABLE>
<TABLE>
<CAPTION>
C210
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Held-to-maturity Available-for-sale
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amortized Cost Fair Value (1)
------------------- --------------- ---------------- ---------------------
RCON RCON RCON RCON
---- ---- ---- ----
1. U.S. Treasury securities____________________0211.. 0 0213.. 0 1286.. 1,500 1287.. 1,501 1.
2. U.S. Government agency obligations
(exclude mortgage-banked securities):
a. Issued by U.S. Government agencies (2)__1289.. 0 1290.. 0 1291.. 0 1293.. 0 2.a
b. Issued by U.S. Government-sponsored
agencies (3)____________________________1294.. 0 1295.. 0 1297.. 0 1298.. 0 2.b
3. Securities issued by states and political
subdivisions in the U.S.:
a. General obligations_____________________1676.. 0 1677.. 0 1678.. 0 1679.. 0 3.a
b. Revenue obligations_____________________1681.. 0 1686.. 0 1690.. 0 1691.. 0 3.b
c. Industrial development and similar
obligations_____________________________1694.. 0 1695.. 0 1696.. 0 1697.. 0 3.c
4. Mortgage-backed securities (MBS):
a. Pass-through securities:
(1) Guaranteed by GNMA_________________1698.. 0 1699.. 0 1701.. 0 1702.. 0 4a1
(2) Issued by FNMA and FHLMC___________1703.. 0 1705.. 0 1706.. 0 1707.. 0 4a2
(3) Other pass-through securities______1709.. 0 1710.. 0 1711.. 0 1713.. 0 4a3
b. Other mortgage-backed securities
(include CMOs, REMICs, and stripped
MBS):
(1) Issued or guaranteed by FNMA,
FHLMC, or GNMA_____________________1714.. 0 1715.. 0 1716.. 0 1717.. 0 4b1
(2) Collateralized by MBS issued or
guaranteed by FNMA, FHLMC, or GNMA_1718.. 0 1719.. 0 1731.. 0 1732.. 0 4b2
(3) All other mortgage-backed
securities_________________________1733.. 0 1734.. 0 1735.. 0 1736.. 0 4b3
5. Other debt securities
a. Other domestic debt securities__________1737.. 0 1738.. 0 1739.. 0 1741.. 0 5.a
b. Foreign debt securities_________________1742.. 0 1743.. 0 1744.. 0 1746.. 0 5.b
6. Equity securities:
a. Investments in mutual funds and other
equity securities with readily
determinable fair values________________ ... . . . . ... . . . . A510.. 0 A511.. 0 6.a
b. All other equity securities(1)__________ ... . . . . ... . . . . 1752.. 3,287 1753.. 3,287 6.b
7. Total (sum of items 1 through 6) (total of
column A must equal Schedule RC, item 2.a)
(total of column D must equal Schedule RC,
item 2.b)___________________________________1754.. 0 1771.. 0 1772.. 4,787 1773.. 4,788 7.
</TABLE>
- ------------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.b, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool Certificates,"
U.S. Maritime Administration obligations, and Export-Import Bank
participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by the
Farm Credit System, the Federal Home Loan Bank System, the Federal Home
Loan Mortgage Corporation, the Federal National Mortgage Association, the
Financing Corporation, Resolution Funding Corporation, the Student Loan
Marketing Association, and the Tennessee Valley Authority.
<PAGE>
Call Date: 6/30/1999 ST-BK:53-0836 FFIEC 033
Vendor ID: D CERT: 33804 Page RC - 5
U.S. Bank Trust National Association
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101
13
Transit Number: 91000020
Schedule RC- B - Continued
C212
Memoranda
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCON
----
1. Pledged securities(1)________________________________________________________________O416. . -1,101 M.1
2. Maturity and repricing date for debt securities (1, 2) (excluding those in nonaccrual
status):
a. Securities issued by the U.S. Treasury, U.S. Government agencies, and political
subdivisions in the U.S.; other non-mortgage debt securities; and mortgage
pass-through securities other than those backed by closed-end first lien 1-4
family residential mortgages with a remaining maturity or repricing frequency
of: (3, 4)
(1) Three months or less______________________________________________________A549. . 1,501 M.2.a.1
(2) Over three months through 12 months_______________________________________A550. . 0 M.2.a.2
(3) Over one year through three years_________________________________________A551. . 0 M.2.a.3
(4) Over three years through five years_______________________________________A552. . 0 M.2.a.4
(5) Over five years through 15 years__________________________________________A553. . 0 M.2.a.5
(6) Over 15 years_____________________________________________________________A554. . 0 M.2.a.6
b. Mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages with a remaining maturity or repricing frequency of:(3, 5)
(1) Three months or less______________________________________________________A555. . 0 M.2.b.1
(2) Over three months through 12 months_______________________________________A556. . 0 M.2.b.2
(3) Over one year through three years_________________________________________A557. . 0 M.2.b.3
(4) Over three years through five years_______________________________________A558. . 0 M.2.b.4
(5) Over five years through 15 years__________________________________________A559. . 0 M.2.b.5
(6) Over 15 years_____________________________________________________________A560. . 0 M.2.b.6
c. Other mortgage backed securities (include CMOs, REMICs and stripped MBS;
exclude mortgage pass-through securities) with an expected average life
of: (6)
(1) Three years or less_______________________________________________________A561. . 0 M.2.c.1
(2) Over three years__________________________________________________________A562. . 0 M.2.c.2
d. Debt securities with a REMAINING MATURITY of one year or less (included in
Memorandum items 2.a through 2.c above)________________________________________A248. . 1,501 M.2.d
3-6. Not Applicable.
7. Amortized cost of held-to-maturity securities sold or transferred to available-
for-sale or trading securities during the calendar year-to-date (report the amortized
cost at date of sale or transfer)____________________________________________________1778. . 0 M.7
8. Not applicable.
9. Structured notes (included in the held-to-maturity and available-for-sale accounts
in Schedule RC-B, items 2, 3, and 5):
a. Amortized cost_________________________________________________________________8782. . 0 M.9.a
b. Fair value_____________________________________________________________________8783. . 0 M.9.b
</TABLE>
- ---------------------
(1) Includes held-to-maturity securities at amortized cost and available-for-
sale securities at fair value.
(2) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(3) Report fixed rate debt securities by remaining maturity and floating rate
debt securities by repricing frequency.
(4) Sum of Memorandum items 2.a.(1) through 2.a.(6) plus any nonaccrual debt
securities in the categories of debt securities reported in Memorandum item
2.a that are included in Schedule RC-N, item 6, column C, must equal
Schedule RC-B, sum of items 1, 2, 3 and 5, columns A and D, plus mortgage
pass-through securities other than those backed by closed-end first lien 1-
4 family residential mortgages included in Schedule RC-B, item 4.a, columns
A and D.
(5) Sum of Memorandum items 2.b.(1) through 2.b.(6) plus any nonaccrual
mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages included in Schedule RC-N, item 6, column C, must
equal Schedule RC-B, item 4.a, sum of columns A and D, less the amount of
mortgage pass-through securities other than those backed by closed-end
first lien 1-4 family residential mortgages included in Schedule RC-B, item
4.a, columns A and D.
(6) Sum of Memorandum items 2.c.(1) and 2.c.(2) plus any nonaccrual "Other
mortgage-backed securities" included in Schedule RC-N, item 6, column C,
must equal Schedule RC-B, item 4.b, sum of columns A and D.
<PAGE>
Call Date: 6/30/99 ST-BK: 53-0836 FFIEC 033
Vendor ID:D CERT: 33804 Page RC-6
U.S. Bank Trust National Association
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101
14
Transit Number: 91000020
Schedule RC-C - Loans and Lease Financing Receivables
Part I. Loans and Leases
Do not deduct the allowance for loan and lease losses from amounts reported in
this schedule. Report total loans and leases, net of unearned income. Exclude
assets held for trading and commercial paper.
<TABLE>
<CAPTION>
C215
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Loans secured by real estate: RCON
----
a. Construction and land development____________________________________________________1415. . 0 1.a
b. Secured by farmland (including farm residential and other improvements)______________1420. . 0 1.b
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential properties and
extended under lines of credit__________________________________________________1797. . 0 1.c1
(2) All other loans secured by 1-4 family residential properties:
(a) Secured by first liens_____________________________________________________5367. . 0 1.c2a
(b) Secured by junior liens____________________________________________________5368. . 0 1.c2b
d. Secured by multifamily (5 or more) residential properties____________________________1460. . 0 1.d
e. Secured by nonfarm nonresidential properties_________________________________________1480. . 0 1.e
2. Loans to depository institutions:
a. To commercial banks in the U.S.:
(1) To U.S. branches and agencies of foreign banks__________________________________1506. . 0 2.a1
(2) To other commercial banks in the U.S.___________________________________________1507. . 0 2.a2
b. To other depository institutions in the U.S._________________________________________1517. . 0 2.b
c. To banks in foreign countries:
(1) To foreign branches of other U.S. banks_________________________________________1513. . 0 2.c1
(2) To other banks in foreign countries_____________________________________________1516. . 0 2.c2
3. Loans to finance agricultural production and other loans to farmers______________________1590. . 0 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile)________________________________________________________1763. . 0 4.a
b. To non-U.S. addressees (domicile)____________________________________________________1764. . 0 4.b
5. Acceptances of other banks_______________________________________________________________1755. . 0 5.
6. Loans to individuals for household, family, and other personal expenditures
(i.e., consumer loans) (includes purchased paper):
a. Credit cards and related plans (includes check credit and other revolving credit
plans)_______________________________________________________________________________2008. . 0 6.a
b. Other (includes single payment, installment, and all student loans)__________________2011. . 0 6.b
7. Loans to foreign governments and official institutions (including foreign central banks)_2081. . 0 7.
8. Obligations (other than securities and leases) of states and political subdivisions
in the U.S.______________________________________________________________________________2107. . 0 8.
9. Other Loans:
a. Loans for purchasing or carrying securities (secured and unsecured)__________________1545. . 0 9.a
b. All other loans (exclude consumer loans)_____________________________________________1564. . 0 9.b
10. Lease financing receivables (net of unearned income)_____________________________________2165. . 0 10.
11. LESS: Any unearned income on loans reflected in items 1-9 above_________________________2123. . 0 11.
12. Total loans and leases, net of unearned income (sum of items 1 through 10 minus item 11)
(must equal Schedule RC, item 4.a)_______________________________________________________2122. . 0 12.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-7
Seattle, WA 98101 15
</TABLE>
Transit Number: 91000020
Schedule RC-C - Continued
Part I. Continued
<TABLE>
<CAPTION>
<S> <C>
Memoranda Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
RCON
----
1. Not applicable
2. Loans (1) and leases restructured and in compliance with modified terms (included in
Schedule RC-C, part 1, above, and not reported as past due or nonaccrual in Schedule
RC-N, Memorandum item 1):
a. Real estate loans_______________________________________________________________________1617.. 0 M.2.a
b. All other loans and all lease financing receivables (exclude loans to individuals
for household, family, and other personal expenditures)_________________________________8691.. 0 M.2.b
3. Maturity and repricing data for loans and leases (excluding those in nonaccrual status):
a. Closed-end loans secured by first liens on 1-4 family residential properties
(reported in Schedule RC-C, Part I, item 1.c.2a) with a remaining maturity or
repricing frequency of: (2, 3)
(1) Three months or less_______________________________________________________________A564.. 0 M.3.a1
(2) Over three months through 12 months________________________________________________A565.. 0 M.3.a2
(3) Over one year through three years__________________________________________________A566.. 0 M.3.a3
(4) Over three years through five years________________________________________________A567.. 0 M.3.a4
(5) Over five years through 15 years___________________________________________________A568.. 0 M.3.a5
(6) Over 15 years______________________________________________________________________A569.. 0 M.3.a6
b. All loans and leases (reported in Schedule RC-C, Part I, items 1 through 10) excluding
closed-end loans secured by first liens on 1-4 family residential properties (reported
in Schedule RC-C, Part I, item 1.c.2a) with a remaining maturity or repricing frequency
of (2, 4)
(1) Three months or less_______________________________________________________________A570.. 0 M.3.b1
(2) Over three months through 12 months________________________________________________A571.. 0 M.3.b2
(3) Over one year through three years__________________________________________________A572.. 0 M.3.b3
(4) Over three years through five years________________________________________________A573.. 0 M.3.b4
(5) Over five years through 15 years___________________________________________________A574.. 0 M.3.b5
(6) Over 15 years______________________________________________________________________A575.. 0 M.3.b6
c. Loans and leases (reported in Schedule RC-C, Part I, items 1 through 10) with a
REMAINING MATURITY of one year or less__________________________________________________A247.. 0 M.3.c
d. Loans secured by nonfarm nonresidential properties (reported in Schedule RC-C,
Part I, item 1.e) with a REMAINING MATURITY of over five years__________________________A577.. 0 M.3.d
e. Commercial and industrial loans (reported in Schedule RC-C, Part I, item 4) with a
REMAINING MATURITY of over three years__________________________________________________A578.. 0 M.3.e
4. Loans to finance commercial real estate, construction, and land developement activities
(not secured by real estate) included in Schedule RC-C, part I, items 4 and 9.b,
page RC-6 (5)_______________________________________________________________________________2746.. 0 M.4
5. Loans and leases held for sale (included in Schedule RC-C, part I, Pg RC-6)_________________5369.. 0 M.5
6. Adjustable rate closed-end loans secured by first liens on 1-4 family residential
properties in domestic offices (included in Schedule RC-C, Part I, item 1.c.(2)(a),
page RC-6)__________________________________________________________________________________5370.. 0 M.6
___________________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
(1) See instructions for loan classifications used in Memorandum item 2.
(2) Report fixed rate loans and leases by remaining maturity and floating rate loans by repricing frequency.
(3) Sum of Memorandum items 3.a.(1) through 3.a.(6) plus total nonaccrual closed-end loans secured by first
liens on 1-4 family residential properties included in Schedule RC-N,
Memorandum item 4.c.(2), column C, must equal total closed-end loans
secured by first liens on 1-4 family residential properties from Schedule
RC-C, part I, item 1.c.(2)(a).
(4) Sum of Memorandum items 3.b.(1) through 3.b.(6) plus total nonaccrual loans and leases from Schedule RC-N, sum of
items 1 through 5, column C, minus nonaccrual closed-end loans secured by
first liens on 1-4 family residential properties included in Schedule RC-N,
Memorandum item 4.c.(2), column C, must equal total loans and leases from
Schedule RC-C, Part I, sum of items 1 through 10, minus total closed-end
loans secured by first liens on 1-4 family residential properties from
Schedule RC-C, part I, item 1.c.(2)(a).
(5) Exclude loans secured by real estate that are included in Schedule RC-C,
part I, items 1.a through 1.e.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-7a
Seattle, WA 98101 15a
</TABLE>
Transit Number: 91000020
Schedule RC-C - Continued
Part II. Loans to Small Businesses and Small Farms
Schedule RC-C, Part II is to be reported only with the June Report of Condition.
Report the number and amount currently outstanding as of June 30 of business
loans with "original amounts" of $1,000,000 or less and farm loans with
"original amounts" of $500,000 or less. The following guidelines should be used
to determine the "original amount" of a loan: (1) For loans drawn down under
lines of credit or loan commitments, the "original amount" of the loan is the
size of the line of credit or loan commitment when the line of credit or loan
commitment was most recently approved, extended, or renewed prior to the report
date. However, if the amount currently outstanding as of the report date exceeds
this size, the "original amount" is the amount currently outstanding on the
report date. (2) For loan participations and syndications, the "original amount"
of the loan participation or syndication is the entire amount of the credit
originated by the lead lender. (3) For all other loans, the "original amount"
is the total amount of the loan at origination or the amount currently
outstanding as of the report date, whichever is larger.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
C218
Loans to Small Businesses
1. Indicate in the appropriate box at the right whether all or substantially all of the
dollar volume of your bank's "Loans secured by nonfarm nonresidential properties" reported
in Schedule RC-C, part I, item 1.e, and all or substantially all of the dollar volume of
your bank's "Commercial and industrial loans to U.S. addressees" reported in Schedule RC-C, RCON YES NO
part I, item 4.a, have original amounts of $100,000 or less (If your bank has no loans ---- --- --
outstanding in both of these two loan categories, place an "X" in the box marked "NO.":)_____ 6999.. X 1.
If YES, complete items 2.a and 2.b below, skip items 3 and 4, and go to item 5.
If NO and your bank has loans outstanding in either loan category, skip items 2.a and 2.b, complete items 3 and 4 below, and go to
item 5. If NO and your bank has no loans outstanding in both loan categories, skip items 2 through 4 and go to item 5.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
2. Report the total number of loans currently outstanding
for each of the following Schedule RC-C, part I, loan Number of Loans
categories: --------------------------
a. "Loans secured by nonfarm nonresidential properties" RCON
reported in Schedule RC-C, part I, item 1.e (Note: ----
Item 1.e divided by the number of loans
should NOT exceed $100,000.)____________________________5562.. N/A 2.a
b. "Commercial and industrial loans to U.S. addressees"
reported in Schedule RC-C, part I, item 4.a (Note:
Item 4.a divided by the number of loans should NOT
exceed $100,000.)_______________________________________5563.. N/A 2.b
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------------
(Column A) (Column B)
Number of Loans Amount Currently Outstanding
-------------------------- ----------------------------
3. Number and amount currently outstanding of "Loans secured
by nonfarm nonresidential properties" reported in Schedule
RC-C, part I, item 1.e (sum of items 3.a through 3.c must RCON RCON
be less than or equal to Schedule RC-C, part I, item 1.e): ---- ----
a. With original amounts of $100,000
or less__________________________________________________5564.. N/A 5565.. N/A 3.a
b. With original amounts of more than $100,000 through
$250,000_________________________________________________5566.. N/A 5567.. N/A 3.b
c. With original amnounts of more than $250,000 through
$1,000,000_______________________________________________5568.. N/A 5569.. N/A 3.c
4. Number and amount currently outstanding of "Commercial and
industrial loans to U.S. addressees" reported in Schedule
RC-C, part I, item 4.a (sum of items 4.a through 4.c must RCON RCON
be less than or equal to Schedule RC-C, part I, item 4.a): ---- ----
a. With original amounts of $100,000
or less__________________________________________________5570.. N/A 5571.. N/A 4.a
b. With original amounts of more than $100,000 through
$250,000_________________________________________________5572.. N/A 5573.. N/A 4.b
c. With original amounts of more than $250,000 through
$1,000,000_______________________________________________5574.. N/A 5575.. N/A 4.c
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-7b
Seattle, WA 98101 15b
</TABLE>
Schedule RC-C - Continued
Part II. Continued
Agricultural Loans to Small Farms
<TABLE>
<CAPTION>
<S> <C> <C> <C>
5. Indicate in the appropriate box at the right whether all or substantially all of the
dollar volume of your bank's "Loans secured by farmland (including farm residential and
other improvements)" reported in Schedule RC-C, part I, item 1.b, and all or
substantially all of the dollar volume of your bank's "Loans to finance agricultural
production and other loans to farmers" reported in Schedule RC-C, part I, item 3, have RCON YES NO
original amounts of $100,000 or less (If your bank has no loans outstanding in both of ---- --- --
these two loan categories, place an "X" in the box mnarked "NO."):_________________________6860.. X 5.
If YES, complete items 6.a and 6.b below and do not complete items 7 and 8.
If NO and your bank has loans outstanding in either loan category, skip items 6.a and 6.b and complete items 7 and 8 below.
IF NO and your bank has no loans outstanding in both loan categories, do not complete items 6 through 8.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
6. Report the total number of loans currently outstanding Number of Loans
for each of the following Schedule RC-C, part I, loan --------------------------
categories:
a. "Loans secured by farmland (including farm residential RCON
and other improvements)" reported in Schedule RC-C, ----
part I, item 1.b. (Note: Item 1.b divided by the
number of loans should NOT exceed $100,000.)____________5576.. N/A 6.a
b. "Loans to finance agricultural production and other
loans to farmers" reported in Schedule RC-C, part I,
item 3 (Note: Item 3, divided by the number of
loans should NOT exceed $100,000)_______________________5577.. N/A 6.b
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
(Column A) (Column B)
Number of Loans Amount Currently Outstanding
-------------------------- ----------------------------
7. Number and amount currently outstanding of "Loans secured
by farmland (including farm residential and other
improvements)" reported in Schedule RC-C, part I, item 1.b
(sum of items 7.a through 7.c must be less than or equal RCON RCON
to Schedule RC-C, part I, item 1.b): ---- ----
a. With original amounts of $100,000
or less_________________________________________________5578.. N/A 5579.. N/A 7.a
b. With original amounts of more than $100,000 through
$250,000________________________________________________5580.. N/A 5581.. N/A 7.b
c. With original amounts of more than $250,000 through
$500,000________________________________________________5582.. N/A 5583.. N/A 7.c
8. Number and amount currently outstanding of "Loans to
finance agricultural production and other loans to farmers"
reported in Schedule RC-C, part I, item 3 (sum of items
8.a through 8.c must be less than or equal to Schedule RCON RCON
RC-C, part I, item 3): ---- ----
a. With original amounts of $100,000
or less_________________________________________________5584.. N/A 5585.. N/A 8.a
b. With original amounts of more than $100,000 through
$250,000________________________________________________5586.. N/A 5587.. N/A 8.b
c. With original amounts of more than $250,000 through
$500,000________________________________________________5588.. N/A 5589.. N/A 8.c
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-8
Seattle, WA 98101 16
</TABLE>
Transit Number: 91000020
Schedule RC-E - Deposit Liabilities
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
C225
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
-----------------Transaction Accounts------------------Nontransaction Accounts-----
(Column A) (Column B)
Total transaction Memo: Total demand (Column C)
accounts (including total deposits (included in Total nontransaction
demand deposits) column A) accounts (including MMDAs)
- ------------------------------------------------------------------------------------------------------------------------------------
RCON RCON RCON
Deposits of: ---- ---- ----
1. Individuals, partnerships and corporations 2201.. 0 2240.. 0 2346.. 0 1.
2. U.S. Government_______________________________2202.. 0 2280.. 0 2520.. 0 2.
3. States and political subdivisions in
the U.S.______________________________________2203.. 0 2290.. 0 2530.. 0 3.
4. Commercial banks in the U.S.__________________2206.. 0 2310.. 0 2550.. 0 4.
5. Other depository institutions in the U.S._____2207.. 0 2312.. 0 2349.. 0 5.
6. Banks in foreign countries____________________2213.. 0 2320.. 0 2236.. 0 6.
7. Foreign governments and offical institu-
tions (including foreign central banks)_______2216.. 0 2300.. 0 2377.. 0 7.
8. Certified and official checks_________________2330.. 0 2330.. 0 .......... 0 8.
9. Total (sum of items 1 through 8) (sum of
columns A and C must equal Schedule RC,
item 13.a)____________________________________2215.. 0 2210.. 0 2385.. 0 9.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
Memoranda RCON
1. Selected components of total deposits (i.e., sum of item 9, columns A and C): ----
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts_____________________6835.. 0 M.1.a
b. Total brokered deposits_________________________________________________________________2365.. 0 M.1.b
c. Fully insured brokered deposits (included in Memorandum item 1.b above):
(1) Issued in denominations of less than $100,000______________________________________2343.. 0 M.1.c1
(2) Issued either in denominations of $100,000 or in denominations greater than
$100,000 and participated out by the broker in shares of $100,000 or less__________2344.. 0 M.1.c2
d. Maturity data for brokered deposits:
(1) Brokered deposits issued in denominations of less than $100,000 with a remaining
maturity of one year or less (included in Memorandum item 1.c.(1) above)___________A243.. 0 M.1.d1
(2) Brokered deposits issued in denominations of $100,000 or more with a remaining
maturity of one year or less (included in Memorandum item 1.b above)_______________A244.. 0 M.1.d2
e. Preferred deposits (uninsured deposits of states and political subdivisions in the
U.S. reported in item 3 above which are secured or collateralized as required under
state law) (to be completed for December report only)___________________________________5590.. N/A M.1.e
2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d
must equal item 9, column C, above):
a. Savings deposits:
(1) Money market deposit accounts (MMDAs)______________________________________________6810.. 0 M.2.a1
(2) Other savings deposits (excludes MMDAs)____________________________________________0352.. 0 M.2.a2
b. Total time deposits of less than $100,000_______________________________________________6648.. 0 M.2.b
c. Total time deposits of $100,000 or more_________________________________________________2604.. 0 M.2.c
3. All NOW accounts (included in column A above)_______________________________________________2398.. 0 M.3
4. Not applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-9
Seattle, WA 98101 17
</TABLE>
Transit Number: 9100020
Schedule RC-E - Continued
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Memoranda (Continued) Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
5. Maturity and repricing data for time deposits of less than $100,000:
a. Time deposits of less than $100,000 with a remaining maturity or repricing RCON
frequency of: (1, 2) ----
(1) Three months or less_______________________________________________________________A579.. 0 M.5.a1
(2) Over three months through 12 months________________________________________________A580.. 0 M.5.a2
(3) Over one year through three years__________________________________________________A581.. 0 M.5.a3
(4) Over three years___________________________________________________________________A582.. 0 M.5.a4
b. Time deposits of less than $100,000 with a REMAINING MATURITY of one year or less
(included in Memorandum items 5.a.(1) through 5.a.(4) above)____________________________A241.. 0 M.5.b
6. Maturity and repricing data for time deposits of $100,000 or more:
a. Time deposits of $100,000 or more with a remaining maturity or repricing
frequency of: (1, 3)
(1) Three months or less_______________________________________________________________A584.. 0 M.6.a1
(2) Over three months through 12 months________________________________________________A585.. 0 M.6.a2
(3) Over one year through three years__________________________________________________A586.. 0 M.6.a3
(4) Over three years___________________________________________________________________A587.. 0 M.6.a4
b. Time deposits of $100,000 or more with a REMAINING MATURITY of one year or less
(included in Memorandum items 6.a.(1) through 6.a.(4) above)____________________________A242.. 0 M.6.b
____________
(1) Report fixed rate time deposits by remaining maturity and floating rate time deposits by repricing frequency.
(2) Sum of Memorandum items 5.a.(1) through 5.a.(4) must equal Schedule RC-E Memorandum item 2.b above.
(3) Sum of Memorandum items 6.a.(1) through 6.a.(4) must equal Schedule RC-E Memorandum item 2.c above.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-10
Seattle, WA 98101 18
</TABLE>
Transit Number: 91000020
Schedule RC-F - Other Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
C230
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
RCON
----
1. Income earned, not collected on loans_______________________________________________________2164.. 0 1.
2. Net deferred tax assets (1)_________________________________________________________________2148.. 1,199 2.
3. Interest only strips receivable (not in the form of a security)(2) on:
a. Mortgage loans__________________________________________________________________________A519.. 0 3.a
b. Other financial assets__________________________________________________________________A520.. 0 3.b
4. Other (itemize and describe amounts that exceed 25% of this item)___________________________2168.. 2,219 4.
TEXT RCON
---- ----
a. 3549: ACCRUED TRUST FEES RECEIVABLE______________3549.. 595 ................ 4.a
b. 3550: ACCOUNTS RECEIVABLE________________________3550.. 1,098 ................ 4.b
c. 3551: ___________________________________________3551.. N/A ................ 4.c
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11)__________________________2160.. 3,418 5.
Memorandum Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
1. Deferred tax assets disallowed for regulatory capital purposes______________________________5610.. 0 M.1
</TABLE>
Schedule RC-G - Other Liabilities
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
C235
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
RCON
----
1. a. Interest accrued and unpaid on deposits (3)______________________________________________3645.. 0 1.a
b. Other expenses accrued and unpaid (includes accrued income taxes payable)________________3646.. 2,208 1.b
2. Net deferred tax liabilities (1)____________________________________________________________3049.. 0 2.
3. Minority interest in consolidated subsidiaries______________________________________________3000.. 0 3.
4. Other (itemize and describe amounts that exceed 25% of this item)___________________________2938.. 1,649 4.
TEXT RCON
---- ----
a. 3552: DEFERRED TRUST FEE INCOME__________________3552.. 1,642 ................ 4.a
b. 3553: ___________________________________________3553.. N/A ................ 4.b
c. 3554: ___________________________________________3554.. N/A ................ 4.c
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20)__________________________2930.. 3,857 5.
________________
(1) See discussion of deferred income taxes in Glossary entry on "income taxes."
(2) Report interest only strips receivables in the form of a security as
available-for-sale securities in Schedule RC, item 2.b, or as a trading
assets in Schedule RC, item 5 as appropriate.
(3) For savings banks, includes "dividends" accrued and unpaid on deposits.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-11
Seattle, WA 98101 19
</TABLE>
Transit Number: 91000020
Schedule RC-K - Quarterly Averages (1)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
C225
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
RCON
ASSETS ----
1. Interest-bearing balances due from depository institutions__________________________________3381.. 80,415 1.
2. U.S. Treasury securities and U.S. Government agency obligations(3)
(Including mortgage-backed securities issued or guaranteed by FNMA, FHLMC or GNMA___________3382.. 1,500 2.
3. Securities issued by states and political subdivisions in the U.S. (3)______________________3383.. 0 3.
4. a. Other debt securities (3) (Including mortgage-backed securities not issued or
guaranteed by FNMA, FHLMC or GNMA)______________________________________________________3647.. 0 4.a
b. Equity securities (4)(includes investments in mutual funds and Federal Reserve
stock)__________________________________________________________________________________3648.. 3,287 4.b
5. Federal funds sold and securities purchased under agreements to resell______________________3365.. 0 5.
6. Total loans (2):
a. Real estate loans_______________________________________________________________________3286.. 0 6.a
b. Installment loans_______________________________________________________________________3287.. 0 6.b
c. Credit cards and related plans__________________________________________________________3288.. 0 6.c
d. Commercial (time and demand) and all other loans________________________________________3289.. 0 6.d
7. Trading assets______________________________________________________________________________3401.. 0 7.
8. Lease financing receivables (net of unearned income)________________________________________3484.. 0 8.
9. Total assets (5)____________________________________________________________________________3368.. 116,461 9.
LIABILITIES
10. Interest-bearing transaction accounts (NOW accounts, ATS accounts, and telephone and
preauthorized transfer accounts) (exclude demand deposits)_________________________________3485.. 0 10.
11. Nontransaction accounts:
a. Money market deposit accounts (MMDAs)__________________________________________________3486.. 0 11.a
b. Other savings deposits_________________________________________________________________3487.. 0 11.b
c. Time deposits of $100,000 or more______________________________________________________A514.. 0 11.c
d. Time deposits of less than $100,000____________________________________________________A529.. 0 11.d
12. Federal funds purchased and securities sold under agreements to repurchase_________________3353.. 0 12.
13. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases_________________________________________________________________________3355.. 0 13.
Memorandum Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
1. To be completed by banks with loans to finance agricultural production and other
loans to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total
loans.
Agricultural loans (2) included in items 6.a through 6.d above______________________________3379.. 0 M.1
___________
(1) For all items, banks have the option of reporting either (1) an average of daily figures for the quarter, or (2) an
average of weekly figures (i.e., the Wednesday of each week of the quarter).
(2) See instructions for loan classifications used in this schedule.
(3) Quarterly averages for all debt securities should be based on amortized cost.
(4) Quarterly averages for all equity securities should be based on historical cost.
(5) The quarterly average for total assets should reflect all debt securities (not held for trading) at amortized cost,
equity securities with readily determinable fair values at the lower of cost or fair value, and equity securities
without readily determinable fair values at historical cost.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-12
Seattle, WA 98101 20
Transit Number: 91000020
Schedule RC-L - Off-Balance Sheet Items
Please read carefully the instructions for the preparation of Schedule RC-L. Some of the amounts reported
in Schedule RC-L are regarded as volume indicators and not necessarily as measures of risk.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
C260
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
RCON
1. Unused commitments: ----
a. Revolving, open-end lines secured by 1-4 family residential properties,
e.g., home equity lines_________________________________________________________________3814.. 0 1.a
b. Credit card lines_______________________________________________________________________3815.. 0 1.b
c. Commercial real estate, construction, and land development:
(1) Commitments to fund loans secured by real estate___________________________________3816.. 0 1.c.1
(2) Commitments to fund loans not secured by real estate_______________________________6550.. 0 1.c.2
d. Securities underwriting_________________________________________________________________3817.. 0 1.d
e. Other unused commitments________________________________________________________________3818.. 0 1.e
2. Financial standby letters of credit_________________________________________________________3819.. 0 2.
RCON
a. Amount of financial standby letters of credit ----
conveyed to others_______________________________3820.. 0 ................ 2.a
3. Performance standby letters of credit_______________________________________________________3821.. 0 3.
RCON
----
a. Amount of performance standby letters of credit
conveyed by others_______________________________3822.. 0 ................ 3.a
4. Commercial and similar letters of credit____________________________________________________3411.. 0 4.
5. Participations in acceptances (as described in the instructions) conveyed to others
by the reporting bank_______________________________________________________________________3428.. 0 5.
6. Participations in acceptances (as described in the instructions) acquired by the
reporting (nonaccepting) bank_______________________________________________________________3429.. 0 6.
7. Securities borrowed_________________________________________________________________________3432.. 0 7.
8. Securities lent (including customers' securities lent where the customer is
indemnified against loss by the reporting bank)_____________________________________________3433.. 0 8.
9. Financial assets transferred with recourse that have been treated as sold for
Call Report purpose:
a. First lien 1-to-4 family residential mortgage loans:
(1) Outstanding principal balance of mortgages transferred as of the report date_______A521.. 0 9.a.1
(2) Amount of recourse exposure on these mortgages as of the report date_______________A522.. 0 9.a.2
b. Other financial assets (excluding small business obligations reported in item 9.c):
(1) Outstanding principal balance of assets transferred as of the report date__________A523.. 0 9.b.1
(2) Amount of recourse exposure on these assets as of the report date__________________A524.. 0 9.b.2
c. Small business obligations transferred with recourse under Section 208 of the
Riegle Community Development and Regulatory Improvement Act of 1994:
(1) Outstanding principal balance of small business obligations transferred as
of the report date_________________________________________________________________A249.. 0 9.c.1
(2) Amount of retained recourse on these obligations as of the report date_____________A250.. 0 9.c.2
10. Notional amount of credit derivatives:
a. Credit derivatives on which the reporting bank is the guarantor________________________A534.. 0 10.a
b. Credit derivatives on which the reporting bank is the beneficiary______________________A535.. 0 10.b
11. Spot foreign exchange contracts____________________________________________________________8765.. 0 11.
12. All other off-balance sheet liabilities (exclude off-balance sheet derivatives)
(itemize and describe each component of this item over 25% of Schedule RC,
item 28, "total equity capital")___________________________________________________________3430.. 0 12.
TEXT RCON
---- ----
a. 3555:___________________________________________________3555.. N/A ................ 12.a
b. 3556:___________________________________________________3556.. N/A ................ 12.b
c. 3557:___________________________________________________3557.. N/A ................ 12.c
d. 3558:___________________________________________________3558.. N/A ................ 12.d
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-13
Seattle, WA 98101 21
Transit Number: 91000020
Schedule RC-L - Continued
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------------
13. All other off-balance sheet assets (exclude off-balance sheet derivatives)
(itemize and describe each component of this item over 25% of Schedule RC,
item 28, "Total equity capital")________________________________________________5591.... 0 13
TEXT RCON
---- ----
a. 5592:_______________________________________5592.. N/A .............. 13.a
b. 5593:_______________________________________5593.. N/A .............. 13.b
c. 5594:_______________________________________5594.. N/A .............. 13.c
d. 5595:_______________________________________5595.. N/A .............. 13.d
C261
Dollar Amounts in Thousands
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(Column A) (Column B) (Column C) (Column D)
Equity Commodity
Off-Balance Sheet Derivatives Position Interest Rate Foreign Exchange Derivative And Other
Indicators Contracts Contracts Contracts Contracts
- ----------------------------------------- ------------------- ------------------------- --------------------- --------------
14. Gross amounts (e.g., notional
amounts) (for each column, sum of
items 14.a through 14.e must equal
sum of items 15, 16.a, and 16.b): RCON RCON RCON RCON
---- ---- ---- ----
a. Future contracts____________________8693.. 0 8694.. 0 8695.. 0 8696.. 0 14.a
b. Forward contracts___________________8697.. 0 8698.. 0 8699.. 0 8700.. 0 14.b
c. Exchange-traded option contracts:
(1) Written options_________________8701.. 0 8702.. 0 8703.. 0 8704.. 0 14.c1
(2) Purchased options_______________8705.. 0 8706.. 0 8707.. 0 8708.. 0 14.c2
d. Over-the-counter option contracts:
(1) Written options_________________8709.. 0 8710.. 0 8711.. 0 8712.. 0 14.d1
(2) Purchased options_______________8713.. 0 8714.. 0 8715.. 0 8716.. 0 14.d2
e. Swaps_______________________________3450.. 0 3826.. 0 8719.. 0 8720.. 0 14.e
15. Total gross notional amount of
derivative contracts held for
trading________________________________A126.. 0 A127 0 8723.. 0 8724.. 0 15.
16. Total gross notional amount of
derivative contracts held for
purposes other than trading:
a. Contracts marked to market__________8725.. 0 8726.. 0 8727.. 0 8728.. 0 16.a
B. Contracts not marked to market______8729.. 0 8730.. 0 8731.. 0 8732.. 0 16.b
C. Interest rate swaps where the
bank has agreed to pay a fixed
rate________________________________A589.. 0 ......................................................... 16.c
17. Gross fair value of derivative
contracts:
a. Contracts held for trading:
(1) Gross positive fair value_______8733.. 0 8734.. 0 8735.. 0 8736.. 0 17.a1
(2) Gross negative fair value_______8737.. 0 8738.. 0 8739.. 0 8740.. 0 17.a2
b. Contracts held for puposes other
than trading that are marked to
market:
(1) Gross positive fair value_______8741.. 0 8742.. 0 8743.. 0 8744.. 0 17.b1
(2) Gross negative fair value_______8745.. 0 8746.. 0 8747.. 0 8748.. 0 17.b2
C. Contracts held for purposes other
than trading that are marked
to market:
(1) Gross positive fair value_______8749.. 0 8750.. 0 8751.. 0 8752.. 0 17.c1
(2) Gross negative fair value_______8753 0 8754.. 0 8755.. 0 8756.. 0 17.c2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St. Ste 2120 Page RC- 14
Seattle, WA 98101 Vendor ID: D CERT: 33804 22
</TABLE>
Transit Number: 91000020
Schedule RC-L - Continued
<TABLE>
<CAPTION>
C265
Memoranda Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1-2. Not applicable.
3. Unused commitments with an original maturity exceeding one year that are reported
in Schedule RC-L items 1.a through 1.e, above (report only the unused portions of
commitments that are fee paid or otherwise legally binding)___________________________3833.. 0 M.3
a. Participations in commitments with an original RCON
----
maturity exceeding one year conveyed to others______3834... 0 M.3.a
Schedule RC-M - Memoranda
C265
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------
1. Extensions of credit by the reporting bank to its executive officers, directors, principal
shareholders, and their related interests as of the report date:
a. Aggregate amount of all extensions of credit to all executive officers, directors, RCON
----
principal shareholders and their related interests_________________________________6164.. 0 1.a
b. Number of executive officers, directors, and principal
shareholders to whom the amount of all extensions of
credit by the reporting bank (including extensions of
credit to related interests) equals or exceeds the
lesser of $500,000 or 5 percent of total capital as RCON Number
---- ------
defined for this purpose in agency regulations______6165.. 0 1.b
2. Federal funds sold and securities purchased under agreements to resell with
U.S. branches and agencies of foreign banks (1) (included in Schedule RC,
item 3)_______________________________________________________________________________3405.. 0 2.
3. Not applicable.
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for
others (include both retained servicing and purchased servicing):
a. Mortgages serviced under a GNMA contract__________________________________________5500.. 0 4.a
b. Mortgages serviced under a FHLMC contract:
(1) Serviced with recourse to servicer____________________________________________5501.. 0 4.b.1
(2) Serviced without recourse to servicer_________________________________________5502.. 0 4.b.2
c. Mortgages serviced under a FNMA contract:
(1) Serviced under a regular option contract______________________________________5503.. 0 4.c.1
(2) Serviced under a special option contract______________________________________5504.. 0 4.c.2
d. Mortgages serviced under other servicing contracts________________________________5505.. 0 4.d
5. Not applicable.
6. Intangible assets:
a. Mortgage servicing rights_________________________________________________________3164.. 0 6.a
(1) Estimated fair value of mortgage servicing assets_____________________________A590.. 0 6.a.1
b. Other identifiable intangible assets:
(1) Purchased credit card relationships and nonmortgage servicing assets__________B026.. 0 6.b.1
(2) All other identifiable intangible assets______________________________________5507.. 16,969 6.b.2
c. Goodwill__________________________________________________________________________3163.. 104 6.c
d. Total (sum of items 6.a, 6.b.1, 6.b.2 and 6.c) (must equal Schedule RC, item 10)__2143.. 17,073 6.d
e. Amount of intangible assets (included in item 6.b.(2) above) that have been
grandfathered or are otherwise qualifying for regulatory capital purposes_________6442.. 0 6.e
7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to
redeem the debt_______________________________________________________________________3295.. 0 7.
- ------------
(1) Do not report federal funds sold and securities purchased under agreements to resell with other commmercial banks in the U.S. in
this item.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq. 601 Union St, Ste 2120 Page RC- 15
Seattle, WA 98101 Vendor ID: D CERT: 33804 23
Transit Number: 91000020
Schedule RC-M - Continued
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------------
RCON
----
8. a. Other real estate owned:
(1) Direct and indirect investments in real estate ventures__________________________ 5372.. 0 8.a.1
(2) All other real estate owned:
(a) Construction and land development____________________________________________ 5508.. 0 8.a.2a
(b) Farmland_____________________________________________________________________ 5509.. 0 8.a.2b
(c) 1-4 family residential properties____________________________________________ 5510.. 0 8.a.2c
(d) Multifamily (5 or more) residential properties_______________________________ 5511.. 0 8.a.2d
(e) Nonfarm nonresidential properties____________________________________________ 5512.. 0 8.a.2e
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7)________ 2150.. 0 8.a.3
b. Investments in unconsolidated subsidiaries and associated companies:
(1) Direct and indirect investments in real estate ventures__________________________ 5374.. 0 8.b.1
(2) All other investments in unconsolidated subsidiaries and associated companies____ 5375.. 0 8.b.2
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8)________ 2130.. 0 8.b.3
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC,
item 23, "Perpetual preferred stock and related surplus"______________________________ 3778.. 0 9.
10. Mutual fund and annuity sales during the quarter (include proprietary, private label,
and third party products):
a. Money market funds_________________________________________________________________ 6441.. 0 10.a
b. Equity securities funds____________________________________________________________ 8427.. 0 10.b
c. Debt securities funds______________________________________________________________ 8428.. 0 10.c
d. Other mutual funds_________________________________________________________________ 8429.. 0 10.d
e. Annuities__________________________________________________________________________ 8430.. 0 10.e
f. Sales of proprietary mutual funds and annuities (included in items 10.a through
10.e above)________________________________________________________________________ 8784.. 0 10.f
11. Net unamortized realized deferred gains (losses) on off-balance sheet derivative
contracts included in assets and liabilities reported in Schedule RC__________________ A525.. 0 11.
12. Amount of assets netted against nondeposit liabilities on the balance sheet
(Schedule RC) in accordance with generally accepted accounting principles (1)_________ A526.. 0 12.
13. Outstanding principal balance of loans other than 1-4 family residential mortgage
mortgage loans that are serviced for others (to be completed if this balance is
more than $10 million and exceeds ten percent of total assets)________________________ A591.. 0 13.
</TABLE>
Memorandum
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Reciprocal holdings of banking organizations' capital instruments (to be completed
for the December report only)_____________________________________________________________ 3836.. N/A M.1.
- ---------------------
(1) Exclude netted on-balance sheet amounts associated with off-balance sheet derivative
contracts, deferred tax assets netted against deferred tax liabilities, and assets
netted in accounting for pensions.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC- 16
Seattle, WA 98101 Vendor ID: D CERT: 33804 24
Transit Number: 91000020
</TABLE>
Schedule RC-N - Past Due and Nonaccrual Loans (1), Leases, and Other Assets
The FFIEC regards the information reported in all of Memorandum item 1, in items
1 through 7, column A and in Memorandum items 2 through 4, column A, as
confidential.
C270
<TABLE>
<CAPTION>
Dollars Amounts In Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
-------(Column A)------- -------(Column B)------- ----(Column C)----
Past due 30 through 89 Past due 90 days or more Nonaccrual
days and still accruing and still accruing
------------------------ ------------------------ ------------------------
<S> <C> <C> <C> <C>
RCON RCON RCON
---- ---- ----
1. Real estate loans_______________________________ 1210.. 0 1211.. 0 1212.. 0 1.
2. Installment loans_______________________________ 1214.. 0 1215.. 0 1216.. 0 2.
3. Credit cards and related plans__________________ 1218.. 0 1219.. 0 1220.. 0 3.
4. Commercial (time and demand) and all other
loans___________________________________________ 1222.. 0 1223.. 0 1224.. 0 4.
5. Lease financing receivables_____________________ 1226.. 0 1227.. 0 1228.. 0 5.
6. Debt securities and other assets (exclude
other real estate owned and other
repossessed assets)_____________________________ 3505.. 0 3506.. 0 3507.. 0 6.
====================================================================================================================================
</TABLE>
Amounts reported in items 1 through 5 above include guaranteed and unguaranteed
portions of past due and nonaccrual loans and leases. Report in item 7 below
certain guaranteed loans and leases that have already been included in the
amounts reported in items 1 through 5.
<TABLE>
<S> <C> <C> <C> <C>
7. Loans and leases reported in items 1
through 5 above which are wholly or RCON RCON RCON
partially guaranteed by the U.S. ---- ---- ----
Government______________________________________ 5612.. 0 5613.. 0 5614.. 0 7.
a. Guaranteed portion of loans and leases
included in item 7 above_____________________ 5615.. 0 5616.. 0 5617.. 0 7.a
</TABLE>
<TABLE>
<CAPTION>
Memoranda C273
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Restructured loans and leases included in
Scheduled RC-N, items 1 through 5, above RCON RCON RCON
(and not reported in Schedule RC-C, ---- ---- ----
Memorandum item 2)______________________________ 1658.. 0 1659.. 0 1661.. 0 M.1
2. To be completed by banks with loans to
finance agricultural production and other
loans to farmers (Schedule RC, part I,
item 3) exceeding five percent of total
loans:
Agricultural loans included in Schedule
RC-N, items 1 through 4, above__________________ 1230.. N/A 1231.. N/A 1232.. N/A M.2
3. Loans to finance commercial real estate,
construction, and land development
activities (not secured by real estate)
included in Schedule RC-N,
items 2 through 4, above________________________ 5421.. 0 5422.. 0 5423.. 0 M.3
4. Real estate loans (sum of Memorandum
items 4.a through 4.e must equal Schedule
RC-N, item 1, above):
a. Construction and land development____________ 5424.. 0 5425.. 0 5426.. 0 M.4a
b. Secured by farmland__________________________ 5427.. 0 5428.. 0 5429.. 0 M.4b
c. Secured by 1-4 family residential
properties:
(1) Revolving, open-end loans secured
by 1-4 family residential properties
and extended under lines of credit_______ 5430.. 0 5431.. 0 5432.. 0 M.4c1
(2) All other loans secured by 1-4
family residential properties____________ 5433.. 0 5434.. 0 5435.. 0 M.4c2
d. Secured by multifamily (5 or more)
residential properties_______________________ 5436.. 0 5437.. 0 5438.. 0 M.4d
e. Secured by nonfarm nonresidential
properties___________________________________ 5439.. 0 5440.. 0 5441.. 0 M.4e
</TABLE>
- -------------
(1) See instructions for loan classifications used in this schedule.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC- 17
Seattle, WA 98101 Vendor ID: D CERT: 33804 25
</TABLE>
Transit Number: 91000020
Schedule RC-O - Other Data for Deposit Insurance and FICO Assessments
<TABLE>
<CAPTION>
C275
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Unposted debits (see instructions): RCON
----
a. Actual amount of all unposted debits________________________________________ 0030.. 0 1.a
OR
b. Separate amount of unposted debits:
(1) Actual amount of unposted debits to demands deposits____________________ 0031.. N/A 1.b.1
(2) Actual amount of unposted debits to time and savings deposits (1)_______ 0032.. N/A 1.b.2
2. Unposted credits (see instructions):
a. Actual amount of all unposted credits_______________________________________ 3510.. 0 2.a
OR
b. Separate amount of unposted credits:
(1) Actual amount of unposted credits to demand deposits____________________ 3512.. N/A 2.b.1
(2) Actual amount of unposted credits to time and savings deposits (1)______ 3514.. N/A 2.b.2
3. Uninvested trust funds (cash) held in bank's own trust department (not
included in total deposits)____________________________________________________ 3520.. 0 3.
4. Deposits of consolidated subsidiaries (not included in total deposits):
a. Demand deposits of consolidated subsidiaries________________________________ 2211.. 0 4.a
b. Time and savings deposits (1) of consolidated subsidiaries__________________ 2351.. 0 4.b
c. Interest accrued and unpaid on deposits of consolidated subsidiaries________ 5514.. 0 4.c
5. Not applicable.
6. Reserve balances actually passed through to the Federal Reserve by the
reporting bank on behalf of its respondent depository institutions that
are also reflected as deposit liabilities of the reporting bank:
a. Amount reflected in demand deposits (included in Schedule RC-E,
Memorandum item 4.a)________________________________________________________ 2314.. 0 6.a
b. Amount reflected in time and savings deposits (1) (included in Schedule
RC-E, Memorandum item 4.b)__________________________________________________ 2315.. 0 6.b
7. Unamortized premiums and discounts on time and savings deposits: (1,2)
a. Unamortized premiums________________________________________________________ 5516.. 0 7.a
b. Unamortized discounts_______________________________________________________ 5517.. 0 7.b
8. The be completed by banks with "Oaker deposits."
a. Deposits purchased or acquired from other FDIC-insured institutions during
the quarter:
(1) Total deposits purchased or acquired from other FDIC-insured
institutions during the quarter_________________________________________ A531.. N/A 8.a.1
(2) Amount of purchased or acquired deposits reported in item 8.a.(1)
above attributable to a secondary fund (i.e., BIF members report
deposits attributable to SAIF; SAIF members report deposits attributable
to BIF)_________________________________________________________________ A532.. N/A 8.a.2
b. Total deposits sold or transferred during the quarter_______________________ A533.. N/A 8.b
- ---------------
(1) For FDIC insurance and FICO assessment purposes, "time and savings deposits" consists of
nontransaction accounts and all transaction accounts other than demand deposits.
(2) Exclude core deposit intangibles.
- -----------------------------------------------------------------------------------------------------------------------------
C277
Person to whom questions about the Reports of Condition and Income should be directed:
Janice Decker, Accountant III
- -----------------------------------------------------------------------------------------------------------------------------
Name and Title (TEXT 8901)
(651) 205-2024 00000 (651) 205-3008 00000
- ------------------------------------------------ --------------------------------------
Tel: Area code/phone number/extension (TEXT 8902) Fax: Area code/phone number (TEXT 9116)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC- 16
Seattle, WA 98101 Vendor ID: D CERT: 33804 26
Transit Number: 91000020
</TABLE>
Schedule RC-O - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RCON
----
9. Deposits in lifeline accounts_________________________________________________________ 5596.. 9.
10. Benefit-responsive "Depository Institution Investment Contracts" (included in total
deposits)_____________________________________________________________________________ 8432.. 0 10.
11. Adjustments to demand deposits reported in Schedule RC-E for certain reciprocal
demand balances:
a. Amount by which demand deposits would be reduced if the reporting bank's
reciprocal demand balances with the domestic offices of U.S. banks and savings
associations and insured branches in Puerto Rico and U.S. territories and
possessions that were reported on a gross basis in Schedule RC-E had been
reported on a net basis____________________________________________________________ 8785 0 11.a
b. Amount by which demand deposits would be increased if the reporting bank's
reciprocal demand balances with foreign banks and foreign offices of other U.S.
banks (other than insured branches in Puerto Rico and U.S. territories and
possessions) that were reported on a net basis in Schedule RC-E had been reported
on a gross basis___________________________________________________________________ A181 0 11.b
c. Amount by which demand deposits would be reduced if cash items in process of
collection were included in the calculation of the reporting bank's net
reciprocal demand balances with the domestic offices of U.S. banks and savings
associations and insured branches in Puerto Rico and U.S. territories and
possessions in Schedule RC-E_______________________________________________________ A182 0 11.c
12. Amount of assets netted against deposit liabilities on the balance sheet (Schedule
RC) in accordance with generally accepted accounting principles (exclude amounts
related to reciprocal demand balances):
a. Amounts netted against demand deposits_____________________________________________ A527 0 12.a
b. Amounts netted against time and savings deposits___________________________________ A528 0 12.a
</TABLE>
<TABLE>
<CAPTION>
Memoranda
(To be completed each quarter except as noted) Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Total deposits of the bank
(sum of Memorandum items 1.a.(1) and 1.b.(1) must equal Schedule RC, item 13.a): RCON
a. Deposit accounts of $ 100,000 or less: ----
(1) Amount of deposit accounts of $100,000 or less__________________________________ 2702.. 0 M.1.a1
(2) Number of deposit accounts of $100,000 or less RCON Number
---- ------
(to be completed for the June report only)______ 3779.. 0 ................... M.1.a2
b. Deposit accounts of more than $100,000:
(1) Amount of deposit accounts of more than $100,000________________________________ 2710.. 0 M.1.b1
(2) Number of deposit accounts of more than RCON Number
---- ------
$100,000_______________________________________ 2722 0 ................... M.1.b2
</TABLE>
2. Estimated amount of uninsured deposits of the bank:
a. An estimate of your bank's uninsured deposits can be determined by
multiplying the number of deposit accounts of more than $100,000 reported
in Memorandum item 1.b.(2) above by $100,000 and subtracting the result
from the amount of deposit accounts of more than $100,000 reported in
Memorandum item 1.b.(1) above.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Indicate in the appropriate box at right whether your bank has a method or RCON YES NO
procedure for determining a better estimate of uninsured deposits than the ---- --- --
estimate described above_________________________________________________________ 6861.. X M.2.a
b. If the box marked YES has been checked, report the estimate of uninsured deposits
determined by using your bank's method or procedure______________________________ 5597.. N/A M.2.b
</TABLE>
<TABLE>
<CAPTION>
<S>
3. Has the reporting institution been consolidated with a parent bank or savings <C> <C> <C>
association in that parent bank's or parent savings association's Call Report
or Thrift Financial Report?
If so, report the legal title and FDIC Certificate Number of the parent bank
or parent savings association: FDIC Cert No
TEXTA545: __________________________________________________________________________ A545.. N/A M.3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Vendor ID: D CERT: 33804 Page RC-19
Seattle, WA 98101 27
Transit Number: 91000020
Schedule RC-R - Regulatory Capital
This schedule must be completed by all banks as follows: Banks that reported total assets of $1 billion or more in Schedule RC,
item 12, for June 30, 1998, must complete items 2 through 9 and Memoranda items 1 and 2. Banks with assets of less than
$1 billion must complete items 1 through 3 below or Schedule RC-R in its entirety, depending on their response to item 1 below.
</TABLE>
<TABLE>
<CAPTION>
C280
<S> <C> <C> <C> <C>
1. Test for determining the extent to which Schedule RC-R must be completed. To be
completed only by banks with total assets of less than $1 billion. Indicate in the RCON YES NO
appropriate box at the right whether the bank has total capital greater than or equal ---- --- --
to eight percent of adjusted total assets _______________________________________________ 6056 X 1.
For purposes of this test, adjusted total assets equals total assets less cash, U.S. Treasuries, U.S. Government agency
obligations, and 80 percent of U.S. Government-sponsored agency obligations plus the allowance for loan and lease losses and
selected off-balance sheet items as reported on Schedule RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to complete items 2 and 3 below. If the box marked NO has been
checked, the bank must complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual risk-based capital ratio is less than eight percent
or that the bank is not in compliance with the risk-based capital guidelines.
</TABLE>
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
___________________________________________________________________________________________________________________________________
----------------------------------------------------------
<S> <C> <C>
NOTE: All banks are required to complete (Column A) (Column B)
items 2 and 3 below. See optional worksheet Subordinated Debt (1) and
for items 3.e through 3.f. Intermediate Term Other Limited-Life
Preferred Stock Capital Instruments
------------------------- -------------------------
2. Portion of qualifying limited-life capital instruments (original weighted average RCON
maturity of at least five years) that is includible in Tier 2 capital: ----
a. Subordinated debt (1) and intermediate term preferred stock_____________________________A515. . 0 2.a
b. Other limited-life capital instruments__________________________________________________A516. . 0 2.b
3. Amounts used in calculating regulatory capital ratios (report amounts determined by
the bank for its own internal regulatory capital analyses consistent with applicable
capital standards):
a. 1. Tier 1 capital_______________________________________________________________________8274. . 95,234 3.a.1
2. Tier 2 capital_______________________________________________________________________8275. . 0 3.a.2
3. Not applicable
b. Total risk-based capital________________________________________________________________3792. . 95,234 3.b
c. Excess allowance for loan and lease losses (amount that exceeds 1.25% of gross
risk-weighted assets)___________________________________________________________________A222. . 0 3.c
d. 1. Net risk-weighted assets (gross risk-weighted assets less excess allowance
reported in item 3.c above and all other deductions)_________________________________A223. . 21,677 3.d.1
2. Not applicable
e. Maximum contractual dollar amount of recourse exposure in low level recourse
transactions (to be completed only if bank uses the "direct reduction method"
to report these transactions in Schedule RC-R)__________________________________________1727. . 0 3.e
f. "Average total assets" (quarterly average reported in Schedule RC-K, less
all assets deducted from Tier 1 capital) (2)___________________________________________A224. . 99,388 3.f
</TABLE>
Items 4-9 and Memoranda items 1 and 2 are to be completed
by banks that answered NO to item 1 above and by banks
with total assets of $1 billion or more.
<TABLE>
<CAPTION>
------------------------------------------------------------
(Column A) (Column B)
Assets Recorded on the Credit Equivalent Amount
Balance Sheet of Off-Balance Sheet Items (3)
------------------------- ------------------------------
<S> <C> <C>
RCON RCON
---- ----
4. Assets and credit equivalent amounts of off-balance
sheet items assigned to the Zero percent risk category:
a. Assets recorded on the balance sheet___________________5163. . 4,825 . . . . . . 4.a
b. Credit equivalent amount of off-balance sheet items____ . . . . . . 3796. . N/A 4.b
________
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in columb B the risk-weighted amount of assets reported in column A.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC - 20
Seattle, WA 98101 Vendor ID: D CERT: 33804 28
</TABLE>
Transit Number: 91000020
Schedule RC-R - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
---------------------------------------------------------------
(Column A) (Column B)
Assets Recorded on the Credit Equivalent Amount
Balance Sheet of Off-Balance Sheet Items (1)
-------------------------- ------------------------------
5. Assets and credit equivalent amounts of off-balance
sheet items assigned to the 20 percent risk category:
a. Assets recorded on the balance sheet______________________ 5165.. 90,736 ................... 5.a
b. Credit equivalent amount of off-balance sheet items_______ ................... 3801.. 0 5.b
6. Assets and credit equivalent amounts of off-balance
sheet items assigned to the 50 percent risk category:
a. Assets recorded on the balance sheet______________________ 3802.. 0 ................... 6.a
b. Credit equivalent amount of off-balance sheet items_______ ................... 3803.. 0 6.b
7. Assets and credit equivalent amounts of off-balance
sheet items assigned to the 100 percent risk category:
a. Assets recorded on the balance sheet______________________ 3804.. 3,530 ................... 7.a
b. Credit equivalent amount of off-balance sheet items_______ ................... 3805.. 0 7.b
8. On-balance sheet asset values excluded from and
deducted in the calculation of the risk-based capital
ratio(2)_____________________________________________________ 3806.. 17,074 ................... 8.
9. Total assets recorded on the balance sheet (sum of
items 4.a, 5.a, 6.a, 7.a, and 8, column A) (must equal
Schedule RC, item 12 plus items 4.b and 4.c)_________________ 3807.. 116,165 ................... 9.
</TABLE>
Memoranda
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Current credit exposure across all off-balance sheet derivative contracts covered by RCON
----
the risk-based capital standards_____________________________________________________ 8764.. 0 M.1.
</TABLE>
<TABLE>
<CAPTION>
------------------------ With a remaining maturity of --------------------
(Column A) (Column B) (Column C)
Over one year
One year or less through five years Over five years
--------------------- -------------------- -------------------------
<S> <C> <C> <C>
2. Notional principal amounts of off-balance
sheet derivative contracts:(3) RCON RCON RCON
---- ---- ----
a. Interest rate contracts________________________ 3809.. 0 8766.. 0 8767.. 0 M.2a
b. Foreign exchange contracts_____________________ 3812.. N/A 8769.. N/A 8770.. N/A M.2b
c. Gold contracts_________________________________ 8771.. N/A 8772.. N/A 8773.. N/A M.2c
d. Other precious metals contracts________________ 8774.. N/A 8775.. N/A 8776.. N/A M.2d
e. Other commodity contracts______________________ 8777.. N/A 8778.. N/A 8779.. N/A M.2e
f. Equity derivative contracts____________________ A000.. N/A A001.. N/A A002.. N/A M.2f
</TABLE>
- ---------------
<TABLE>
<CAPTION>
<S> <C>
(1) Do not report in column B the risk-weighted amount of assets reported in column A.
(2) Include the difference between the fair value and the amortized cost of available-for-sale debt securities in item 8
and report the amortized cost of these debt securities in items 4 through 7 above. Item 8 also includes on-balance
sheet asset values (or portions thereof) of off-balance sheet interest rate, foreign exchange rate, and commodity
contracts and those contracts (e.g., future contracts) not subject to risk-based capital. Exclude from item 8 margin
accounts and accrued receivables not included in the calculation of credit equivalent amounts of off-balance sheet
derivatives as well as any portion of the allowance for loan and lease losses in excess of the amount that may be
included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days or less and all future contracts.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836 FFIEC 0033
Two Union Sq, 601 Union St, Ste 2120 Page RC- 21
Seattle, WA 98101 Vendor ID: D CERT: 33804 29
</TABLE>
Transit Number: 91000020
Optional Narrative Statement Concerning the Amounts
Reported in the Reports of Condition and Income
at close of business on June 30, 1999
<TABLE>
<CAPTION>
<S> <C>
U.S. Bank Trust National Association Seattle WA
- -------------------------------------------------------------- ---------------------------- --------------------------------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit the truncated statement will appear as the bank's statement
a brief narrative statement on the amounts reported in the both on agency computerized records and in computer-file
Reports of Condition and Income. This optional statement will releases to the public.
be made available to the public, along with the publicly
available data in the Reports of Condition and Income, in re- All information furnished by the bank in the narrative state-
sponse to any request for individual bank report data. How- ment must be accurate and not misleading. Appropriate efforts
ever, the information reported in column A and in all of Memo- shall be taken by the submitting bank to ensure the statement's
randum item 1 of Schedule RC-N is regarded as confidential and accuracy. The statement must be signed, in the space provided
will not be released to the public. BANKS CHOOSING TO SUBMIT below, by a senior officer of the bank who thereby attests to
THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT DOES its accuracy.
NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL
BANK CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CON- If, subsequent to the original submission, material changes are
FIDENTIAL ITEMS IN SCHEDULE RC-N, OR ANY OTHER INFORMATION submitted for the data reported in the Reports or Condition and
THAT THEY ARE NOT WILLING TO HAVE MADE PUBLIC OR THAT WOULD Income, the existing narrative statement will be deleted from
COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing not the files, and from disclosure; the bank, at its option, may
to make a statement may check the "No comment" box below and replace it with a statement, under signature, appropriate to
should make no entries of any kind in the space provided for the amended data.
the narrative statement; i.e., DO NOT enter in this space such
phrases as "No statement," "Not applicable," "N/A," "No The optional narrative statement will appear in agency records
comment," and "None." and in release to the public exactly as submitted (or amended
as described in the preceding paragraph) by the management of
the bank (except for the truncation of statements exceeding
The optional statement must be entered on this sheet. The the 750-character limit described above). THE STATEMENT WILL
statement should not exceed 100 words. Further, regardless NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY
of the number of words, the statement must not exceed 750 AGENCIES FOR ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT
characters, including punctuation, indentation, and standard SHALL NOT SIGNIFY THAT ANY FEDERAL SUPERVISORY AGENCY HAS VERI-
spacing between words and sentences. If any submission should FIED OR CONFIRMED THE ACCURACY OF THE INFORMATION CONTAINED
exceed 750 characters, as defined, it will be truncated at 750 THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY PUBLIC
characters with no notice to the submitting bank and RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT
OF THE REPORTING BANK.
</TABLE>
- --------------------------------------------------------------------------------
C271 C272
No comment: X (RCON 6979)
BANK MANAGEMENT STATEMENT (please type or print clearly) (TEXT 6980):
-------------------------------------- -----------------
Signature of Executive Officer of Bank Date of Signature
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 06/30/1999 ST-BK: 53-0836
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101 Vendor ID: D CERT: 33804 30
</TABLE>
Transit Number: 9100020
<TABLE>
<CAPTION>
THIS PAGE IS TO BE COMPLETED BY ALL BANKS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OMB No. For OCC: 1557-0081
OMB No. For FDIC: 3064-0052
OMB No. For Federal Reserve: 7100-0036
Expiration Date: 03/31/2002
SPECIAL REPORT
(Dollar Amount in Thousands)
</TABLE>
CLOSE OF BUSINESS DATE: FDIC Certificate Number:
June 30, 1999 33804 C700
- --------------------------------------------------------------------------------
LOANS TO EXECUTIVE OFFICERS (Completion as of each Call Report Date)
- --------------------------------------------------------------------------------
The following information is required by Public Laws 90-44 and 102-242, but does
not constitute a part of the Report of Condition. With each Report of Condition,
these Laws require all banks to furnish a report of all loans or other
extensions of credit to its executive officers made since the date of the
previous Report of Condition. Data regarding individual loans or other
extensions of credit are not required. If no such loans or other extensions of
credit were made during the period, insert "none" against subitem (a). (Exclude
the first $15,000 of indebtedness of each executive officer under bank credit
card plan.) See Sections 215.2 and 215.3 of Title 12 of the Code of Federal
Regulations (Federal Reserve Board Regulation 0) for the definitions of
"executive officer" and "extension of credit," respectively. Exclude loans and
other extensions of credit to directors and principal shareholders who are not
executive officers.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
RCON
----
a. Number of loans made to executive officers since the previous Call Report date_3561.. NONE a.
b. Total dollar amount of above loans (in thousands of dollars)...................3562.. 0 b.
c. Range of interest charged on above loans (example: 9-3/4% = 9.75%)........7701/7702.. 0.00% to 0.00% c.
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT: DATE (Month, Day, Year):
/s/ Merita D. Schollmeier, Vice President 7-16-99
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
EXHIBIT 99.1
- --------------------------------------------------------------------------------
The exchange offer will expire at 5:00 p.m., New York City time, on November 30,
1999, unless extended (the "expiration date").
- --------------------------------------------------------------------------------
Metropolitan Mortgage & Securities Co., Inc.
601 West 1st Avenue
Spokane, Washington 99201-5015
LETTER OF TRANSMITTAL
To Exchange outstanding Investment Debentures Series II and III,
and outstanding Installment Debentures Series I
- ------------------------------------------------------------------
Exchange Agent: Metropolitan Investment Securities, Inc.
- ------------------------------------------------------------------
To: Metropolitan Investment Securities, Inc.
- ------------------------------------------------------------------
FACSIMILE TRANSMISSION: (509) 835-2767
CONFIRM BY TELEPHONE TO: (509) 835-2210
- ------------------------------------------------------------------
VIA MAIL/HAND DELIVERY/OVERNIGHT DELIVERY:
Metropolitan Investment Securities, Inc.
Attn: Exchange Agent
601 West 1st Avenue
Spokane, Washington 99201-5015
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SHOWN ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges receipt of the Prospectus dated ____________,
1999 (the Prospectus") of Metropolitan Mortgage & Securities Co., Inc., a
Washington corporation (the "Issuer"), and this letter of transmittal for
Investment Debentures Series II and III, and Installment Debentures Series I,
which may be amended from time to time (this "letter"), which together
constitute the Issuer's offer (the "Exchange Offer") to exchange $1,000
principal amount and accrued interest of its 9% Notes due 2004 (the "Exchange
Notes") for each $1,000 in principal amount of its outstanding Investment
Debentures Series II and III, or Installment Debentures Series I (collectively,
the "debentures"), that were issued and sold in various transactions registered
under the Securities Act of 1933 (the "Securities Act").
The undersigned has completed, executed and delivered this letter to
indicate the action he or she desires to take with respect to the Exchange
Offer.
All holders of debentures who wish to tender their debentures must, prior
to the expiration date: (1) complete, sign, date and deliver this letter, or a
facsimile thereof, to the exchange agent, in person or to the address set forth
above; and (2) tender his or her debentures, or if a tender of debentures is to
be made by a book-entry transfer, confirm the book entry transfer, in each case
in accordance with the procedures for tendering described in the Instructions to
this letter. Holders of debentures whose certificates are not immediately
available with all other documents required by this letter to be delivered to
the exchange agent on or prior to the expiration
<PAGE>
date, must tender their debentures according to the guaranteed delivery
procedures listed under the caption "THE EXCHANGE OFFER--How to Tender Your
Debentures" in the Prospectus. See Instruction 1.
Upon the terms and subject to the conditions of the Exchange Offer, the
acceptance for exchange of debentures validly tendered and the issuance of the
Exchange Notes will be made on the exchange date, which is the first business
day following the expiration date of the offering. For the purposes of the
Exchange Offer, the Issuer shall be deemed to have accepted for exchange validly
tendered debentures only when the Issuer has given written notice thereof to the
exchange agent.
The Instructions included with this letter must be followed in their
entirety. Questions and requests for assistance or for additional copies of the
Prospectus or this letter may be directed to the exchange agent, at the address
listed above.
Please read the entire letter of transmittal, including the instructions to
this letter, carefully before checking any box below.
List in Box 1 below the debentures you own. If the space provided in Box 1
is inadequate, list the certificate numbers and principal amount of debentures
on a separate signed schedule and attach that schedule to this letter.
BOX 1
TO BE COMPLETED BY ALL TENDERING HOLDERS
<TABLE>
<CAPTION>
Name(s) and Address(es) of Certificate Principal Amount of Principal Amount of
Registered Holder(s) Number(s)/1/ Debentures Debentures
(Please fill in if blank) Tendered/2/
<S> <C> <C> <C>
_____________________________ ________________________ _____________________ ___________________________
_____________________________ ________________________ _____________________ ___________________________
_____________________________ ________________________ _____________________ ___________________________
Totals: _____________________ ___________________________
Additional Cash Total cash and
Tendered (3) debentures tendered
________________________ ________________________
________________________ ________________________
________________________ ________________________
</TABLE>
__________
1 Need not be completed if debentures are being tendered by book-entry
transfer.
2 Unless otherwise indicated, the entire principal amount of debentures
represented by a certificate delivered to the exchange agent will be deemed
to have been tendered.
3 You may tender cash in addition to your debentures to meet the $5,000
increments for exchange.
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned tenders to the Issuer the principal amount and accrued interest of
debentures indicated above. Subject to, and effective upon, the acceptance for
exchange of the debentures tendered with this letter, the undersigned exchanges,
assigns and transfers to, or upon the order of, the Issuer all right, title and
interest in and to the debentures tendered.
The undersigned constitutes and appoints the exchange agent as his or her
agent and attorney-in-fact (with full knowledge that the exchange agent also
acts as the agent of the Issuer) with respect to the tendered debentures, with
full power of substitution, to: (a) deliver certificates for such debentures;
(b) deliver debentures and all accompanying evidence of transfer and
authenticity to or upon the order of the Issuer upon receipt by the exchange
agent, as the undersigned's agent, of the Exchange Notes to which the
undersigned is entitled upon the acceptance by the Issuer of the debentures
tendered under the Exchange Offer; and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of the debentures, all in accordance
with the terms of the Exchange Offer. The power of attorney granted in this
paragraph shall be deemed irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that he or she has full
power and authority to tender, exchange, assign and transfer the debentures
tendered hereby and that the Issuer will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any
2
<PAGE>
adverse claim. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Issuer to be necessary or desirable to
complete the assignment and transfer of the debentures tendered.
By tendering debentures, the undersigned certifies (a) that it is not an
"affiliate" of the Issuer within the meaning of the Securities Act (an
"Affiliate"), that it is not a broker-dealer that owns debentures acquired
directly from the Issuer or an Affiliate, that it is acquiring the Exchange
Notes acquired directly from the Issuer or an Affiliate, that it is acquiring
the Exchange Notes offered hereby in the ordinary course of the undersigned's
business and that the undersigned has no arrangement with any person to
participate in the distribution of such Exchange Notes; (b) that it is an
Affiliate of the Issuer or of any of the initial purchasers of the debentures in
the debentures Offering and that it will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable
to it; or (c) that it is a participating broker-dealer and that it will deliver
a prospectus in connection with any resale of the Exchange Notes.
If the undersigned is a broker-dealer that will receive Exchange Notes for
its own account, it will deliver a prospectus in connection with any resale of
such Exchange Notes. By so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
The Issuer may accept the undersigned's tender by delivering written notice
of acceptance to the exchange agent. The Issuer may, in its sole discretion,
accept or reject any tender for any reason, and will have no liability to any
party as a result thereof.
All authority conferred or agreed to be conferred by this letter shall
survive the death or incapacity of the undersigned, and every obligation of the
undersigned under this letter shall be binding upon the undersigned's heirs,
personal representatives, successors and assigns.
Unless otherwise indicated under "Special Delivery Instructions" below, the
exchange agent will deliver Exchange Notes (and, if applicable, a certificate
for any debentures not tendered but represented by a certificate also
encompassing debentures which are tendered) to the undersigned at the address
set forth in Box 1.
The Exchange Offer is subject to the more detailed terms set forth in the
Prospectus and, in case of any conflict between the terms of the Prospectus and
this letter, the Prospectus shall prevail.
[_] CHECK HERE IF TENDERED DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):________________________________________________
Account Number:________________________________________________________________
Transaction Number:____________________________________________________________
[_] CHECK HERE IF TENDERED DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Owner(s):________________________________________________
Date of Execution of Notice of Guaranteed Delivery:____________________________
Window Ticket Number (if available):___________________________________________
Name of Institution which Guaranteed Delivery:_________________________________
3
<PAGE>
Please read the accompanying instructions carefully
BOX 2
PLEASE SIGN HERE
WHETHER OR NOT DEBENTURES ARE BEING
PHYSICALLY TENDERED HEREBY
This box must be signed by registered holder(s) of debentures as their
name(s) appear(s) on certificate(s) for debentures, or by person(s) authorized
to become registered holder(s) by endorsement and documents transmitted with
this letter. If signature is by a trustee, executor, administrator, guardian,
officer or other person acting in a fiduciary or representative capacity, such
person must set forth his or her full title below. (See Instruction 3)
_______________________________________________
_______________________________________________
Signature(s) of Owner(s) or Authorized
Signatory
Date ____________, 1999
Name(s)________________________________________
(Please Print)
Capacity_______________________________________
Address
_______________________________________________
_______________________________________________
_______________________________________________
(Include Zip Code)
Area Code and Telephone No.____________________
PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN
SIGNATURE GUARANTEE (SEE INSTRUCTION 3 BELOW)
CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION
_______________________________________________
(Name of Eligible Institution Guaranteeing
Signatures)
_______________________________________________
_______________________________________________
_______________________________________________
(Address (including zip code) and Telephone
Number (including area code) of Firm)
_______________________________________________
Authorized Signature
_______________________________________________
Title
_______________________________________________
Printed Name
Date: ____________, 1999
4
<PAGE>
BOX 3
TO BE COMPLETED BY ALL TENDERING HOLDERS
PAYOR'S NAME: __________
<TABLE>
<CAPTION>
Part 1 Social Security Number or
Please provide your Taxpayer Employer Identification
Identification Number in the box Number________________________
at right and certify by
signing and dating below.
<S> <C> <C>
SUBSTITUTE Part 2 [_]
Form W-9 Check the box if you are NOT subject to back-up withholding
Department of the Treasury, Internal Revenue under the provisions of Section 2406(a)(1)(C) of the Internal
Service Revenue Code because (a) you have not been notified that you
are subject to back-up withholding as a result of failure to
report all interest or dividends or (b) the Internal Revenue
Service has notified you that you are no longer subject to
back-up withholding.
Payor's Request for Taxpayer Part 3 [_]
Identification Number (TIN) Check if awaiting TIN
</TABLE>
CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION
PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE
Signature______________________________________
Date___________________________________________
Name___________________________________________
(Please Print)
5
<PAGE>
<TABLE>
<CAPTION>
BOX 4 BOX 5
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4) (See Instructions 3 and 4)
<S> <C>
To be completed ONLY if certificates for debentures in To be completed ONLY if certificates for debentures in
a principal amount not exchanged, or in the case of a principal amount not exchanged, or Exchange Notes,
debentures tendered by book-entry transfer a return are to be sent to someone other than the person whose
credit to an account maintained by Metropolitan, or signature appears in Box 2 or to an address other than
Exchange Notes, are to be issued in the name of that shown in Box 1.
someone other than the person whose signatures appear
in Box 2.
Issue and deliver: Deliver:
(check appropriate boxes) (check appropriate boxes)
[_] Amount of debentures not tendered [_] Amount of debentures not tendered
[_] Exchange Notes, to: [_] Exchange Notes, to:
(Please print or type) (Please print or type)
Name:_______________________________________________ Name:________________________________________________
Address:____________________________________________ Address:_____________________________________________
____________________________________________________ _____________________________________________________
____________________________________________________ _____________________________________________________
Please complete the Substitute Form W-9 at Box 3. Please complete the Substitute Form W-9 at Box 3.
Tax I.D. or Social Security Number: Tax I.D. or Social Security Number:
____________________________________________________ _____________________________________________________
</TABLE>
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this letter and Certificates. Certificates for debentures,
or a book-entry transfer, as the case may be, as well as a properly completed
and duly executed copy of this letter and any other documents required by this
letter, must be received by the exchange agent at its address contained herein
on or before the expiration date. The method of delivery of this letter,
certificates for debentures and any other required documents is at the election
and risk of the tendering holder, but except as otherwise provided below, the
delivery will be deemed made when actually received by the exchange agent. If
delivery is by mail, the use of registered mail with return receipt requested,
properly insured, is suggested.
We may require the tendered debentures to be endorsed or accompanied by
written instruments of transfer in form satisfactory to the Issuer and duly
executed by the registered holder and the signature on the endorsement or
instrument of transfer guaranteed by a bank, broker, dealer, credit union,
savings association, clearing agency or other institution (each an "Eligible
Institution") that is a member of a recognized signature guarantee medallion
program within the meaning of Rule 17Ad-15 under the Exchange Act. If the
Exchange Notes and/or debentures not exchanged are to be delivered to an address
other than that of the registered holder appearing on the register for the
debentures, the signature on the letter of transmittal must be guaranteed by an
Eligible Institution.
Any beneficial owner whose debentures are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender debentures should contact the holder promptly and instruct the holder
to tender debentures on the beneficial owner's behalf. If the beneficial owner
wishes to tender the debentures himself, the beneficial owner must, prior to
completing and executing the letter of transmittal and delivering the
debentures, either make appropriate arrangements to register ownership of the
debentures in the beneficial owner's name or follow the procedures described in
the immediately preceding paragraph. The transfer of record ownership may take
considerable time.
Holders whose debentures are not immediately available or who cannot
deliver their debentures, or a book-entry transfer, as the case may be, and all
other required documents to the exchange agent on or before the expiration date
may tender their debentures pursuant to the guaranteed delivery procedures set
forth in the Prospectus. Pursuant to such procedure: (a) tender must be made by
or through an Eligible Institution; (b) prior to the expiration date, the
exchange agent must have received from the Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by telegram, telex,
facsimile transmission, mail or hand delivery) (1) setting forth the name and
address of the holder, the description of the debentures and the principal
amount of debentures tendered, (2) stating that the tender is being made thereby
and (3) guaranteeing that, within five New York Stock Exchange trading days
after the date of execution of such Notice of Guaranteed Delivery, this letter
together with the certificates representing the debentures, or a book-entry
transfer, as the case may be, and any other documents required by this letter
will be deposited by the Eligible Institution with the exchange agent; and (c)
the certificates for all tendered debentures, or a book-entry transfer, as the
case may be, as well as all other documents required by this letter, must be
received by the exchange agent within five New York Stock Exchange trading days
after the date of execution of such Notice of Guaranteed Delivery, all as
provided in the Prospectus under the caption "THE EXCHANGE OFFER--How to
Tender."
The method of delivery of debentures and all other documents is at the
election and risk of the holder. If sent by mail, it is recommended that
registered mail, return receipt requested, be used, proper insurance be
obtained, and the mailing be made sufficiently in advance of the expiration date
to permit delivery to the exchange agent on or before the expiration date.
Unless an exemption applies under the applicable law and regulations
concerning "backup withholding" of federal income tax, the exchange agent will
be required to withhold, and will withhold, 31% of the gross proceeds otherwise
payable to a holder pursuant to the Exchange Offer if the holder does not
provide his or her taxpayer identification number (social security number or
employer identification number) and certify that such number is correct. Each
tendering holder should complete and sign the main signature form and the
Substitute Form W-9 included as part of the letter of transmittal, so as to
provide the information and certification necessary to avoid
7
<PAGE>
backup withholding, unless an applicable exemption exists and is proved in a
manner satisfactory to the Issuer and the exchange agent.
If a holder desires to tender debentures in the Exchange Offer and time
will not permit a letter of transmittal or debentures to reach the exchange
agent before the expiration date, a tender may be effected if the exchange agent
has received at its office listed on the back cover hereof on or prior to the
expiration date a letter, telegram or facsimile transmission from an Eligible
Institution setting forth the name and address of the tendering holder, the
principal amount of the debentures being tendered, the names in which the
debentures are registered and, if possible, the certificate numbers of the
debentures to be tendered, and stating that the tender is being made thereby and
guaranteeing that within five New York Stock Exchange trading days after the
date of execution of such letter, telegram or facsimile transmission by the
Eligible Institution, the debentures, in proper form for transfer, will be
delivered by such Eligible Institution together with a properly completed and
duly executed letter of transmittal (and any other required documents). Unless
debentures being tendered by the above-described method, or by a timely book-
entry transfer, are deposited with the exchange agent within the time period set
forth above (accompanied or preceded by a properly completed letter of
transmittal and any other required documents), the Issuer may, at its option,
reject the tender. Copies of a Notice of Guaranteed Delivery which may be used
by Eligible Institutions for the purposes described in this paragraph are
available from the exchange agent.
A tender will be deemed to have been received as of the date when the
tendering holder's properly completed and duly signed letter of transmittal
accompanied by the debentures, or by a timely book-entry transfer, is received
by the exchange agent. Issuances of Exchange Notes in exchange for debentures
tendered pursuant to a Notice of Guaranteed Delivery or letter, telegram or
facsimile transmission to similar effect (as provided above) by an Eligible
Institution will be made only against deposit of the letter of transmittal (and
any other required documents) and the tendered debentures, or by a timely book-
entry transfer.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance (including the decision of which debentures to accept
for exchange in the case of an over subscription of the offering as described in
the Prospectus) of tendered debentures will be determined by the Issuer, whose
determination will be final and binding. The Issuer reserves the absolute right
to reject any or all tenders for any reason. The Issuer also reserves the right
to waive any irregularities or conditions of tender as to particular debentures.
All tendering holders, by execution of this letter, waive any right to receive
notice of acceptance of their debentures. The Issuer's interpretation of the
terms and conditions of the Exchange Offer (including the letter of transmittal
and the instructions thereto) will be final and binding.
Neither the Issuer, the exchange agent nor any other person shall be
obligated to give notice of defects or irregularities in any tender, nor shall
any of them incur any liability for failure to give any such notice.
2. Partial Tenders. If less than the entire principal amount of any
debenture evidenced by a submitted certificate, or by a timely book-entry
transfer, is tendered, the tendering holder must fill in the principal amount
tendered in the fourth column of Box 1 above. All of the debentures represented
by a certificate delivered to the exchange agent, or by a timely book-entry
transfer, will be deemed to have been tendered unless otherwise indicated. A
certificate for debentures not tendered will be sent to the holder, unless
otherwise provided in Box 5, as soon as practicable after the expiration date,
in the event that less than the entire principal amount of debentures
represented by a submitted certificate is tendered. In the case of debentures
tendered by book-entry transfer, the non-exchanged debentures will be credited
to an account maintained by the holder with Metropolitan.
3. Signatures On This letter; Assignments; Guarantee Of Signatures. If
this letter is signed by the holder(s) of debentures tendered hereby, the
signature must correspond with the name(s) as written on the face of the
certificate(s) for such debentures, without alteration, enlargement or any
change whatsoever.
If any of the debentures tendered hereby are owned by two or more joint
owners, all owners must sign this letter. If any tendered debentures are held
in different names on several certificates, it will be necessary to complete,
sign and submit as many separate copies of this letter as there are names in
which certificates are held.
If this letter is signed by the holder of record and (a) the entire
principal amount of the holder's debentures are tendered; and/or (b) untendered
debentures, if any, are to be issued to the holder of record, then the holder of
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<PAGE>
record need not endorse any certificates for tendered debentures, nor provide a
separate bond power. In any other case, the holder of record must transmit a
separate bond power with this letter.
If this letter or any certificate or assignment is signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and proper evidence satisfactory to the
Issuer of their authority to so act must be submitted, unless waived by the
Issuer.
Signatures on this letter must be guaranteed by an Eligible Institution,
unless debentures are tendered: (a) by a holder who has not completed the Box
entitled "Special Issuance Instructions" or "Special Delivery Instructions" on
this letter; or (b) for the account of an Eligible Institution. In the event
that the signatures in this letter are required to be guaranteed, such
guarantees must be by an eligible guarantor institution which is a member of The
Securities Transfer Agents Medallion Program ("STAMP"), The New York Stock
Exchanges Medallion Signature Program ("MSP") or The Stock Exchanges Medallion
Program ("SEMP"). If debentures are registered in the name of a person other
than the signer of this letter, the debentures surrendered for exchange must be
endorsed by, or be accompanied by a written instrument or instruments of
transfer or exchange, in satisfactory form as determined by the Issuer, in its
sole discretion, duly executed by the registered holder with the signature
thereon guaranteed by an Eligible Institution.
4. Special Issuance and Delivery Instructions. Tendering holders should
indicate, in Box 4 or 5, as applicable, the name and address to which the
Exchange Notes or certificates for debentures not exchanged are to be issued or
sent, if different from the name and address of the person signing this letter.
In the case of issuance in a different name, the tax identification number of
the person named must also be indicated. Holders tendering debentures by book-
entry transfer may request debentures not exchanged be credited to the account
maintained by Metropolitan as the holder may designate.
5. Tax Identification Number. Federal income tax law requires that a
holder whose tendered debentures are accepted for exchange must provide the
exchange agent (as payor) with his or her correct taxpayer identification number
("TIN"), which, in the case of a holder who is an individual, is his or her
social security number. If the exchange agent is not provided with the correct
TIN, the holder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, delivery to the holder of the Exchange Notes pursuant to
the Exchange Offer may be subject to back-up withholding. (If withholding
results in overpayment of taxes, a refund may be obtained.) Exempt holders
(including, among others, all corporations and certain foreign individuals) are
not subject to these back-up withholding and reporting requirements. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
Under federal income tax laws, payments that may be made by the Issuer on
account of Exchange Notes issued pursuant to the Exchange Offer may be subject
to back-up withholding at a rate of 31%. In order to prevent back-up
withholding, each tendering holder must provide his or her correct TIN by
completing the "Substitute Form W-9" referred to above, certifying that the TIN
provided is correct (or that the holder is awaiting a TIN) and that: (a) the
holder has not been notified by the Internal Revenue Service that he or she is
subject to back-up withholding as a result of failure to report all interest or
dividends; (b) the Internal Revenue Service has notified the holder that he or
she is no longer subject to back-up withholding; or (c) in accordance with the
Guidelines, such holder is exempt from back-up withholding. If the debentures
are in more than one name or are not in the name of the actual owner, consult
the enclosed Guidelines for information on which TIN to report.
6. Transfer Taxes. The Issuer will pay all transfer taxes, if any,
applicable to the transfer of debentures to it or its order pursuant to the
Exchange Offer. If, however, the Exchange Notes or certificates for debentures
not exchanged are to be delivered to, or are to be issued in the name of, any
person other than the record holder, or if tendered certificates are recorded in
the name of any person other than the person signing this letter, or if a
transfer tax is imposed by any reason other than the transfer of debentures to
the Issuer or its order pursuant to the Exchange Offer, then the amount of such
transfer taxes (whether imposed on the record holder or any other person) will
be payable by the tendering holder. If satisfactory evidence of payment of
taxes or exemption from taxes is not submitted with this letter, the amount of
transfer taxes will be billed directly to the tendering holder.
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<PAGE>
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this letter.
7. Waiver of Conditions. The Issuer reserves the absolute right to amend
or waive any of the specified conditions in the Exchange Offer in the case of
any debentures tendered.
8. Mutilated, Lost, Stolen or Destroyed Certificates. Any holder whose
certificates for debentures have been mutilated, lost, stolen or destroyed
should contact the exchange agent at the address indicated above, for further
instructions.
9. Requests For Assistance or Additional Copies. Questions relating to
the procedure for tendering, as well as requests for additional copies of the
Prospectus or this letter, may be directed to the exchange agent.
IMPORTANT: THIS LETTER (TOGETHER WITH CERTIFICATES REPRESENTING TENDERED
DEBENTURES AND ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE EXCHANGE
AGENT ON OR BEFORE THE EXPIRATION DATE OF THE OFFERING, AS STATED IN THE
PROSPECTUS.
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<PAGE>
EXHIBIT 99.2
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
NOTICE OF GUARANTEED DELIVERY
of Investment Debentures Series II and III and
Installment Debentures Series I
As set forth in the Prospectus dated ____________, 1999 (the "Prospectus")
of Metropolitan Mortgage & Securities Co., Inc. (the "Issuer") and its
subsidiaries under "THE EXCHANGE OFFER--How to Tender Your Debentures" and in
the letter of transmittal for Investment Debentures Series II and III and
Installment Debentures Series I (the "letter of transmittal"), this form or one
substantially equivalent hereto must be used to tender debentures in the
exchange offer of the Issuer if: (1) certificates for the above-referenced
debentures are not immediately available, (2) time will not permit all required
documents to reach the exchange agent on or prior to the expiration date, or (3)
the procedures for book-entry transfer cannot be completed on or prior to the
expiration date. This form may be delivered by hand or transmitted by telegram,
telex, facsimile transmission or letter to the exchange agent.
To: Metropolitan Investment Securities, Inc.
BY FACSIMILE:
(509) 835-2767
CONFIRM BY TELEPHONE TO:
(509) 835-2120
_______________
VIA MAIL/HAND DELIVERY/OVERNIGHT DELIVERY:
Metropolitan Investment Securities, Inc.
Attn: Exchange Agent
601 West 1st Avenue
Spokane, Washington 99201-5015
Delivery of this instrument to an address other than as set forth above or
transmittal of this instrument to a facsimile or telex number other than as set
forth above does not constitute a valid delivery.
Ladies and Gentlemen:
The undersigned hereby tenders to the Issuer, upon the terms and conditions
set forth in the Prospectus and the letter of transmittal (which together
constitute the "Exchange Offer"), receipt of which are hereby acknowledged, the
principal amount of debentures set forth below pursuant to the guaranteed
delivery procedures described in the Prospectus and the letter of transmittal.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
November 30, 1999, unless extended by the Issuer. With respect to the Exchange
Offer, "expiration date" means the time and date or if the Exchange Offer is
extended, the latest time and date to which the Exchange Offer is so extended by
the Issuer.
<PAGE>
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
SIGNATURES
-----------------------------------------------
Signature of Owner
-----------------------------------------------
Signature of Owner (if more than one)
Dated:-----------------------------------------
Name(s):
-----------------------------------------------
-----------------------------------------------
(Please Print)
Address:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
(Include Zip Code)
Area Code and Telephone No.:
-----------------------------------------------
Capacity (full title), if signing in a
representative capacity:
-----------------------------------------------
Taxpayer Identification or Social Security No.:
-----------------------------------------------
Principal amount of debentures Exchanged:
$____________________
Certificate Nos. of debentures (if available)
-----------------------------------------------
-----------------------------------------------
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
2
<PAGE>
The undersigned, a member of a recognized signature guarantee medallion
program within the meaning of Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended, hereby guarantees (1) that the above-named person(s) own(s)
the above-described securities tendered hereby within the meaning of Rule 10b-4
under the Securities Exchange Act of 1934, (2) that such tender of the above-
described securities complies with Rule 10b-4, and (3) that delivery of such
certificates, or delivery by book-entry transfer, with delivery of a properly
completed and duly executed letter of transmittal (or facsimile thereof) and any
other required documents, is being made within five New York Stock Exchange
trading days after the date of execution of a Notice of Guaranteed Delivery of
the above-named person.
Name of Firm:
----------------------------------------------
----------------------------------------------
Number and Street or P.O. Box
----------------------------------------------
----------------------------------------------
City State Zip Code
Tel. No.______________________________________
Fax No._______________________________________
----------------------------------------------
(Authorized Signature)
----------------------------------------------
Title
Date__________________________________________
NOTE: DO NOT SEND CERTIFICATES REPRESENTING DEBENTURES WITH THIS NOTICE.
DEBENTURES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY
COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.
3
