<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 13, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MERCURY FINANCE COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-3627010
(State or other jurisdiction (I.R.S Employer
of incorporation or Identification No.)
organization)
</TABLE>
100 FIELD DRIVE, SUITE 340
LAKE FOREST, ILLINOIS 60070
(847) 295-8600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
MARK E. DAPIER, GENERAL COUNSEL
MERCURY FINANCE COMPANY
100 FIELD DRIVE, SUITE 340
LAKE FOREST, ILLINOIS 60045
(847) 295-8600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
COPIES TO:
SCOTT N. GIERKE, P.C. B. ROBBINS KIESSLING
MCDERMOTT, WILL & EMERY CRAVATH, SWAINE & MOORE
227 WEST MONROE STREET 825 EIGHTH AVENUE
CHICAGO, ILLINOIS 60606-5096 NEW YORK, NEW YORK 10019
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities.................................. $500,000,000 100% $500,000,000 $151,516
</TABLE>
(1) Estimated in accordance with Rule 457 under the Securities Act of 1933
solely for purposes of calculating the Registration Fee.
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, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 13, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
MERCURY FINANCE COMPANY
$500,000,000
DEBT SECURITIES
------------------
Mercury Finance Company (the "Company") intends to issue from time to time,
in one or more series, senior unsecured debt securities (the "Debt Securities")
with an aggregate initial offering price not to exceed $500,000,000 or the
equivalent thereof in one or more foreign currencies or composite currencies.
The Debt Securities may be offered as separate series in amounts, at prices and
on terms to be determined in light of market conditions at the time of sale and
set forth in a Prospectus Supplement or Prospectus Supplements.
The terms of each series of Debt Securities, including, where applicable,
the specific designation, aggregate principal amount, authorized denominations,
maturity, rate or rates and time or times of payment of any interest, any terms
for optional or mandatory redemption or payment of additional amounts or any
sinking fund provisions, any initial public offering price, the proceeds to the
Company and any other specific terms in connection with the offering and sale of
such series will be set forth in a Prospectus Supplement or Prospectus
Supplements. Debt Securities may be issued with amounts payable in respect of
principal, premium or interest on such Debt Securities to be determined by
reference to the value, rate or price of one or more specified indices.
The Debt Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. See "Plan
of Distribution." If any agents of the Company or any underwriters are involved
in the sale of any Debt Securities in respect of which this prospectus is
delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in the applicable Prospectus
Supplement.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY AND THEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATIONS THAT THE
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR
RESPECTIVE DATES.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices at the Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven
World Trade Center, New York, New York 10048. Copies of such material can also
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
the Company's common stock is listed on the New York Stock Exchange. Reports,
proxy statements and other information concerning the Company can be inspected
at the office of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005. The Commission maintains a Web site that contains reports, proxy
statements and other information filed by the Company at (http://www.sec.gov).
Although the Company may not be required to send a copy of its latest Annual
Report to Shareholders to holders of Debt Securities, the Company will, upon
request, send to any holder of Debt Securities a copy of its latest Annual
Report to Shareholders, as filed with the Commission, which contains financial
information that has been examined and reported upon, with an opinion expressed,
by independent certified public accountants.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
pursuant to the Exchange Act and are incorporated herein by reference and made a
part of this Prospectus:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as amended by Form 10-K/A;
(b) The Company's Quarterly Reports on Form 10-Q, as amended by Form
10-Q/A, for the quarters ended March 31, 1996 and June 30, 1996, and the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated herein by reference and made a part of this
Prospectus from the date of filing of such documents. Any statement contained in
a document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently field
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all documents incorporated herein by reference
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<PAGE>
(without exhibits other than exhibits specifically incorporated by reference).
Requests should be directed to Mercury Finance Company, 100 Field Drive, Suite
340, Lake Forest, Illinois 60045, Attention: Treasurer, Telephone: 847-295-8600.
THE COMPANY
Mercury Finance Company (the "Company") is a diversified specialty consumer
finance concern engaged in the business of purchasing individual installment
sales finance contracts from automobile dealers and retail vendors, extending
short term installment loans and, by means of an affinity program with a bank,
offering credit cards directly to customers. The Company, through its
subsidiaries, also underwrites and sells credit related insurance and other
ancillary products. Since its organization in 1983 as a wholly owned subsidiary
of First Illinois Corporation (an Illinois based bank holding company from which
Mercury was spun-off in 1989), the Company has built a substantial and
diversified consumer finance portfolio with nearly 300 offices strategically
located nationwide. Mercury's loans and finance receivables range for a duration
of 3 months to 48 months at annual interest rates usually ranging from 18% to
40%. Generally, all accounts are repayable in monthly installments. The
Company's customers represent a broad cross section of the consumer market, with
approximately 5% being military personnel. The address and telephone number of
the Company's corporate headquarters is 100 Field Drive, Suite 340, Lake Forest,
Illinois 60045, telephone number 847-295-8600.
USE OF PROCEEDS
Unless otherwise stated in a Prospectus Supplement, the Company will apply
the net proceeds from the sale of the Debt Securities to its general funds to be
used to fund investments in, or extensions of credit to, its subsidiaries; to
reduce other outstanding indebtedness (which may include indebtedness owed to
its subsidiaries); to fund possible acquisitions by the Company and its
subsidiaries of other companies. Pending such application, such net proceeds may
be temporarily invested in investment grade securities.
RATIO OF EARNINGS TO FIXED CHARGES
The Ratio of Earnings to Fixed Charges for the Company and subsidiaries for
the periods indicated below was as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------------- ------------------------------------------
1996 1995 1995 1994 1993 1992
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges....................... 3.70 4.01 3.71 4.49 4.10 3.44
<CAPTION>
1991
---------
<S> <C>
Ratio of Earnings to Fixed Charges....................... 2.82
</TABLE>
For purposes of calculating the ratio of earnings to fixed charges, earnings is
defined as income before income taxes, accounting changes and fixed charges
(excluding capitalized interest). Fixed charges include interest (whether
capitalized or expensed), amortization of debt expense and any discount or
premium relating to any indebtedness (whether capitalized or expensed) and the
portion of rent expense considered to represent interest.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of January
1, 1997 (the "Indenture") between the Company and Mellon Bank, N.A. as Trustee
(the "Trustee"), the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Debt Securities may be issued
from time to time in one or more series. The particular terms of each series, or
of Debt Securities forming a part of a series, which are offered by a Prospectus
Supplement will be described in such Prospectus Supplement.
3
<PAGE>
The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject, and are qualified in their entirety by
reference, to all the provisions of the Indenture, including the definitions
therein of certain terms and, with respect to any particular Debt Securities, to
the description of the terms thereof included in the Prospectus Supplement
relating thereto. Wherever particular Sections or defined terms of the Indenture
are referred to herein or in a Prospectus Supplement, such Sections or defined
terms are incorporated by reference herein or therein, as the case may be.
GENERAL
The Indenture provides that Debt Securities in separate series may be issued
thereunder from time to time without limitations as to aggregate principal
amount. The Company may specify a maximum aggregate principal amount for the
Debt Securities of any series. (Section 3.01) The Debt Securities are to have
such terms and provisions that are not inconsistent with the Indenture,
including terms as to maturity, principal and interest, as the Company may
determine. The Debt Securities will be unsecured obligations of the Company and
will rank on a parity with all other unsecured senior indebtedness of the
Company.
The applicable Prospectus Supplement will set forth the price or prices at
which the Debt Securities to be offered will be issued and will describe the
following terms of such Debt Securities: (i) the title of such Debt Securities;
(ii) any limit on the aggregate principal amount of the Debt Securities of the
series of which they are a part; (iii) the date or dates on which the principal
of any of such Debt Securities will be payable; (iv) the rate or rates at which
any of such Debt Securities will bear interest, if any, the date or dates from
which any such interest will accrue, the Interest Payment Dates on which any
such interest will be payable and the Regular Record Date for any such interest
payable on any Interest Payment Date; (v) the place or places where the
principal of and any premium and interest on any of such Debt Securities will be
payable; (vi) the period or periods within which, the price or prices at which
and the terms and conditions on which any of such Debt Securities may be
redeemed, in whole or in part, at the option of the Company, (vii) the
obligation, if any, of the Company to redeem or purchase any of such Debt
Securities pursuant to any sinking fund or analogous provision or at the option
of the Holder thereof, and the period or periods within which, the price or
prices at which and the terms and conditions on which any of such Debt
Securities will be redeemed or purchased, in whole or in part, pursuant to any
such obligation; (viii) the denominations in which any of such Debt Securities
will be issuable, if other than denominations of $1,000 and any integral
multiple thereof; (ix) if the amount of principal of or any premium or interest
on any of such Debt Securities may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined, (x)
if other than the currency of the United States of America, the currency,
currencies or currency units in which the principal of or any premium or
interest on any of such Debt Securities will be payable (and the manner in which
the equivalent of the principal amount thereof in the currency of the United
States of America is to be determined for any purpose, including for the purpose
of determining the principal amount deemed to be Outstanding at any time); (xi)
if the principal of or any premium or interest on any of such Debt Securities is
to be payable, at the election of the Company or the Holder thereof, in one or
more currencies or currency units other than those in which such Debt Securities
are stated to be payable, the currency, currencies or currency units in which
payment of any such amount as to which such election is made will be payable,
the periods within which and the terms and conditions upon which such election
is to be made and the amount so payable (or the manner in which such amount is
to be determined); (xii) if other than the entire principal amount thereof, the
portion of the principal amount of any of such Debt Securities which will be
payable upon declaration of acceleration of the Maturity thereof, (xiii) if the
principal amount payable at the Stated Maturity of any of such Debt Securities
will not be determinable as of any one or more dates prior to the Stated
Maturity, the amount which will be deemed to be such principal amount as of any
such date for any purpose, including the principal amount thereof which will be
due and payable upon any Maturity other than the Stated Maturity or which will
be deemed to be Outstanding as of any such date (or, in any such case, the
manner in which such deemed principal amount is to be determined); (xiv) if
applicable, that such Debt Securities, in whole or any specified part, are
defeasible pursuant to the provisions of the Indenture
4
<PAGE>
described under "Defeasance and Covenant Defeasance--Defeasance and Discharge"
or "Defeasance and Covenant Defeasance--Defeasance of Certain Covenants" herein,
or under both such captions; (xv) whether any of such Debt Securities will be
issuable in whole or in part in the form of one or more Global Debt Securities
and, if so, the respective Depositaries for such Global Securities, the form of
any legend or legends to be borne by any such Global Security in addition to or
in lieu of the legend referred to under "Form, Exchange and Transfer--Global
Securities" and, if different from those described under such caption, any
circumstances under which any such Global Security may be exchanged in whole or
in part for Debt Securities registered, and any transfer of such Global Security
in whole or in part may be registered, in the names of Persons other than the
Depositary for such Global Security or its nominee; (xvi) any addition to or
change in the Events of Default applicable to any of such Debt Securities and
any change in the right of the Trustee or the Holders to declare the principal
amount of any of such Debt Securities due and payable; (xvii) any addition to or
change in the covenants in the Indenture described under "Covenants of the
Company" herein applicable to any of such Debt Securities; and (xviii) any other
terms of such Debt Securities not inconsistent with the provisions of the
Indenture. (Section 3.01)
Securities, including Original Issue Discount Securities, may be sold at a
substantial discount below their principal amount. Certain special United States
federal income tax considerations (if any) applicable to Debt Securities sold at
any original issue discount may be described in the applicable Prospectus
Supplement. In addition, certain special United States federal income tax or
other considerations (if any) applicable to any Debt Securities that are
denominated in a currency or currency unit other than United States dollars may
be described in the applicable Prospectus Supplement.
FORM, EXCHANGE AND TRANSFER
The Debt Securities of each series will be issuable only in registered form,
without coupons and, unless otherwise specified in the applicable Prospectus
Supplement, only in denominations of $1,000 and integral multiples thereof.
(Section 3.02)
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Securities, Debt Securities of each series will
be exchangeable for other Debt Securities of the same series of any authorized
denomination and of a like tenor and aggregate principal amount. (Section 3.05)
Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or with the form of
transfer endorsed thereon duly executed) at the office of the Security Registrar
or at the office of any Transfer Agent designated by the Company for such
purpose. No service charge will be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Such transfer or exchange will be effected upon the Security
Registrar or such Transfer Agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
has appointed the Trustee as Security Registrar. (Section 3.05) The Company may
at any time designate additional transfer agents or rescind the designation of
any transfer agent or approve a change in the office through which any transfer
agent acts, except that the Company will be required to maintain a transfer
agent in each Place of Payment for the Debt Securities of each series. (Section
10.02)
If the Debt Securities of any series (or of any series and specified terms)
are to be redeemed in part, the Company will not be required to (i) issue,
register the transfer of or exchange any Debt Security of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of mailing of a notice of
redemption of any such Debt Security that may be selected for redemption and
ending at the close of business on the day of such mailing or (ii) register the
transfer of or exchange any Debt Security so selected for redemption, in whole
or in part, except the unredeemed portion of any Debt Security being redeemed in
part. (Section 3.05)
5
<PAGE>
GLOBAL SECURITIES
Unless otherwise specified in the applicable Prospectus Supplement, the Debt
Securities of any series will be issued in the form of one or more fully
registered certificates registered in the name of Cede & Co., the nominee of The
Depository Trust Company (the "Depository"). Except as provided below, owners of
beneficial interests in the certificates for the Debt Securities registered in
the name of the Depository ("Global Securities") will not be entitled to have
the Global Securities registered in their names and will not receive or be
entitled to receive physical delivery of the Global Securities in definitive
form. Unless and until definitive Debt Securities are issued to owners of
beneficial interests in the Global Securities, such owners of beneficial
interests will not be recognized as Holders of the Debt Securities by the
Trustee. Hence, until such time, owners of beneficial interests in the Global
Securities will only be able to exercise the rights of Holders indirectly
through the Depository and its participating organizations. Except as set forth
below, the certificates may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
nominee to a successor or the Depository or a nominee of such successor.
The Depository has advised the Company that it is a limited-purpose trust
Company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
The Depository was created to hold securities for its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depository's participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations and certain other organizations, some of which (and/or
their representatives) own the Depository. Access to the Depository's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. Persons who are not participants may
beneficially own securities held by the Depository only through participants.
The Depository advises that pursuant to procedures established by it (i)
upon the issuance of the Debt Securities by the Company, the Depository will
credit the accounts of participants designated by the Underwriters with the
amount of the Global Securities purchased by the Underwriters, and (ii)
ownership of beneficial interests in the certificates representing the Global
Securities will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depository (with respect to
participants' interests) and the participants and the indirect participants
(with respect to beneficial owners' interests). The laws of some states require
that certain persons take physical delivery in definitive form of securities
which they own. Consequently, the ability to transfer beneficial interests in
such certificates is limited to such extent.
Neither the Company, the Trustee, any Payment Agent, nor 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 in the certificates representing the Global Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Principal and interest payments on the Global Securities registered in the
name of the Depository's nominee will be made by the Trustee to the Depository's
nominee as the registered owner of the certificates relating to the Global
Securities. The Indenture provides that the Company and the Trustee will treat
the persons in whose names the Global Securities are registered (the Depository
or its nominee) as the owners of the Global Securities for the purpose of
receiving payment of principal and interest on the Global Securities and for all
other purposes whatsoever. Therefore, neither the Company, the Trustee nor any
Paying Agent has any direct responsibility or liability for the payment of
principal or interest on the Global Securities to owners of beneficial interests
in the certificates relating to the Global Securities. The
6
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Depository has advised the Company and the Trustee that its present practice is,
upon receipt of any payment of principal or interest, to immediately credit the
accounts of the participants with such payment in amounts proportionate to their
respective holdings in principal amount of beneficial interests in the
certificates relating to the Global Securities, as shown on the records of the
Depository. Payments by participants and indirect participants to owners of
beneficial interests in the certificates relating to the Global Securities will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of the participants or indirect
participants.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by the Company, the
Company will issue Debt Securities in definitive form in exchange for the total
amount of the certificates representing the Global Securities. In addition, the
Company may at any time determine not to have Debt Securities represented by
Global Securities, and, in such event, the Company will issue Debt Securities in
definitive form in exchange for the total amount of the certificates
representing the Global Securities. In addition, if any event shall have
happened and be continuing that constitutes an Event of Default with respect to
the Debt Securities, the owners of beneficial interests in certificates for the
Global Securities will be entitled to receive Debt Securities in certificated
form in exchange for the Global Securities representing the Debt Securities. In
any such instance, an owner of a beneficial interest in such certificates will
be entitled to physical delivery in definitive form of Debt Securities equal in
amount to such beneficial interest and to have such Debt Securities registered
in its name.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
Person in whose name such Debt Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest. (Section 3.07)
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
the Company may designate for such purpose from time to time, except that at the
option of the Company payment of any interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the Security
Register. Unless otherwise indicated in the applicable Prospectus Supplement,
the corporate trust office of the Trustee in The City of New York will be
designated as the Company's sole Paying Agent for payments with respect to Debt
Securities of each series. Any other Paying Agents initially designated by the
Company for the Debt Securities of a particular series will be named in the
applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
the Company will be required to maintain a Paying Agent in each Place of Payment
for the Debt Securities of a particular series. (Section 10.02)
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest has
become due and payable will be repaid to the Company, and the Holder of such
Debt Security thereafter may look only to the Company for payment thereof.
(Section 10.03)
CERTAIN COVENANTS OF THE COMPANY
LIMITATION ON SECURED INDEBTEDNESS
The Company will not create, assume, incur or guarantee, and will not permit
any Restricted Subsidiary to create, assume, incur or guarantee, any Secured
Indebtedness without making provision whereby all the Debt Securities shall be
secured equally and ratably with (or prior to) such Secured
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Indebtedness (together with, if the Company shall so determine, any other
Indebtedness of the Company or such Restricted Subsidiary then existing or
thereafter created which is not subordinate to the Debt Securities) so long as
such Secured Indebtedness shall be outstanding unless such Secured Indebtedness,
when added to (i) the aggregate amount of all Secured Indebtedness then
outstanding (not including in this computation Secured Indebtedness if the Debt
Securities are secured equally and ratably with (or prior to) such Secured
Indebtedness and further not including in this computation any Secured
Indebtedness which is concurrently being retired and (ii) the aggregate amount
of all Attributable Debt then outstanding pursuant to Sale and Leaseback
Transactions entered into by the Company after January 1, 1997, or entered into
by a Restricted Subsidiary after January 1, 1997 or, if later, the date on which
it became a Restricted Subsidiary (not including in this computation any
Attributable Debt which is concurrently being retired), would not exceed 5% of
the Company's total assets. In addition, the Company may create, assume, incur
or guarantee Secured Indebtedness, in an aggregate amount at any one time
outstanding not exceeding 20% of its finance receivables, in connection with one
or more Securitizations. (Section 10.06)
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any Sale and Leaseback Transaction unless (i) the sum of (a) the
Attributable Debt to be outstanding pursuant to such Sale and Leaseback
Transaction, (b) all Attributable Debt then outstanding pursuant to all other
Sale and Leaseback Transactions entered into by the Company after January 1,
1997, or entered into by a Restricted Subsidiary after January 1, 1997 or, if
later, the date on which it became a Restricted Subsidiary, and (c) the
aggregate of all Secured Indebtedness then outstanding (not including in this
computation Secured Indebtedness if the Debt Securities are secured equally and
ratably with (or prior to) such Secured Indebtedness and any Secured
indebtedness issued in connection with one or more Securitizations as permitted
by Section 10.06 of the Indenture) would not exceed 5% of the Company's total
assets or (ii) an amount equal to the greater of (a) the net proceeds to the
Company or the Restricted Subsidiary of the sale of the Principal Property sold
and leased back pursuant to such Sale and Leaseback Transaction and (b) the
amount of Attributable Debt to be outstanding pursuant to such Sale and
Leaseback Transaction is applied to the retirement of Funded Debt of the Company
or any Restricted Subsidiaries (other than Funded Debt which is subordinate to
the Debt Securities or which is owing to the Company or any Restricted
Subsidiaries) within 180 days after the consummation of such Sale and Leaseback
Transaction. (Section 10.07)
DEFINITIONS OF CERTAIN TERMS
"ATTRIBUTABLE DEBT" means, as of the date of its determination, the present
value (discounted semiannually at an interest rate of 7.0% per annum) of the
obligation of a lessee for rental payments pursuant to any Sale and Leaseback
Transaction (reduced by the amount of the rental obligations of any sublessee of
all or part of the same property) during the remaining term of such Sale and
Leaseback Transaction (including any period for which the lease relating thereto
has been extended), such rental payments not to include amounts payable by the
lessee for maintenance and repairs, insurance, taxes, assessments and similar
charges and for contingent rents (such as those based on sales). In the case of
any Sale and Leaseback Transaction in which the lease is terminable by the
lessee upon the payment of a penalty, such rental payments shall be considered
for purposes of this definition to be the lesser of (i) the rental payments to
be paid under such Sale and Leaseback Transaction until the first date (after
the date of such determination) upon which it may be so terminated plus the then
applicable penalty upon such termination and (ii) the rental payments required
to be paid during the remaining term of such Sale and Leaseback Transaction
(assuming such termination provision is not exercised).
"BOARD OF DIRECTORS" means either the board of directors of the Company or
committee of that board duly authorized to act for it in respect of the
Indenture.
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"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.
"CAPITALIZED LEASE OBLIGATION" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) real or
personal property that is required to be classified and accounted for as a
capital lease obligation under generally accepted accounting principles and, for
the purposes hereof, the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with such
principles.
"CONSOLIDATED NET TANGIBLE ASSETS" means at any date, the total assets
appearing on the most recently prepared consolidated balance sheet of the
Company and the Subsidiaries as of the end of a fiscal quarter of the Company,
prepared in accordance with generally accepted accounting principles, less (i)
all current liabilities as shown on such balance sheet and (ii) Intangible
Assets.
"FINANCE BUSINESS" means (i) the small loan, personal finance, consumer
finance or installment credit business (including the business of making
collateral loans secured by credit obligations or personal property), (ii) the
sales finance business and the business of purchasing notes and accounts
receivable (whether or not repayable in installments), (iii) the commercial
financing and factoring business as generally conducted in connection with any
business of the character referred to in the foregoing clauses (i), (ii) and
(iii) other than insurance underwriting.
"FINANCE-RELATED INSURANCE BUSINESS" means the business of (i) insuring
articles and merchandise the sale or leasing of which is financed in the
ordinary course of the Finance Business, and (ii) insuring the lives of
individuals who are liable for the payment of the amounts owing on such sales or
leases and writing accident and health insurance on such individuals; provided,
however, that Financed-Related Insurance Business shall also include other
insurance business that is not described in (i) or (ii) above to the extent that
such insurance business (A) consists of the offering of lines of insurance that
are comparable to those offered by insurance subsidiaries of major United States
motor vehicle companies and (B) does not produce at any time aggregate premiums
written (net of reinsurance ceded) by all Subsidiaries in an amount greater that
50% of the aggregate amount of all premiums written (net of reinsurance ceded)
at such time in all of the insurance business of such Subsidiaries.
"FUNDED DEBT" means any Indebtedness (other than Indebtedness as set forth
in clause (ii) of the definition thereof) maturing by its terms more than one
year from the date of the issuance thereof, including any Indebtedness renewable
or extendable at the option of the obligor to a date later than one year from
the date of the original issuance thereof.
"INDEBTEDNESS" means (i) any liability of any Person (a) for borrowed money,
or under any reimbursement obligation relating to a letter of credit, or (b)
evidenced by a bond, note, debenture or similar instrument (including a purchase
money obligation) given in connection with the acquisition of any business,
properties or assets of any kind or with services incurred in connection with
capital expenditures (other than a trade payable or a current liability arising
in the ordinary course of business), or (c) for the payment of money relating to
a Capitalized Lease Obligation, or (d) for Interest Rate Protection Obligations;
(ii) any liability of others described in the preceding clause (i) that the
Person has guaranteed or that is otherwise its legal liability; and (iii) any
amendment, supplement, modification, deferral, renewal, extension or refunding
of any liability of the types referred to in clauses (i) and (ii) above.
"INTANGIBLE ASSETS" means the value (net of any applicable reserves), as
shown on or reflected in such balance sheet, of: (i) all trade names,
trademarks, licenses, patents, copyrights and goodwill; (ii) organizational and
development costs; (iii) deferred charges (other than prepaid items such as
insurance, taxes, interest, commissions, rents and similar items and tangible
assets being amortized); and (iv) unamortized debt discount and expense, less
unamortized premium.
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"INTEREST RATE PROTECTION OBLIGATIONS" of any Person means the obligations
of such Person pursuant to any arrangement with any other Person whereby,
directly or indirectly, such Person is entitled to receive from time to time
periodic payments calculated by applying a fixed rate of interest on a stated
notional amount in exchange for periodic payments made by such Person calculated
by applying a floating rate of interest on the same notional amount.
"LIENS" means any mortgage, lien, pledge, security interest, charge or
encumbrance.
"PERSON" means any individual, corporation, partnership, limited liability
company or partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity.
"PRINCIPAL PROPERTY" means any land, land improvements, buildings and
associated factory, distribution, laboratory and office equipment (excluding any
products marketed by the Company or any Subsidiary) constituting a distribution
facility, operating facility, manufacturing facility, development facility,
warehouse facility, service facility or office facility (including any portion
thereof), which facility (a) is owned by or leased to the Company or any
Restricted Subsidiary, (b) is located within the United States and (c) has an
acquisition cost plus capitalized improvements in excess of 0.50% of
Consolidated Net Tangible Assets as of the date of such determination, other
than (i) any such facility, or portion thereof, which has been financed by
obligations issued by or on behalf of a State, a Territory or a possession of
the United States, or any political subdivision of any of the foregoing, or the
District of Columbia, the interest on which is excludable from gross income of
the holders thereof (other than a "substantial user" of such facility or a
"related Person" as those terms are used in Section 103 of the Internal Revenue
Code of 1986, as amended (the "Code")) pursuant to the provisions of Section 103
of the Code (or any similar provision hereafter enacted) as in effect at the
time of issuance of such obligations, (ii) any such facility that the Board of
Directors may by Board Resolution declare is not of material importance to the
Company and the Restricted Subsidiaries taken as a whole and (iii) any such
facility, or portion thereof, owned or leased jointly or in common with one or
more Persons other than the Company and any Subsidiary and in which the interest
of the Company and all Restricted Subsidiaries does not exceed 50%.
"RESTRICTED SECURITIES" means any shares of the capital stock or
Indebtedness of any Restricted Subsidiary.
"RESTRICTED SUBSIDIARY" means any Subsidiary engaged in the Finance Business
or Finance-Related Insurance Business, other than a Subsidiary which either (i)
is organized under the laws of any jurisdiction outside the United States of
America, Puerto Rico or Canada, or (ii) conducts a major portion of its business
outside the United States of America, Puerto Rico or Canada.
"SALE AND LEASEBACK TRANSACTION" means any arrangement with any Person
providing for the leasing by the Company or any Restricted Subsidiary of any
Principal Property (whether such Principal Property is now owned or hereafter
acquired) that has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such Person, other than (i) temporary leases for a
term, including renewals at the option of the lessee, of not more than three
years; (ii) leases between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries, and (iii) leases of Principal Property executed by the
time of, or within 180 days after the latest of, the acquisition, the completion
of construction or improvement (including any improvements on property which
will result in such property becoming Principal Property), or the commencement
of commercial operation of such Principal Property.
"SECURED INDEBTEDNESS" means (i) Indebtedness of the Company or a Restricted
Subsidiary which is secured by any Lien upon any of its assets and (ii)
Indebtedness of the Company or a Restricted Subsidiary
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in respect of any conditional sale or other title retention agreement covering
any of its assets; but "Secured Indebtedness" shall not include any of the
following:
(a) Indebtedness of the Company and the Restricted Subsidiaries
outstanding on January 1, 1997, secured by then existing Liens upon, or
incurred in connection with conditional sales agreements or other title
retention agreements with respect to any of its assets;
(b) Indebtedness which is secured by (1) purchase money Liens upon any
assets acquired after January 1, 1997 or (2) Liens placed on any assets
after January 1, 1997, during construction or improvement thereof (including
any improvements on any asset) or placed thereon within 180 days after the
later of acquisition, completion of construction or improvement or the
commencement of commercial operation of such asset or improvement, or (3)
conditional sale agreements or other title retention agreements with respect
to any assets acquired after January 1, 1997, if (in each case referred to
in this subparagraph (b)) (x) such Lien or agreement secures all or any part
of the Indebtedness incurred for the purpose of financing all or any part of
the purchase price and (y) such Lien or agreement does not extend to assets
other than the assets so acquired; provided, however, that the amount by
which the aggregate principal amount of Indebtedness secured by any such
Lien or agreement exceeds the cost to the Company or such Restricted
Subsidiary of the related assets shall be considered to be "Secured
Indebtedness";
(c) Indebtedness which is secured by Liens on any assets, which Liens
exist at the time of acquisition (by any manner whatsoever) of such assets
by the Company or a Restricted Subsidiary;
(d) Indebtedness of Restricted Subsidiaries owing to the Company or any
other Restricted Subsidiary and Indebtedness of the Company owing to any
Restricted Subsidiary;
(e) In the case of any corporation which becomes (by any manner
whatsoever) a Restricted Subsidiary after January 1, 1997, Indebtedness
which is secured by Liens upon, or conditional sale agreements or other
title retention agreements with respect to, its assets, which Liens exist at
the time such corporation becomes a Restricted Subsidiary;
(f) Guarantees by the Company of Secured Indebtedness and Attributable
Debt of any Restricted Subsidiaries and guarantees by a Restricted
Subsidiary of Secured Indebtedness and Attributable Debt of the Company and
any other Restricted Subsidiaries;
(g) Attributable Debt arising from any Sale and Leaseback Transaction;
(h) Indebtedness secured by Liens on assets of the Company or a
Restricted Subsidiary in favor of the United States of America, any State,
Territory or possession thereof, or the District of Columbia, or any
department, agency or instrumentality or political subdivision of the United
States of America or any State, Territory or possession thereof, or the
District of Columbia, or in favor of any other country or any political
subdivisions thereof, if such Indebtedness was incurred for the purpose of
financing all or any part of the purchase price or the cost of construction
of the property subject to such Lien; provided, however, that the amount by
which the aggregate principal amount of Indebtedness secured by any such
Lien exceeds the cost to the Company or such Restricted Subsidiary of the
related acquisition or construction shall be considered to be "Secured
Indebtedness" to the extent of such excess;
(i) Indebtedness secured by Liens on aircraft, airframes or aircraft
engines, aeronautic equipment or computers and electronic data processing
equipment; and
(j) The replacement, extension or renewal (or successive replacements,
extension or renewals) of any Indebtedness (in whole or in part) excluded
from the definition of "Secured Indebtedness" by subparagraphs (a) through
(i) above; provided, however, that no Lien securing, or conditional sale or
title retention agreement with respect to, such Indebtedness shall extend to
or cover any assets, other
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than such assets which secured the Indebtedness so replaced, extended or
renewed (plus improvements on or to any such assets); provided further,
however, that to the extent that such replacement, extension or renewal
increases the principal amount of Indebtedness secured by such Lien or is in
a principal amount in excess of the principal amount of Indebtedness
excluded from the definition of "Secured Indebtedness" by subparagraphs (a)
through (i) above, the amount of such increase or excess shall be considered
to be "Secured Indebtedness."
In no event shall the foregoing provisions be interpreted to mean or their
operation to cause the same Indebtedness to be included more than once in the
calculation of "Secured Indebtedness" as that term is used in the Indenture.
"SECURITIZATION" means the transfer or pledge of assets or interests in
assets to a trust, partnership, corporation or other entity, which transfer or
pledge is funded by such entity in whole or in part by the issuance of
instruments or securities that are paid principally from the cash flow derived
from such assets or interests in assets.
"SUBSIDIARY" means any corporation of which, at the time of determination,
the Company and/or one or more Subsidiaries owns or controls directly or
indirectly more than 50% of the shares of Voting Stock.
"VOTING STOCK," when used with reference to a Subsidiary, means stock of the
class or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of
such corporation provided that, for the purposes hereof, stock which carries
only the right to vote conditionally on the happening of an event shall not be
considered voting stock whether or not such event shall have happened.
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may, without the
consent of any Holders of Debt Securities, enter into supplemental indentures
for the purposes, among other things, of adding to the Company's covenants,
adding additional Events of Default, establishing the form or terms of Debt
Securities or curing ambiguities or inconsistencies in the Indenture or making
other provisions, provided that any such action shall not adversely affect the
interests of the Holders of any outstanding series of Debt Securities in any
material respect. (Section 9.01)
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in aggregate principal
amount of the outstanding Debt Securities of each series affected thereby,
except that no such modification or amendment may, without the consent of the
Holder of each outstanding Debt Security affected thereby, (i) change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any Debt Security, (ii) reduce the principal amount of, rate of interest on, any
premium payable upon the redemption of or the amount of the principal of an
Original Issue Discount Security or any other Debt Security which would be due
and payable upon a declaration of acceleration of the Maturity thereof upon the
occurrence of an Event of Default, of any Debt Security, (iii) change the place
of payment or the coin or currency in which any Debt Security or interest
thereon is payable, (iv) impair the right to institute suit for the enforcement
of any payment on or with respect to any Debt Security, (v) reduce the
percentage in principal amount of Debt Securities, the consent of whose Holders
is required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults, or (vi) modify the requirements contained in the Indenture for consent
to or approval of certain matters except to increase any percentage for such
consent or approval or to provide that certain other provisions cannot be
modified or waived without the consent of the Holder of each Debt Security
affected thereby. (Section 9.02)
A supplemental indenture which changes or eliminates any covenant or other
provisions of the Indenture which has been expressly included solely for the
benefit of one or more particular series of Debt
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Securities, or which modifies the rights of the Holders of Debt Securities of
such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under the Indenture of the Holders of Debt Securities
of any other series.
The Holders of a majority in aggregate principal amount of the outstanding
Debt Securities of a series may, on behalf of the Holders of all the Debt
Securities of such series, waive compliance by the Company with certain
restrictive provisions of the Indenture. (Section 10.10)
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (i) default in the payment
of any interest on the Debt Securities of that series when due, and the
continuance of such default for a period of 30 days; (ii) default in the payment
of the principal of or any premium on the Debt Securities of that series at the
date on which such principal becomes due and payable as provided in the Debt
Security or in the Indenture, whether at the Stated Maturity or by declaration
of acceleration, call for redemption or otherwise; (iii) default in the deposit
of any sinking fund payment, when and as due on the Debt Securities of that
series; (iv) default in the performance or breach of any covenant or warranty of
the Company under the Indenture (other than a covenant or warranty a default in
performance or breach of which is specifically dealt with in the Indenture) and
the continuance of such default or breach for a period of 60 days after written
notice as provided in the Indenture; (v) default in the payment of amounts due
under certain other evidences of Indebtedness in excess of $20,000,000; or (vi)
certain events involving bankruptcy, insolvency or reorganization. (Section
5.01)
The Indenture provides that if an Event of Default specified therein shall
occur and be continuing with respect to the Debt Securities of any series, other
than an Event of Default involving bankruptcy, insolvency or reorganization,
either the Trustee or the Holders of 25% in principal amount of the outstanding
Debt Securities of that series (each series acting as a separate class) may
declare the principal of the Debt Securities of that series to be due and
payable. (Section 5.02) If an Event of Default described in clause (vi) above
with respect to the Debt Securities of any series at the time outstanding shall
occur, the principal amount of all of that series (or, in the case of any such
Original Issue Discount Security, such specified amount) will automatically, and
without any action by the Trustee or any Holder, become immediately due and
payable. The Holders of a majority in aggregate principal amount of the Debt
Securities of a series may, on behalf of all Holders of Debt Securities of such
series, waive any past default under the Indenture with respect to the Debt
Securities of such series, except a default (a) in the payment of principal of,
or any premium or interest on, any Debt Security of such series, and (b) in
respect of a covenant or provision of the Indenture which cannot be modified or
amended without the consent of the Holder of each outstanding Debt Security of
the affected series. (Section 5.13)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or discretion of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Section 6.03)
Subject to such provisions for the indemnification of the Trustee, the Holders
of a majority in aggregate principal amount of the Outstanding Debt Securities
of any series will have the right to direct the time, method and place of
conducting and proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the Trustee with respect to the Debt Securities
of that series. (Section 5.12)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of that series, (ii) the Holders
of at least 25% in aggregate principal amount of the Outstanding Debt Securities
of that series have made written request to the Trustee to
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institute such proceeding as trustee, (iii) the Holder or Holders have offered
to the Trustee reasonable indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request, (iv) the Trustee has failed to
institute such proceeding, and has not received from the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of that series
a direction inconsistent with such request, within 60 days after such notice,
request and offer. (Section 5.07) However, such limitations do not apply to a
suit instituted by a Holder of a Debt Security for the enforcement of payment of
the principal of or any premium or interest on such Security on or after the
applicable due date specified in such Security. (Section 5.08)
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to their knowledge,
is in default in the performance or observance of any of the terms, provisions,
and conditions of the Indenture and, if so, specifying all such known defaults.
(Section 10.04)
DEFEASANCE AND COVENANT DEFEASANCE
If and to the extent indicated in the applicable Prospectus Supplement, the
Company may elect, at its option at any time, to have the provisions of Section
13.02 of the Indenture, relating to defeasance and discharge of indebtedness, or
Section 13.03 of the Indenture, relating to defeasance of certain restrictive
covenants in the Indenture, applied to the Debt Securities of any series, or to
any specified part of a series. (Section 13.01)
DEFEASANCE AND DISCHARGE
The Indenture provides that, upon the Company's exercise of its option to
have Section 13.02 of the Indenture apply to any Debt Securities, the Company
will be discharged from all its obligations with respect to such Debt Securities
(except for certain obligations to exchange or register the transfer of Debt
Securities to replace stolen, lost or mutilated Debt Securities, to maintain
paying agencies and to hold moneys for payment in trust) upon the deposit in
trust for the benefit of the Holders of such Debt Securities of money or U.S.
Government Obligations, or both, which, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an amount sufficient to pay the principal of and any premium and interest on
such Debt Securities on the respective Stated Maturities in accordance with the
terms of the Indenture and such Debt Securities. Such defeasance may occur only
if, among other things, the Company has delivered to the Trustee an Opinion of
Counsel to the effect that the Company has received from, or there has been
published by, the United States Internal Revenue Service a ruling, or there has
been a change in tax law, in either case to the effect that Holders of such Debt
Securities will not recognize gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and certain obligations to
exchange or register the transfer of Debt Securities, to replace stolen, lost or
mutilated Debt Securities, to maintain paying agencies and to hold moneys for
payment in trust) upon the deposit in trust for the benefit of the Holders of
such Debt Securities of money or U.S. Government Obligations, or both, which,
through the payment of principal and interest in respect thereof in accordance
with their terms, will provide money in an amount sufficient to pay the
principal of and any premium and interest on such Debt Securities on the
respective Stated Maturities in accordance with the terms of the Indenture and
such Debt Securities. Such defeasance or discharge may occur only if, among
other things, the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the Company has received from, or there has been published by,
the United States Internal Revenue Service a ruling, or there has been a change
in tax law, in either case to the effect that Holders of such Debt Securities
will not recognize gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal income tax
on the same amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge were not to occur. (Sections
13.02 and 13.04)
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DEFEASANCE OF CERTAIN COVENANTS
The Indenture provides that, upon the Company's exercise of its option to
have Section 13.03 of the Indenture apply to any Debt Securities, the Company
may omit to comply with certain restrictive covenants, including those described
under "Certain Covenants of the Company," that may be described in the
applicable Prospectus Supplement, and the occurrence of certain Events of
Default, which are described above in clause (iv) (with respect to such
restrictive covenants) and under "Events of Default" and any that may be
described in the applicable Prospectus Supplement, will be deemed not to be or
result in an Event of Default, in each case with respect to such Debt
Securities. The Company, in order to exercise such option, will be required to
deposit, in trust for the benefit of the Holders of such Debt Securities, money
or U.S. Government Obligations, or both, which, through the payment of principal
and interest in respect thereof in accordance with their terms, will provide
money in an amount sufficient to pay the principal of and any premium and
interest on such Debt Securities on the respective Stated Maturities in
accordance with the terms of the Indenture and such Debt Securities. The Company
will also be required, among other things, to deliver to the Trustee an Opinion
of Counsel to the effect that Holders of such Debt Securities will not recognize
gain or loss for federal income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been the
case if such deposit and defeasance were not to occur. In the event the Company
exercised this option with respect to any Debt Securities and such Debt
Securities were declared due and payable because of the occurrence of any Event
of Default, the amount of money and U.S. Government Obligations so deposited in
trust would be sufficient to pay amounts due on such Debt Securities at the time
of their respective Stated Maturities but may not be sufficient to pay amounts
due on such Debt Securities upon any acceleration resulting from such Event of
Default. In such case, the Company would remain liable for such payments.
(Sections 13.03 and 13.04)
NOTICES
Notices to Holders of Debt Securities will be given by mail to the addresses
of such Holders as they may appear in the Security Register. (Section 1.06)
TITLE
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name a Debt Security is registered as the absolute
owner thereof (whether or not such Debt Security may be overdue) for the purpose
of making payment and for all other purposes. (Section 3.08)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the law of the State of New York. (Section 1.12)
REGARDING THE TRUSTEE
Mellon Bank, N.A. is the Trustee under the Indenture. The Company has other
customary banking relationships with Mellon Bank, N.A. in the ordinary course of
business.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to one or more underwriters for public
offering and sale by them or may sell Debt Securities to investors directly or
through agents. Any such underwriter or agent involved in the offer and sale of
the Debt Securities (the "Offered Debt Securities") will be named in an
applicable Prospectus Supplement.
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Underwriters may offer and sell the Offered Debt Securities at a fixed price
or prices, which may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Company also may offer and sell the Offered
Debt Securities in exchange for one or more of its outstanding issues of debt or
convertible debt securities. The Company also may, from time to time, authorize
underwriters acting as the Company's agents to offer and sell the Offered Debt
Securities upon the terms and conditions as shall be set forth in any Prospectus
Supplement. In connection with the sale of Offered Debt Securities, underwriters
may be deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Offered Debt Securities for whom they may act as agent.
Underwriters may sell Offered Debt Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be changed from
time to time) from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Debt Securities may
be deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Offered Debt Securities may be
deemed to be underwriting discounts and commissions, under the Act.
Underwriters, dealers and agents may be entitled, under agreements with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by the Company for certain expenses.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Offered Debt Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the date
or dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of Offered Debt
Securities sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in such Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases by subject
to the approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Offered Debt Securities covered
by its Contracts shall not at the time of delivery be prohibited under the laws
of any jurisdiction in the United States to which such institution is subject,
and (ii) if the Offered Debt Securities are being sold to underwriters, the
Company shall have sold to such underwriters the total principal amount of the
Offered Debt Securities less the principal amount thereof covered by Contracts.
Agents and underwriters will have no responsibility in respect of the delivery
or performance of Contracts.
All Offered Debt Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Offered Debt Securities are
sold by the Company for public offering and sale may make a market in such
Offered Debt Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of or the trading markets for any Offered Debt
Securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
16
<PAGE>
VALIDITY OF OFFERED DEBT SECURITIES
The validity of the Offered Debt Securities will be passed upon for the
Company by McDermott, Will & Emery, Chicago, Illinois. Certain legal matters in
connection with any Offered Debt Securities will be passed upon for any
underwriters or agents by Cravath, Swaine & Moore, New York, New York.
EXPERTS
The consolidated financial statements of Mercury Finance Company as of
December 31, 1995 and 1994, and for each of the years in the three year period
ended December 31, 1995, have been incorporated by reference from the Annual
Report on Form 10-K, as amended by Form 10-K/A for the fiscal year ended
December 31, 1995, in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein and
upon the authority of such firm as experts in accounting and auditing.
17
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities covered hereby, other than underwriting and other discounts and
commissions, are, subject to future contingencies, estimated to be as follows:
Estimated Expenses:
<TABLE>
<S> <C>
Registration fee--Securities and Exchange Commission.............. $ 151,516
Printing and Engraving Expenses................................... 75,000
Fees of Rating Agencies........................................... 286,250
Trustee Fees and Expenses......................................... 10,125
Accounting Fees and Expenses...................................... 30,000
Legal Fees and Expenses........................................... 75,000
Miscellaneous Expenses............................................ 22,109
---------
Total......................................................... $ 650,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the General Corporation Law of Delaware allows a corporation
to eliminate the personal liability of directors of a corporation to the
corporation or to any of its stockholders for monetary damage for a breach of
his/her fiduciary duty as a director, except in the case where the director
breached his/her duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a stock repurchase in violation of Delaware corporate law
or obtained an improper personal benefit. The Certificate of Incorporation, as
amended, of Mercury Finance Company (the "Registrant"), contains a provision
which eliminates directors' personal liability as set forth above.
Section 145 of the General Corporation Law of Delaware gives Delaware
corporations broad powers to indemnify their present and former directors and
officers and those of affiliated corporations against expenses incurred in the
defense of any lawsuit to which they are made parties by reason of being or
having been such directors or officers, subject to specified conditions and
exclusions; gives a director or officer who successfully defends an action the
right to be so indemnified; and authorizes the Registrant's to buy directors'
and officers' liability insurance. Such indemnification is not exclusive of any
other right to which those indemnified may be entitled under any bylaw,
agreement, vote of stockholders or otherwise.
The Registrant's Certificate of Incorporation, as amended, provides for
indemnification to the fullest extent as expressly authorized by Section 145 of
the General Corporation Law of Delaware for directors, officers and employees of
the Registrant and also to persons who are serving at the request of the
Registrant as directors, officers or employees of other corporations (including
subsidiaries). This right of indemnification is not exclusive of any other right
which any person may acquire under any statute, bylaw, agreement, contract, vote
of stockholders or otherwise.
The Registrant has purchased liability policies which indemnify its officers
and directors against loss arising from claims by reason of their legal
liability for acts as officers, subject to limitations and conditions as set
forth in the policies.
The proposed forms of Underwriting Agreement and Selling Agency Agreement
for the Debt Securities contains provisions under which the Underwriters agree
to indemnify the directors and officers of the Registrant against certain
liabilities, including liabilities under the Securities Act of 1933.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ----------
<S> <C>
(1.1) Form of Underwriting Agreement.
(1.2) Form of Selling Agency Agreement.*
(4) Form of Indenture between the Company and Mellon Bank, N.A., as Trustee.
(5) Opinion of McDermott, Will & Emery (including consent of counsel).
(12) Statement re computation of ratios of earnings to fixed charges. (Incorporated by reference to
Exhibit 12 to the Company's Annual Regulatory Form 10-K, as amended by Form 10-K/A for the fiscal
year ended December 31, 1996 and the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996. File No. 1-10176)
(23.1) Consent of KPMG Peat Marwick LLP.
(23.2) Consent of McDermott, Will & Emery (filed as part of Exhibit 5).
(24) Powers of attorney (included on signature page).
(25) Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Mellon
Bank, N.A.
</TABLE>
- ------------------------
* To be filed as an amendment to this Registration Statement or as an exhibit
to a Current Report on Form 8-K.
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;
(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.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
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.
II-2
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Acts of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Forest, and State of Illinois, on the 13th day
of December, 1996.
<TABLE>
<S> <C> <C>
MERCURY FINANCE COMPANY
By: /s/ JAMES A. DOYLE
------------------------------------
Name: James A. Doyle
Its: Senior Vice President,
Controller and Secretary
</TABLE>
Each person whose signature appears below constitutes and appoints James A.
Doyle, Bradley S. Vallem and Mark E. Dapier and each or any of them (with full
power to act alone), his/her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him/her in his/her name,
place and stead, in any and all capacities, to sign and file, with the
Securities and Exchange Commission, any and all amendments (including
post-effective amendments) to the Registration Statement, granting unto each
such 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 fully to all
intents and purposes as he/she might or could do in person, hereby ratifying and
confirming all that such attorney-in-fact and agent or their 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 below by the following persons in the
capacities indicated and on the 13th day of December, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------- -------------------------------------------------------
<C> <S>
/s/ JOHN N. BRINCAT Chairman, President, Chief Executive Officer, and
------------------------------------------- Director (as Principal Executive Officer)
John N. Brincat
/s/ DENNIS H. CHOOKASZIAN Director
-------------------------------------------
Dennis H. Chookaszian
/s/ WILLIAM C. CROFT Director
-------------------------------------------
William C. Croft
/s/ CLIFFORD R. JOHNSON Director
-------------------------------------------
Clifford R. Johnson
/s/ ANDREW MCNALLY IV Director
-------------------------------------------
Andrew McNally IV
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------- -------------------------------------------------------
<C> <S>
/s/ BRUCE I. MCPHEE Director
-------------------------------------------
Bruce I. McPhee
/s/ FRED G. STEINGRABER Director
-------------------------------------------
Fred G. Steingraber
/s/ PHILIP J. WICKLANDER Director
-------------------------------------------
Philip J. Wicklander
/s/ JAMES A. DOYLE Senior Vice President, Controller and Secretary (as
------------------------------------------- Principal Accounting and Financial Officer)
James A. Doyle
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ----------
<S> <C>
(1.1) Form of Underwriting Agreement.
(1.2) Form of Selling Agency Agreement. *
(4) Form of Indenture between the Company and Mellon Bank, N.A., as Trustee.
(5) Opinion of McDermott, Will & Emery (including consent of counsel).
(12) Statement re computation of ratios of earnings to fixed charges. (Incorporated by reference to
Exhibit 12 to the Company's Annual Regulatory Form 10-K, as amended by Form 10-K/A for the fiscal
year ended December 31, 1996 and the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996. File No. 1-10176)
(23.1) Consent of KPMG Peat Marwick LLP.
(23.2) Consent of McDermott, Will & Emery (filed as part of Exhibit 5).
(24) Powers of attorney (included on signature page).
(25) Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Mellon
Bank, N.A.
</TABLE>
- ------------------------
* To be filed as an amendment to this Registration Statement or as an exhibit
to a Current Report on Form 8-K.
II-6
<PAGE>
Mercury Finance Company
Underwriting Agreement
[Date]
New York, New York
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Dear Sirs:
Mercury Finance Company, a Delaware corporation (the "Company"),
proposes to sell to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of its securities identified in Schedule I
hereto (the "Securities"), to be issued under an indenture (the "Indenture")
dated as of January 1, 1997, between the Company and Mellon Bank, N.A., as
trustee (the "Trustee"). If the firm or firms listed in Schedule II hereto
include only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives", as used herein, shall each be deemed to
refer to such firm or firms.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (c)
hereof.
(a) If the offering of the Securities is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable and, if
the offering of the Securities is a Non-Delayed Offering (as so specified),
paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use of Form S-3
under the Securities Act of
<PAGE>
2
1933 (the "Act") and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the file
number of which is set forth in Schedule I hereto) on such Form,
including a basic prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one
or more amendments thereto, and may have used a Preliminary Final
Prospectus, each of which has previously been furnished to you. Such
registration statement, as so amended, has become effective. The
offering of the Securities is a Delayed Offering and, although the
Basic Prospectus may not include all the information with respect to
the Securities and the offering thereof required by the Act and the
rules thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the Act and the
rules thereunder to be included therein as of the Effective Date. The
Company will next file with the Commission pursuant to Rules 415 and
424(b)(2) or (5) a final supplement to the form of prospectus included
in such registration statement relating to the Securities and the
offering thereof. As filed, such final prospectus supplement shall
include all required information with respect to the Securities and
the offering thereof and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the Execution
Time, will be included or made therein.
(ii) The Company meets the requirements for the use of Form S-3
under the Act and has filed with the Commission a registration
statement (the file number of which is set forth in Schedule I hereto)
on such Form, including a basic prospectus, for registration under the
Act of the offering and sale of the Securities. The Company may have
filed one or more amendments thereto, including a Preliminary Final
Prospectus,each of
<PAGE>
3
which has previously been furnished to you. The Company will next
file with the Commission either (x) a final prospectus supplement
relating to the Securities in accordance with Rules 430A and 424(b)(1)
or (4), or (y) prior to the effectiveness of such registration
statement, an amendment to such registration statement, including the
form of final prospectus supplement. In the case of clause (x), the
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in the
Final Prospectus with respect to the Securities and the offering
thereof. As filed, such final prospectus supplement or such amendment
and form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information, with
respect to the Securities and the offering thereof and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Securities Exchange Act of 1934
(the "Exchange Act") and the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the respective rules thereunder; on the Effective Date,
the Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date the Indenture did
or will comply in all material respects with the requirements of the Trust
Indenture
<PAGE>
4
Act and the rules thereunder; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), did not or will not, and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date,
the Final Prospectus (together with any supplement thereto) will not,
include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representations or warranties as to (i)
that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and each date after the date
hereof on which a document incorporated by reference in the Registration
Statement is filed. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date including, in
the case of a Non-Delayed Offering, any Preliminary Final Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus.
"Final Prospectus" shall mean the prospectus supplement relating to the
Securities that is first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus or, if, in the case of a
Non-Delayed Offering, no filing pursuant to Rule 424(b) is required, shall
mean the form of final prospectus relating to the Securities, including the
Basic
<PAGE>
5
Prospectus, included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to
in paragraph (a) above, including incorporated documents, exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended. Such term shall include
any Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the Act.
"Rule 430A Information" means information with respect to the Securities
and the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect to
the securities so offered must be included in such registration statement
at the effective date thereof. A "Delayed Offering" shall mean an offering
of securities pursuant to Rule 415 which does not commence promptly after
the effective date of a registration statement, with the
<PAGE>
6
result that only information required pursuant to Rule 415 need be included
in such registration statement at the effective date thereof with respect
to the securities so offered. Whether the offering of the Securities is a
Non-Delayed Offering or a Delayed Offering shall be set forth in Schedule I
hereto.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto the principal amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto, except that, if Schedule I hereto
provides for the sale of Securities pursuant to delayed delivery arrangements,
the respective principal amounts of Securities to be purchased by the
Underwriters shall be as set forth in Schedule II hereto less the respective
amounts of Contract Securities determined as provided below. Securities to be
purchased by the Underwriters are herein sometimes called the "Underwriters'
Securities" and Securities to be purchased pursuant to Delayed Delivery
Contracts as hereinafter provided are herein called "Contract Securities".
If so provided in Schedule I hereto, the Underwriters are authorized
to solicit offers to purchase Securities from the Company pursuant to delayed
delivery contracts ("Delayed Delivery Contracts"), substantially in the form of
Schedule III hereto but with such changes therein as the Company may authorize
or approve. The Underwriters will endeavor to make such arrangements and, as
compensation therefor, the Company will pay to the Representatives, for the
account of the Underwriters, on the Closing Date, the percentage set forth in
Schedule I hereto of the principal amount of the Securities for which Delayed
Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions. The Company will enter into Delayed Delivery Contracts in all
cases where sales of Contract Securities arranged by the Underwriters have been
approved by the Company but, except as the Company may otherwise agree, each
such Delayed Delivery Contract must be for not less than the minimum principal
amount set forth in Schedule I hereto and the aggregate principal amount of
Contract Securities may not
<PAGE>
7
exceed the maximum aggregate principal amount set forth in Schedule I hereto.
The Underwriters will not have any responsibility in respect of the validity or
performance of Delayed Delivery Contracts. The principal amount of Securities
to be purchased by each Underwriter as set forth in Schedule II hereto shall be
reduced by an amount which shall bear the same proportion to the total principal
amount of Contract Securities as the principal amount of Securities set forth
opposite the name of such Underwriter bears to the aggregate principal amount
set forth in Schedule II hereto, except to the extent that you determine that
such reduction shall be otherwise than in such proportion and so advise the
Company in writing; PROVIDED, HOWEVER, that the total principal amount of
Securities to be purchased by all Underwriters shall be the aggregate principal
amount set forth in Schedule II hereto less the aggregate principal amount of
Contract Securities.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwriters' Securities shall be made on the date and at the time specified
in Schedule I hereto (or such later date not later than five business days
after such specified date as the Representatives shall designate), which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 8 hereof (such date and time of delivery
and payment for the Underwriters' Securities being herein called the "Closing
Date"). Delivery of the Underwriters' Securities shall be made to the
Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of
the purchase price thereof to or upon the order of the Company by wire
transfer payable in immediately available funds to an account specified by
the Company. Delivery of the Underwriters' Securities shall be made in
book-entry form through the facilities of the Depository Trust Company.
Global certificates for the Underwriters' Securities shall be registered in
the name of the nominee of the Depository Trust Company.
<PAGE>
8
4. AGREEMENTS. The Company agrees with the several Underwriters
that:
(a) The Company will use its reasonable best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or any
Preliminary Final Prospectus) to the Basic Prospectus unless the Company
has furnished you a copy for your review prior to filing and will not file
any such proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed with
the Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise
the Representatives (i) when the Registration Statement, if not effective
at the Execution Time, and any amendment thereto, shall have become
effective, (ii) when the Final Prospectus, and any supplement thereto,
shall have been filed with the Commission pursuant to Rule 424(b),
(iii) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (iv) of any request by the Commission for any amendment of the
Registration Statement or supplement to the Final Prospectus or for any
additional information, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its reasonable best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final
<PAGE>
9
Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were
made not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Final Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company promptly will
(i) prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 4, an amendment or supplement which will
correct such statement or omission or effect such compliance and
(ii) supply any supplemented Prospectus to you in such quantities as you
may reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and any supplement
thereto as the Representatives may reasonably request. The Company will
pay the expenses of printing or other production of all documents relating
to the offering.
(e) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives may
designate, will maintain such qualifications in effect so long as required
for the distribution of the Securities.
(f) Until the business date set forth on Schedule I hereto, the
Company will not, without the consent of the Representatives, offer, sell
or contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any debt securities issued or guaranteed by the
Company (other than the Securities).
<PAGE>
10
5. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Underwriters' Securities shall
be subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than
(i) 6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 12:00 Noon on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 PM New York City time on such date;
if filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Representatives the
opinion of Mark E. Dapier, general counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company and each of its Significant Subsidiaries (as
defined in Rule 1-02(a) of Regulation S-X promulgated under the Act)
(individually a "Subsidiary" and collectively the "Subsidiaries") has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority to own
its properties and conduct its business as described in the Final
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualifi-
<PAGE>
11
cation wherein it owns or leases material properties or conducts
material business except, in any case, where the failure to be so
qualified or in good standing would not have a material adverse effect
on the business or financial condition of the Company and its
Subsidiaries taken as a whole;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Final Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its Subsidiaries, of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Final Prospectus, and there is no franchise, contract
or other document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the
statements included or incorporated in the Final Prospectus describing
any legal proceedings or material contracts or agreements relating to
the Company fairly summarize such matters;
(iv) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated herein or in any Delayed Delivery Contracts,
except such as have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters and such other
<PAGE>
12
approvals (specified in such opinion) as have been obtained;
(v) neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof or of any Delayed Delivery Contracts will conflict with, result
in a breach or violation of, or constitute a default under any law or
the charter or by-laws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound or any
judgment, order or decree known to such counsel to be applicable to
the Company or any of its Subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its Subsidiaries, except in
each case (other than with respect to the charter or by-laws) where
such default would not have material adverse effect on the business or
the financial condition of the Company and its Subsidiaries taken as a
whole; and
(vi) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Delaware and Illinois or the United States, to the extent deemed proper
and specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to counsel for
the Underwriters and (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and public
officials. References to the Final Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
(c) The Company shall have furnished to the Representatives the
opinion of McDermott, Will & Emery, special counsel for the Company, dated
the Closing Date, to the effect that:
<PAGE>
13
(i) the Company is validly existing as a corporation in good
standing under the laws of the State of Delaware;
(ii) The Company's authorized equity capitalization is as set
forth in the Final Prospectus; the Securities conform to the
description thereof contained in the Final Prospectus; and, if the
Securities are to be listed on any securities exchange, authorization
therefor has been given, subject to official notice of issuance and
evidence of satisfactory distribution, or the Company has filed a
preliminary listing application and all required supporting documents
with respect to the Securities with such securities exchange and such
counsel has no reason to believe that the Securities will not be
authorized for listing, subject to official notice of issuance and
evidence of satisfactory distribution;
(iii) the Indenture has been duly authorized executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject,
as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect); and the
Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to this
Agreement, in the case of the Underwriters' Securities, or by the
purchasers thereof pursuant to Delayed Delivery Contracts, in the case
of any Contract Securities, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect);
(iv) the Registration Statement has become effective under the
Act; any required filing of
<PAGE>
14
the Basic Prospectus, and Preliminary Final Prospectus and the Final
Prospectus, and any supplements thereto, pursuant to Rule 424(b) has
been made in the manner and within the time period required by
Rule 424(b); to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the Final Prospectus
(other than the financial statements and other financial and
statistical information contained therein as to which such counsel
need express no opinion) appeared on their face to be appropriately
responsive in all material respects with the applicable requirements
of the Act, the Exchange Act and the Trust Indenture Act and the
respective rules thereunder;
(v) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated herein or in any Delayed Delivery Contracts,
except such as have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such opinion) as
have been obtained; and
(vi) this Agreement and any Delayed Delivery Contracts have been
duly authorized, executed and delivered by the Company.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Delaware and Illinois or the United States, to the extent deemed proper
and specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to counsel for
the Underwriters and (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and public
officials. References to the Final Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
<PAGE>
15
Such counsel shall also state that it has no reason to believe that at the
Effective Date the Registration Statement contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Final Prospectus includes any untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(d) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, the
Indenture, any Delayed Delivery Contracts, the Registration Statement, the
Final Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Final Prospectus,
any supplement to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
<PAGE>
16
(iii) since the date of the most recent financial statements
included in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in the condition
(financial or other), earnings, business or properties of the Company
and its subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(f) At the Closing Date, KPMG Peat Marwick LLP shall have furnished
to the Representatives a letter or letters (which may refer to letters
previously delivered to one or more of the Representatives), dated as of
the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and any pro forma financial statements
included or incorporated in the Registration Statement and the Final
Prospectus and reported on by them comply in form in all material
respects with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
performance of the procedures specified by the American Institute of
Certified Public Accountants for the review of interim financial
information as described in SAS No. 71, Interim Financial Information;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders and directors (including committees) of
the Company and the Subsidiaries; and inquiries of certain officials
<PAGE>
17
of the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to the date of the most recent audited financial
statements in or incorporated in the Final Prospectus, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus do not comply in form in all material respects with
applicable accounting requirements and with the published rules
and regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus;
(2) with respect to the period subsequent to the date of the
most recent financial statements (other than any capsule
information), audited or unaudited, in or incorporated in the
Registration Statement and the Final Prospectus, there were any
changes, at a specified date not more than five business days
prior to the date of the letter, in the long-term debt of the
Company and its subsidiaries or common or preferred stock of the
Company or decreases in the consolidated net current assets or
stockholders' equity of the Company as compared with the amounts
shown on the most recent consolidated balance sheet included or
incorporated in the Registration Statement and the Final
Prospectus, or for the period from the date of the most recent
financial statements included or incorporated in the Registration
Statement and the Final Prospectus to such specified date there
were any decreases, as compared with the corresponding period in
the preceding year in consolidated
<PAGE>
18
net sales or income before income taxes and extraordinary charge
or in total or per share amounts of net income of the Company and
its subsidiaries, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives; or
(3) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration
Statement and the Final Prospectus do not agree with the amounts
set forth in the unaudited financial statements for the same
periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
financial statements included or incorporated in the Registration
Statement and the Final Prospectus;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Final Prospectus and in
Exhibit 12 to the Registration Statement, including the information
specified by the Representative which is included or incorporated in
Items 1, 2, 6 and 7 of the Company's Annual Report on Form 10-K,
incorporated in the Registration Statement and the Prospectus, and the
information included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or
incorporated in the Company's Quarterly Reports on Form 10-Q,
incorporated in the Registration Statement and the Final Prospectus,
agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation; and
<PAGE>
19
(iv) if unaudited pro forma financial statements are included or
incorporated in the Registration Statement and the Final Prospectus,
on the basis of a reading of the unaudited pro forma financial
statements, carrying out certain specified procedures, inquiries of
certain officials of the Company and the acquired company who have
responsibility for financial and accounting matters, and proving the
arithmetic accuracy of the application of the pro forma adjustments
to the historical amounts in the pro forma financial statements,
nothing came to their attention which caused them to believe that the
pro forma financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
References to the Final Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
In addition, at the Execution Time, KPMG Peat Marwick LLP shall have
furnished to the Representatives a letter or letters, dated as of the
Execution Time, in form and substance satisfactory to the Representatives, to
the effect set forth above.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (e) of this Section 5 or
(ii) any change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its subsidiaries
the effect of which, in any case referred to in clause (i) or (ii) above,
is, in the judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or delivery
of the Securities as contemplated by the Registration Statement (exclusive
of any amendment
<PAGE>
20
thereof) and the Final Prospectus (exclusive of any supplement thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purpose of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(h) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
(i) The Company shall have accepted Delayed Delivery Contracts in any
case where sales of Contract Securities arranged by the Underwriters have
been approved by the Company.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancelation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the location specified in Schedule I hereto.
6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with
<PAGE>
21
any provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally upon demand
for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have actually been incurred by them in
connection with the proposed purchase and sale of the Securities.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any reasonable
legal or other expenses actually incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as
<PAGE>
22
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of the cover page, under the heading
"Underwriting" or "Plan of Distribution" and, if Schedule I hereto provides for
sales of Securities pursuant to delayed delivery arrangements, in the last
sentence under the heading "Delayed Delivery Arrangements" in any Preliminary
Final Prospectus or the Final Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in the documents referred to in the foregoing indemnity, and you, as the
Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above unless
and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such
<PAGE>
23
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
reasonable expense of the indemnifying party. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from the
offering of the Securities; PROVIDED, HOWEVER, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters shall contribute in such proportion as is appropriate to
reflect
<PAGE>
24
not only such relative benefits but also the relative fault of the Company and
of the Underwriters in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses), and benefits received by
the Underwriters shall be deemed to be equal to the total underwriting discounts
and commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or the Underwriters. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), 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 Section 7, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
8. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; PROVIDED, HOWEVER, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase
<PAGE>
25
shall exceed 10% of the aggregate amount of Securities set forth in Schedule II
hereto, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 8, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
9. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Represenatatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Prospectus (exclusive of any supplement thereto).
10. REPRESENTATIONS AND INDEMNITIES to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 7 hereof,
and will survive delivery of and payment for the
<PAGE>
26
Securities. The provisions of Sections 6 and 7 hereof shall survive the
termination or cancelation of this Agreement.
11. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 100 Field Drive, Suite 340, Lake Forest, IL
60045.
12. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder.
13. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
Mercury Finance Company
By:
....................
[Title]
<PAGE>
27
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
By:
By:
.....................
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
or
By:
.....................
For itself and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
<PAGE>
28
SCHEDULE I
Underwriting Agreement dated
Registration Statement No.
Representative(s):
Title, Purchase Price and Description of Securities:
Title:
Principal Amount:
Purchase price (include accrued
interest or amortization, if
any):
Sinking fund provisions:
Redemption provisions:
Other provisions:
Closing Date, Time and Location:
Type of Offering: [Delayed Offering or Non-Delayed
Offering]
Delayed Delivery Arrangements:
Fee:
Minimum principal amount of each contract: $
Maximum aggregate principal amount of all contracts: $
Date referred to in Section 4(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative(s):
<PAGE>
29
SCHEDULE II
Underwriters Principal Amount
------------ of Securities to
be Purchased
----------------
$
-----------------------
Total . . . . . . . . . . . $
-----------------------
-----------------------
<PAGE>
EXHIBIT 4
- --------------------------------------------------------------------------------
MERCURY FINANCE COMPANY
TO
MELLON BANK, N.A.,
Trustee
---------------
INDENTURE
Dated as of January 1, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Page
----
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Compliance Certificates and Opinions. . . . . . . . . . . . 15
SECTION 1.03. Form of Documents Delivered to Trustee. . . . . . . . . . . 15
SECTION 1.04. Acts of Holders; Record Dates . . . . . . . . . . . . . . . 16
SECTION 1.05. Notices, Etc., to Trustee and Company . . . . . . . . . . . 19
SECTION 1.06. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . 19
SECTION 1.07. Conflict with Trust Indenture Act . . . . . . . . . . . . . 20
SECTION 1.08. Effect of Headings and Table of Contents. . . . . . . . . . 20
SECTION 1.09. Successors and Assigns. . . . . . . . . . . . . . . . . . . 20
SECTION 1.10. Separability Clause . . . . . . . . . . . . . . . . . . . . 20
SECTION 1.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . . 20
SECTION 1.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 1.13. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE II
SECURITY FORMS
SECTION 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.02. Form of Face of Security. . . . . . . . . . . . . . . . . . 22
SECTION 2.03. Form of Reverse of Security . . . . . . . . . . . . . . . . 24
SECTION 2.04. Form of Legend for Global Securities. . . . . . . . . . . . 29
SECTION 2.05. Form of Trustee's Certificate of Authentication . . . . . . 29
ARTICLE III
THE SECURITIES
SECTION 3.01. Amount Unlimited; Issuable in Series. . . . . . . . . . . . 29
SECTION 3.02. Denominations . . . . . . . . . . . . . . . . . . . . . . . 33
<PAGE>
2
Page
----
SECTION 3.03. Execution, Authentication, Delivery and Dating. . . . . . . 33
SECTION 3.04. Temporary Securities. . . . . . . . . . . . . . . . . . . . 35
SECTION 3.05. Registration, Registration of Transfer and Exchange . . . . 35
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. . . . . . 38
SECTION 3.07. Payment of Interest; Interest Rights Preserved. . . . . . . 39
SECTION 3.08. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . 40
SECTION 3.09. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.10. Computation of Interest . . . . . . . . . . . . . . . . . . 41
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . . 41
SECTION 4.02. Application of Trust Money . . . . . . . . . . . . . . . . 42
ARTICLE V
REMEDIES
SECTION 5.01. Event of Default. . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. . . . . 45
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee. . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.04. Trustee May File Proofs of Claim. . . . . . . . . . . . . . 48
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Securities. . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.06. Application of Money Collected. . . . . . . . . . . . . . . 48
SECTION 5.07. Limitation on Suits . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.08. Unconditional Right of Holder to Receive Principal, Premium
and Interest. . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.09. Restoration of Rights and Remedies. . . . . . . . . . . . . 50
SECTION 5.10. Rights and Remedies Cumulative. . . . . . . . . . . . . . . 50
SECTION 5.11. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . 50
SECTION 5.12. Control by Holders. . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . 51
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . . 51
<PAGE>
3
Page
----
SECTION 5.15. Waiver of Usury, Stay or Extension Laws. . . . . . . . . . . 52
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities. . . . . . . . . . . . . 52
SECTION 6.02. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.03. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . 53
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities . . . 54
SECTION 6.05. May Hold Securities. . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.06. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.07. Compensation and Reimbursement . . . . . . . . . . . . . . . 55
SECTION 6.08. Conflicting Interests. . . . . . . . . . . . . . . . . . . . 56
SECTION 6.09. Corporate Trustee Required; Eligibility. . . . . . . . . . . 56
SECTION 6.10. Resignation and Removal; Appointment of Successor. . . . . . 56
SECTION 6.11. Acceptance of Appointment by Successor . . . . . . . . . . . 58
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 6.13. Preferential Collection of Claims Against Company. . . . . . 60
SECTION 6.14. Appointment of Authenticating Agent. . . . . . . . . . . . . 60
ARTICLE VII
HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders. . 62
SECTION 7.02. Preservation of Information; Communications to Holders . . . 63
SECTION 7.03. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.04. Reports by Company . . . . . . . . . . . . . . . . . . . . . 63
<PAGE>
4
Page
----
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms . . . . 64
SECTION 8.02. Successor Substituted. . . . . . . . . . . . . . . . . . . . 65
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders . . . . . 65
SECTION 9.02. Supplemental Indentures With Consent of Holders. . . . . . . 67
SECTION 9.03. Execution of Supplemental Indentures . . . . . . . . . . . . 68
SECTION 9.04. Effect of Supplemental Indentures. . . . . . . . . . . . . . 68
SECTION 9.05. Conforming with Trust Indenture Act. . . . . . . . . . . . . 68
SECTION 9.06. Reference in Securities to Supplemental Indentures . . . . . 68
ARTICLE X
COVENANTS
SECTION 10.01. Payment of Principal, Premium and Interest . . . . . . . . . 69
SECTION 10.02. Maintenance of Office or Agency. . . . . . . . . . . . . . . 69
SECTION 10.03. Money for Securities Payments to Be Held in Trust. . . . . . 70
SECTION 10.04. Statement by Officers as to Default. . . . . . . . . . . . . 71
SECTION 10.05. Existence. . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.06. Limitation on Secured Debt . . . . . . . . . . . . . . . . . 72
SECTION 10.07. Limitation on Sale and Leaseback Transactions. . . . . . . . 72
SECTION 10.08. Waiver of Certain Covenants. . . . . . . . . . . . . . . . . 73
<PAGE>
5
Page
----
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01. Applicability of Article . . . . . . . . . . . . . . . . . . 73
SECTION 11.02. Election to Redeem; Notice to Trustee. . . . . . . . . . . . 73
SECTION 11.03. Selection by Trustee of Securities to Be Redeemed. . . . . . 74
SECTION 11.04. Notice of Redemption . . . . . . . . . . . . . . . . . . . . 75
SECTION 11.05. Deposit of Redemption Price. . . . . . . . . . . . . . . . . 76
SECTION 11.06. Securities Payable on Redemption Date. . . . . . . . . . . . 76
SECTION 11.07. Securities Redeemed in Part. . . . . . . . . . . . . . . . . 76
ARTICLE XII
SINKING FUNDS
SECTION 12.01. Applicability of Article . . . . . . . . . . . . . . . . . . 77
SECTION 12.02. Satisfaction of Sinking Fund Payments with Securities. . . . 77
SECTION 12.03. Redemption of Securities for Sinking Fund. . . . . . . . . . 78
ARTICLE XIII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.01. Company's Option to Effect Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 13.02. Defeasance and Discharge . . . . . . . . . . . . . . . . . . 78
SECTION 13.03. Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.04. Conditions to Defeasance or Covenant Defeasance. . . . . . . 80
SECTION 13.05. Deposited Money and U.S. Government Obligations to Be Held
in Trust; Miscellaneous Provisions . . . . . . . . . . . . 82
SECTION 13.06. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . 83
<PAGE>
6
........................
Certain Sections of this Indenture relating to Sections 310 through 318,
inclusive, of the Trust Indenture act of 1939:
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
Section 310 (a)(1). . . . . . . . . . . . . . . . . . . . . . 6.09
(a)(2). . . . . . . . . . . . . . . . . . . . . . 6.09
(a)(3). . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . 6.08
6.10
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . . 6.13
(b) . . . . . . . . . . . . . . . . . . . . . . . 6.13
Section 312 (a) . . . . . . . . . . . . . . . . . . . . . . . 7.01
7.02
(b) . . . . . . . . . . . . . . . . . . . . . . . 7.02
(c) . . . . . . . . . . . . . . . . . . . . . . . 7.02
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . 7.03
(b) . . . . . . . . . . . . . . . . . . . . . . . 7.03
(c) . . . . . . . . . . . . . . . . . . . . . . . 7.03
(d) . . . . . . . . . . . . . . . . . . . . . . . 7.03
Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . . 7.04
(a)(4). . . . . . . . . . . . . . . . . . . . . . 1.02
10.04
(b) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . 1.02
(c)(2). . . . . . . . . . . . . . . . . . . . . . 1.02
(c)(3). . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . 1.02
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . . 6.01
(b) . . . . . . . . . . . . . . . . . . . . . . . 6.02
(c) . . . . . . . . . . . . . . . . . . . . . . . 6.01
(d) . . . . . . . . . . . . . . . . . . . . . . . 6.01
(e) . . . . . . . . . . . . . . . . . . . . . . . 5.14
Section 316 (a) . . . . . . . . . . . . . . . . . . . . . . . 1.01
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . 5.02
5.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . 5.13
(a)(2). . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . 5.08
(c) . . . . . . . . . . . . . . . . . . . . . . . 1.04
Section 317 (a)(1). . . . . . . . . . . . . . . . . . . . . . 5.03
(a)(2). . . . . . . . . . . . . . . . . . . . . . 5.04
(b) . . . . . . . . . . . . . . . . . . . . . . . 10.03
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . 1.07
<PAGE>
7
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
_____________
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
<PAGE>
INDENTURE, dated as of January 1, 1997, between MERCURY FINANCE
COMPANY, a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its
principal executive office at 100 Field Drive, Suite 340, Lake Forest,
Illinois 60045 and Mellon Bank, N.A., a national banking association,
as Trustee (herein called the "Trustee");
W I T N E S S E T H :
WHEREAS the Company has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of its
unsecured debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as in this Indenture
provided; and
WHEREAS all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
any series thereof, 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 or unless the context otherwise
requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
<PAGE>
2
(3) all accounting terms not otherwise defined herein have the meaning
assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the
term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of this instrument;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the
case may be, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified
in Section 1.04.
"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 corresponding to
the foregoing.
"Attributable Debt" means, as of the date of its determination, the
present value (discounted semiannually at an interest rate of 7.0% per annum)
of the obligation of a lessee for rental payments pursuant to any Sale and
Leaseback Transaction (reduced by the amount of the rental obligations of any
sublessee of all or part of the same property) during the remaining term of
such Sale and Leaseback Transaction (including any period for which the lease
relating thereto has been extended), such rental payments not to include
amounts payable by the lessee for maintenance and repairs, insurance, taxes,
assessments and similar charges and for contingent rents (such as those based
on sales). In the case of any Sale and Leaseback Transaction in which the
lease is terminable by the lessee upon the payment of a penalty, such rental
payments shall be
<PAGE>
3
considered for purposes of this definition to be the lesser of (a) the rental
payments to be paid under such Sale and Leaseback Transaction until the first
date (after the date of such determination) upon which it may be so
terminated plus the then applicable penalty upon such termination and (b) the
rental payments required to be paid during the remaining term of such Sale
and Leaseback Transaction (assuming such termination provision is not
exercised).
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the
Company or committee of that board duly authorized to act for it in respect
hereof.
"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,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.
"Capitalized Lease Obligation" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to
use) real or personal property that is required to be classified and
accounted for as a capital lease obligation under generally accepted
accounting principles, and, for the purposes of this Indenture, the amount of
such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with such principles.
"Capital Stock", as applied to the stock of any corporation, means
the capital stock of every class whether now or hereafter authorized,
regardless of whether such capital stock shall be limited to a fixed sum or
percentage with respect to the rights of the holders thereof to participate
in dividends and in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding up of such corporation.
<PAGE>
4
"Certificate" means a certificate signed by a duly authorized
signatory of the Company and delivered to the Trustee.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Consolidated Net Tangible Assets" means at any date, the total
assets appearing on the most recently prepared consolidated balance sheet of
the Company and the Subsidiaries as of the end of a fiscal quarter of the
Company, prepared in accordance with generally accepted accounting
principles, less (a) all current liabilities as shown on such balance sheet
and (b) Intangible assets. "INTANGIBLE ASSETS" means the value (net of any
applicable reserves), as shown on or reflected in such balance sheet, of: (i)
all trade names, trademarks, licenses, patents, copyrights and goodwill; (ii)
organizational and development costs; (iii) deferred charges (other than
prepaid items such as insurance, taxes, interest, commissions, rents and
similar items and tangible assets being amortized); and (iv) unamortized debt
discount and expense, less unamortized premium.
"Corporate Trust Office" means the principal office of the Trustee
in New York, New York at which its corporate trust business is administered.
"Corporation" means a corporation, association, company,
joint-stock company or business trust.
<PAGE>
5
"Covenant Defeasance" has the meaning specified in Section 13.03.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Defeasance" has the meaning specified in Section 13.02.
"Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act
as Depositary for such Securities as contemplated by Section 3.01.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934 and any
applicable statute successor thereto, in each case as amended from time to
time.
"Expiration Date" has the meaning specified in Section 1.04.
"Finance Business" means (1) the small loan, personal finance,
consumer finance or instalment credit business (including the business of
making collateral loans secured by credit obligations or real or personal
property), (2) the sales finance business and the business of purchasing
notes and accounts receivable (whether or not repayable in installments), (3)
the commercial financing and factoring business as generally conducted,
including the leasing of tangible personal property, and (4) any business
related to or conducted in connection with any business of the character
referred to in the foregoing clauses (1), (2) and (3) other than insurance
underwriting.
"Finance-Related Insurance Business" means the business of (1)
insuring articles and merchandise the sale or leasing of which is financed in
the ordinary course of the Finance Business, and (2) insuring the lives of
individuals who are liable for the payment of the amounts owing on such sales
or leases and writing accident and health insurance on such individuals.
"Funded Debt" means any indebtedness maturing more than one year
from the date of issuance thereof, including
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6
any indebtedness renewable or extendible at the option of the obligor to a
date later than one year from the date of the original issuance thereof.
"Global Security" means a Security that evidences all or part of
the Securities of any series and bears the legend set forth in Section 2.04
(or such legend as may be specified as contemplated by Section 3.01 for such
Securities).
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indebtedness" means (a) any liability of any Person (1) for
borrowed money, or under any reimbursement obligation relating to a letter of
credit, or (2) evidenced by a bond, note, debenture or similar instrument
(including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with
services incurred in connection with capital expenditures (other than a trade
payable or a current liability arising in the ordinary course of business),
or (3) for the payment of money relating to a Capitalized Lease Obligation,
or (4) for Interest Rate Protection Obligations; (b) any liability of others
described in the preceding clause (a) that the Person has guaranteed or that
is otherwise its legal liability; and (c) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of
the types referred to in clauses (a) and (b) above.
"Indenture" means this instrument as originally executed and as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively. The term "Indenture" shall also include the terms
of particular series of Securities established as contemplated by Section 3.01.
"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.
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7
"Interest Payment Date", when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Interest Rate Protection Obligations" of any Person means the
obligations of such Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a floating rate of interest on the same
notional amount.
"Investment Company Act" means the Investment Company Act of 1940
and any statute successor thereto, in each case as amended from time to time.
"Liens" means any mortgage, lien, pledge, security interest, charge
or encumbrance.
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 5.01(4) or 5.01(5).
"Opinion of Counsel" means a written opinion of counsel, who may be
an employee of or counsel for the Company, or other counsel reasonably
acceptable 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 theretofore authenticated and
delivered under this Indenture, EXCEPT:
(1) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
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8
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; PROVIDED that, if such
Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 13.02; and
(4) 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;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 5.02,
(B) if, as of such date, the principal amount payable at the Stated Maturity of
a Security is not determinable, the principal amount of such Security which
shall be deemed to be Outstanding shall be the amount as specified or determined
as contemplated by Section 3.01, (C) the principal amount of a Security
denominated in one or more foreign currencies or currency units which shall be
deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of
such date in the manner provided as contemplated by Section 3.01, of the
principal amount of such Security (or, in the case of a Security described in
Clause (A) or (B) above, of the amount determined as provided in such Clause),
and (D) Securities owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding, except
<PAGE>
9
that, in determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent, waiver
or other action, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Securities
and that the pledgee is not the Company or any Affiliate of the Company or of
such other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of or any premium or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof or any other entity.
"Place of Payment", when used with respect to any Security, means
the place or places where the principal of and any premium and interest on
that Security are payable as specified pursuant to this Indenture.
"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
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"Principal Property" means any land, land improvements, buildings
and associated factory, distribution, laboratory and office equipment
(excluding any products marketed by the Company or any Subsidiary)
constituting a distribution facility, operating facility, manufacturing
facility, development facility, warehouse facility, service facility or
office facility (including any portion thereof), which facility (a) is owned
by or leased to the Company or any Restricted Subsidiary, (b) is located
within the United States and (c) has an acquisition cost plus capitalized
improvements in excess of 0.50% of Consolidated Net Tangible Assets as of the
date of such determination, other than (i) any such facility, or portion
thereof, which has been financed by obligations issued by or on behalf of a
State, a Territory or a possession of the
<PAGE>
10
United States, or any political subdivision of any of the foregoing, or the
District of Columbia, the interest on which is excludable from gross income
of the holders thereof (other than a "substantial user" of such facility or a
"related Person" as those terms are used in Section 103 of the Internal
Revenue Code of 1986, as amended (the "Code")) pursuant to the provisions of
Section 103 of the Code (or any similar provision hereafter enacted) as in
effect at the time of issuance of such obligations, (ii) any such facility
which the Board of Directors may by Board Resolution declare is not of
material importance to the Company and the Restricted Subsidiaries taken as a
whole and (iii) any such facility, or portion thereof, owned or leased
jointly or in common with one or more Persons other than the Company and any
Subsidiary and in which the interest of the Company and all Subsidiaries does
not exceed 50%.
"Redemption Date", when used with respect to any Security to be
redeemed, 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.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for
that purpose pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means
any officer of the Trustee assigned and authorized by it to administer its
corporate trust matters.
"Restricted Securities" means any shares of the capital stock or
Indebtedness of any Restricted Subsidiary.
"Restricted Subsidiary" means any Subsidiary engaged in the Finance
Business or in the Finance-Related Insurance Business, other than a
Subsidiary which either (a) is organized under the laws of any jurisdiction
outside the United States of America, Puerto Rico or Canada, or (b) conducts
a major portion of its business outside the United States of America, Puerto
Rico or Canada.
"Sale and Leaseback Transaction" means any arrangement with any
Person providing for the leasing by the Company or any Restricted Subsidiary
of any Principal Property (whether such Principal Property is now owned or
<PAGE>
11
hereafter acquired) that has been or is to be sold or transferred by the
Company or such Restricted Subsidiary to such Person, other than (a)
temporary leases for a term, including renewals at the option of the lessee,
of not more than three years; (b) leases between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries; and (c) leases of Principal
Property executed by the time of, or within 180 days after the latest of, the
acquisition, the completion of construction or improvement (including any
improvements on property which will result in such property becoming
Principal Property), or the commencement of commercial operation of such
Principal Property.
"Secured Indebtedness" means (a) Indebtedness of the Company or a
Restricted Subsidiary which is secured by any Lien upon any of its assets and
(b) Indebtedness of the Company or a Restricted Subsidiary in respect of any
conditional sale or other title retention agreement covering any of its
assets; but "Secured Indebtedness" shall not include any of the following:
(i) Indebtedness of the Company and the Restricted Subsidiaries
outstanding on January 1, 1997, secured by then existing Liens upon,
or incurred in connection with conditional sales agreements or other
title retention agreements with respect to, any of its assets;
(ii) Indebtedness which is secured by (A) purchase money Liens upon
any assets acquired after January 1, 1997, or (B) Liens placed on any
assets after January 1, 1997, during construction or improvement
thereof (including any improvements on any asset) or placed thereon
within 180 days after the later of acquisition, completion of
construction or improvement or the commencement of commercial
operation of such asset or improvement, or (C) conditional sale
agreements or other title retention agreements with respect to
any assets acquired after January 1, 1997, if (in each case referred
to in this subparagraph (ii)) (x) such Lien or agreement secures all
or any part of the Indebtedness incurred for the purpose of financing
all or any part of the purchase price and (y) such Lien or agreement
does not extend to any assets other than the assets so acquired;
PROVIDED, HOWEVER, that the amount by which the aggregate principal
amount of Indebtedness secured by any such Lien or agreement exceeds
the cost to the Company or
<PAGE>
12
such Restricted Subsidiary of the related assets shall be considered
to be "Secured Indebtedness";
(iii) Indebtedness which is secured by Liens on any assets, which
Liens exist at the time of acquisition (by any manner whatsoever) of
such assets by the Company or a Restricted Subsidiary;
(iv) Indebtedness of Restricted Subsidiaries owing to the Company
or any other Restricted Subsidiary and Indebtedness of the Company
owing to any Restricted Subsidiary;
(v) In the case of any corporation which becomes (by any manner
whatsoever) a Restricted Subsidiary after January 1, 1997,
Indebtedness which is secured by Liens upon, or conditional sale
agreements or other title retention agreements with respect to, its
assets, which Liens exist at the time such corporation becomes a
Restricted Subsidiary;
(vi) Guarantees by the Company of Secured Indebtedness and
Attributable Debt of any Restricted Subsidiaries and guarantees by a
Restricted Subsidiary of Secured Indebtedness and Attributable Debt
of the Company and any other Restricted Subsidiaries;
(vii) Attributable Debt arising from any Sale and Leaseback
Transaction;
(viii) Indebtedness secured by Liens on assets of the Company or a
Restricted Subsidiary in favor of the United States of America, any
State, Territory or possession thereof, or the District of Columbia,
or any department, agency or instrumentality or political subdivision
of the United States of America or any State, Territory or possession
thereof, or the District of Columbia, or in favor of any other country
or any political subdivision thereof, if such Indebtedness was
incurred for the purpose of financing all or any part of the purchase
price or the cost of construction of the property subject to such
Lien; PROVIDED, HOWEVER, that the amount by which the aggregate
principal amount of Indebtedness secured by any such Lien exceeds the
cost to the Company or such Restricted Subsidiary of the related
acquisition or construction shall be considered to be "Secured
Indebtedness";
<PAGE>
13
(ix) Indebtedness secured by Liens on aircraft, airframes or aircraft
engines, aeronautic equipment or computers and electronic data
processing equipment; and
(x) The replacement, extension or renewal (or successive
replacements, extensions or renewals) of any Indebtedness (in whole or
in part) excluded from the definition of "Secured Indebtedness" by
subparagraphs (i) through (ix) above; PROVIDED, HOWEVER, that no Lien
securing, or conditional sale or title retention agreement with
respect to, such Indebtedness shall extend to or cover any assets,
other than such assets which secured the Indebtedness so replaced,
extended or renewed (plus improvements on or to any such assets);
PROVIDED FURTHER, HOWEVER, that to the extent that such replacement,
extension or renewal increases the principal amount of Indebtedness
secured by such Lien or is in a principal amount in excess of the
principal amount of Indebtedness excluded from the definition of
"Secured Indebtedness" by subparagraphs (i) through (ix) above, the
amount of such increase or excess shall be considered to be "Secured
Indebtedness".
In no event shall the foregoing provisions be interpreted to mean or their
operation to cause the same Indebtedness to be included more than once in the
calculation of "Secured Indebtedness" as that term is used in this Indenture.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933 and any applicable
statute successor thereto, in each case as amended from time to time.
"Securitization" shall mean the transfer or pledge of assets or
interests in assets to a trust, partnership, corporation or other entity, which
transfer or pledge is funded by such entity in whole or in part by the issuance
of instruments or securities that are paid principally from the cash flow
derived from such assets or interests in assets.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05.
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14
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee 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 as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means any corporation of which, at the time of
determination, the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the shares of voting stock. "WHOLLY
OWNED", when used with reference to a Subsidiary, means a Subsidiary of which
all of the outstanding capital stock is owned by the Company or by one or more
wholly owned Subsidiaries. "VOTING STOCK", when used with reference to a
Subsidiary, means stock of the class or classes having general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation provided that, for the
purposes hereof, stock which carries only the right to vote conditionally on the
happening of an event shall not be considered voting stock whether or not such
event shall have happened.
"Trust Indenture Act" means the Trust Indenture Act of 1939 and any
applicable statute successor thereto, in each case as amended from time to time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect
to Securities of that series.
"U.S. Government Obligation" has the meaning specified in
Section 13.04.
"Vice President", when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
<PAGE>
15
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
such certificates and opinions as may be required under the Trust Indenture
Act. Each such certificate or opinion shall be given in the form of a
Certificate, if to be given by an authorized signatory of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth
in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for certificates
provided for in Section 10.04) shall include:
(1) 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 covenant or
condition has been complied with; and
(2) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
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 with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company, stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.
<PAGE>
16
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; RECORD DATES. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.
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 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 manner which the Trustee deems
sufficient.
The ownership of Securities shall be proved by the Security Register.
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
<PAGE>
17
in lieu thereof in respect of anything done, omitted or suffered to be done
by the Trustee or the Company in reliance thereon, whether or not notation of
such action is made upon such Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series; PROVIDED that
the Company may not set a record date for, and the provisions of this
paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next paragraph.
If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date, and no
other Holders, shall be entitled to take the relevant action, whether or not
such Holders remain Holders after such record date; PROVIDED that no such
action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant
to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its
own expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Trustee in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 1.06.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 5.02, (iii) any request to
institute proceedings referred to in Section 5.07(2) or (iv) any direction
referred to in Section 5.12, in each case with respect to Securities of such
series. If any record date is set pursuant to this paragraph, the Holders of
<PAGE>
18
Outstanding Securities of such series on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
PROVIDED that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing
in this paragraph shall be construed to prevent the Trustee from setting a
new record date for any action for which a record date has previously been
set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be canceled and of no
effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date,
the proposed action by Holders and the applicable Expiration Date to be given
to the Company in writing and to each Holder of Securities of the relevant
series in the manner set forth in Section 1.06.
With respect to any record date set pursuant to this Section, the
party hereto which sets such record date may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; PROVIDED that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto
in writing, and to each Holder of Securities of the relevant series in the
manner set forth in Section 1.06, on or prior to the existing Expiration
Date. If an Expiration Date is not designated with respect to any record
date set pursuant to this Section, the party hereto which set such record
date shall be deemed to have initially designated the 180th day after such
record date as the Expiration Date with respect thereto, subject to its right
to change the Expiration Date as provided in this paragraph. Notwithstanding
the foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one
or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
<PAGE>
19
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:
(1) 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 its Corporate Trust Office,
Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to
the Company addressed to it at the address of its principal executive
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
SECTION 1.06. NOTICE TO HOLDERS; WAIVER. Where this Indenture
provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder affected by such
event, at his address as it appears in the Security Register, not later than
the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of notice by Holders shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose
hereunder.
<PAGE>
20
SECTION 1.07. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act which is required under such Act to be a part of and govern this
Indenture, the provision of the Trust Indenture Act shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the provision of this
Indenture shall control.
SECTION 1.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
SECTION 1.09. 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 1.10. SEPARABILITY CLAUSE. In case any provision in this
Indenture or in the Securities 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 1.11. BENEFITS OF INDENTURE. Nothing in this Indenture or
in the Securities, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12. GOVERNING LAW. This Indenture and the Securities
shall be governed by and construed in accordance with the law of the State of
New York.
SECTION 1.13. LEGAL HOLIDAYS. In any case where any Interest
Payment Date, Redemption Date or Stated Maturity of any Security shall not be
a Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities (other than a provision of
any Security which specifically states that such provision shall apply in
lieu of this Section)) payment of interest or principal (and premium, if any)
need not be made at such Place of Payment on such date, but may be made on
the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at
the Stated Maturity,
<PAGE>
21
and, if such payment is made, no interest shall accrue on such payment for
the period from and after any such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be.
ARTICLE II
SECURITY FORMS
SECTION 2.01. FORMS GENERALLY. The Securities of each series shall
be in substantially the form set forth in this Article, or in such other form
as shall be established by or pursuant to a Board Resolution or one or more
indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or
Depositary therefor or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution thereof.
If the form of Securities of any series is established by action taken
pursuant to a Board Resolution or indenture supplemental hereto, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 2.02. FORM OF FACE OF SECURITY. [Insert any legend required
by the Internal Revenue Code and the regulations thereunder.]
MERCURY FINANCE COMPANY
No. $
<PAGE>
22
Mercury Finance Company, a corporation duly organized and existing
under the laws of Delaware (herein called the "Company", which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to , or
registered assigns, the principal sum of Dollars on
[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, semiannually on and in each
year, commencing , at the rate of % per annum, until the
principal hereof is paid or made available for payment [if applicable,
insert--; PROVIDED that any principal and premium, and any such installment of
interest which is overdue shall bear interest at the rate of % per annum (to
the extent that the payment of such interest shall be legally enforceable),
from the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand] 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 Person 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 the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person 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 set
by the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or 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 said Indenture].
[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 Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of % per
<PAGE>
23
annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment. Interest on any overdue principal or premium shall be
payable on demand. [Any such interest on overdue principal or premium which is
not paid on demand shall bear interest at the rate of % per annum (to the
extent that the payment of such interest on interest shall be legally
enforceable), from the date of such demand until the amount so demanded is
paid or made available for payment. Interest on any overdue interest shall be
payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert--any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in , in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts [if applicable insert--;
PROVIDED, HOWEVER, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].
Reference is hereby made to the further provisions of this 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 referred to on the reverse hereof by manual signature, 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 corporate seal.
Dated:
MERCURY FINANCE COMPANY
by
---------------------------------
Attest:
<PAGE>
24
- -------------------------------------
SECTION 2.03. FORM OF REVERSE OF SECURITY. This Security is one of
a duly authorized issue of securities of the Company (herein called the
"Securities"), issued and to be issued in one or more series under an
Indenture, dated as of January 1, 1997 (herein called the "Indenture", which
term shall have the meaning assigned to it in such instrument), between the
Company and Mellon Bank, N.A., as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture 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 series designated on the face hereof [if applicable, insert--,
limited in aggregate principal amount to $ ].
[If applicable, insert--The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [(if applicable,
insert--(1) on in each 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
(2)] at any time [if applicable, insert--on or after , 19 ], 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 [if
applicable, insert--on or before , % and if redeemed] during
the 12-month period beginning , of the years indicated,
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
<PAGE>
25
redemption [if applicable, insert--(whether through operation of the sinking
fund or otherwise)] with accrued interest to the Redemption Date, but interest
installments whose Stated Maturity is on or prior to such Redemption Date will
be payable to the Holders of such Securities, 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--The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on in
each year commencing with the year and ending with the year
through operation of the sinking fund for this series 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 (2) at any time [if
applicable, insert--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 OTHERWISE
REDEMPTION THROUGH THAN THROUGH
OPERATION OF THE OPERATION OF THE
YEAR SINKING FUND 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, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, 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.]
<PAGE>
26
[If applicable, insert--Notwithstanding the foregoing, the Company may
not, prior to , redeem any Securities of this series as contemplated
by [if applicable, insert--Clause (2) of] the preceding paragraph as a part of,
or in anticipation of, any refunding operation by the application, directly or
indirectly, of moneys 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 this series provides for
the redemption (on and ending with the year and ending with the year of
[if applicable insert--not less than $ ("mandatory sinking fund") and
not more than $ aggregate principal amount of Securities of
this series. Securities of this series acquired or redeemed by the Company
otherwise than through [if applicable, insert--mandatory] sinking fund payments
may be credited against subsequent [if applicable, insert--mandatory] sinking
fund payments otherwise required to be made [if applicable, insert--, in the
inverse order in which they become due].]
[If the Security is subject to redemption of any kind, insert--In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert--The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security], [in each case] upon compliance with certain conditions set forth in
the Indenture.]
[If the Security is not an Original Issue Discount Security,
insert--If an Event of Default with respect to Securities of this series 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 the Security is an Original Issue Discount Security, insert--If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect
<PAGE>
27
provided in the Indenture. Such amount shall be equal to--insert formula for
determining the amount. Upon payment of (i) the amount of principal so
declared due and payable and (ii) interest on any overdue principal, premium
and interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and premium and interest, if any, on the
Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities of each series to
be affected under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security 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.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee
or for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of not less than 25% in
principal amount of the Securities of this series at the time Outstanding
shall have made a written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee
reasonable indemnity, and the Trustee shall not have received from the
Holders of a majority in principal amount of Securities of this series at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not
<PAGE>
28
apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest
hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall affect or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in
the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Security Register, 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 any premium 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 his attorney duly authorized in writing, and thereupon one
or more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The securities of this series are issuable only in registered form
without coupons in denominations of $[ ] and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of
a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental 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.
<PAGE>
29
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
SECTION 2.04. FORM OF LEGEND FOR GLOBAL SECURITIES. Unless
otherwise specified as contemplated by Section 3.01 for the Securities
evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
A DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED
IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 2.05. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated herein referred
to in the Indenture.
MELLON BANK N.A.,
As Trustee
By
Authorized Officer
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 or pursuant to a Board Resolution or one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,
<PAGE>
30
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any
other series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Section 3.04, 3.05,
3.06, 9.06 or 11.07 and except for any Securities which, pursuant
to Section 3.03, are deemed never to have been authenticated and
delivered hereunder);
(3) the Person to whom any interest on a security of the series
shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of
the series is payable;
(5) the rate or rates at which any Securities of the series shall
bear interest, if any, the date or dates from which any such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any such
interest payable on any Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which any Securities of the
series may be redeemed, in whole or in part, at the option of the
Company and, if other than by a Board Resolution, the manner in
which any election by the Company to redeem the Securities shall be
evidenced;
(8) the obligation, if any, of the Company to redeem or purchase
any Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of the Holder thereof and the
period or periods within which, the price or prices at which
<PAGE>
31
and the terms and conditions upon which any Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series
shall be issuable;
(10) if the amount of principal of or any premium or interest on
any Securities of the series may be determined with reference to an
index or pursuant to a formula, the manner in which such amounts
shall be determined;
(11) if other than the currency of the United States of America,
the currency, currencies or currency units in which the principal
of or any premium or interest on any Securities of the series shall
be payable and the manner of determining the equivalent thereof in
the currency of the United States of America for any purpose,
including for purposes of the definition of "Outstanding" in
Section 1.01;
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or the Holder thereof, in one or more currencies or
currency units other than that or those in which such Securities
are stated to be payable, the currency, currencies or currency
units in which the principal of or any premium or interest on such
Securities as to which such election is made shall be payable, the
periods within which and the terms and conditions upon which such
election is to be made and the amount so payable (or the manner in
which such amount shall be determined);
(13) if other than the entire principal amount thereof, the portion
of the principal amount of any Securities of the series which shall
be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 5.02;
(14) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or
more dates prior to the Stated Maturity, the amount which shall be
<PAGE>
32
deemed to be the principal amount of such Securities as of any such
date for any purpose thereunder or hereunder, including the
principal amount thereof which shall be due and payable upon any
Maturity other than the Stated Maturity or which shall be deemed to
be Outstanding as of any date prior to the Stated Maturity (or, in
any such case, the manner in which such amount deemed to be the
principal amount shall be determined);
(15) if applicable, that the Securities of the series, in whole or
any specified part shall be defeasible pursuant to Section 13.02
and that certain covenants of the Company shall be defeasible
pursuant to Section 13.03 and, if other than by a Board Resolution,
the manner in which any election by the Company to defease such
Securities or covenants shall be evidenced;
(16) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective Depositaries for such
Global Securities, the form of any legend or legends which shall be
borne by any such Global Security in addition to or in lieu of that
set forth in Section 2.04 and any circumstances in addition to or
in lieu of those set forth in Clause (2) of the last paragraph of
Section 3.05 in which any such Global Security may be exchanged in
whole or in part for Securities registered, and any transfer of
such Global Security in whole or in part may be registered, in the
name or names of Persons other than the Depositary for such Global
Security or a nominee thereof;
(17) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right
of the Trustee or the requisite Holders of such Securities to
declare the principal amount thereof due and payable pursuant to
Section 5.02;
(18) any addition to or change in the covenants set forth in
Article X which applies to Securities of the series; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of
<PAGE>
33
this Indenture, except as permitted by Section 9.01(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above or indenture supplemental hereto
referred to above.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution or indenture supplemental hereto, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Securities.
SECTION 3.02. DENOMINATIONS. The Securities of each series shall be
issuable only in registered form without coupons and only in such
denominations as shall be specified as contemplated by Section 3.01. In the
absence of any such specified denomination with respect to the Securities of
any series, the Securities of such series shall be issuable in denominations
of $1,000 and any integral multiple thereof.
SECTION 3.03. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents or Assistant Vice Presidents, or Treasurer under its corporate
seal reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at the time of execution the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such
<PAGE>
34
Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities. In authenticating such Securities,
and accepting the additional responsibilities under this Indenture in
relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating,
(1) that the form of such Securities does not violate or conflict
with the provisions of this Indenture;
(2) that the terms of such Securities do not violate or conflict
with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights
and to general equity principles.
Notwithstanding the provisions of Section 3.01 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver the record of action, the
Company Order and Opinion of Counsel otherwise required thereby at or prior
to the authentication of each Security of such series, if such documents
(with appropriate modifications) are delivered at or prior to the
authentication upon original issuance of the first Security of such series to
be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
Notwithstanding the
<PAGE>
35
foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
3.09, 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 and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable 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, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and
of like tenor and aggregate principal amount. Until so exchanged, the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series
and tenor.
SECTION 3.05. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee
a register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the
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36
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security of a
series at the 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
like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and
of like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustees
shall authenticate and deliver, the Securities which the Holder is entitled
to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or 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 or 11.07 not involving
any transfer.
If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company shall not be required (A) to issue,
register the transfer of or exchange any Securities of that series (or of
that series
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37
and specified tenor as the case may be) during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 11.03
and ending at the close of business on the day of such mailing, or (B) to
register the transfer of or exchange any Security so selected for redemption
in whole or in part, except the unredeemed portion of any Security being
redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Each Global Security authenticated under this Indenture shall
be registered in the name of the Depositary designated for such
Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each
such Global Security shall constitute a single Security for all
purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in
part may be registered, in the name of any Person other than the
Depositary for such Global Security or a nominee thereof unless
(A) such Depositary (i) has notified the Company that it is unwilling
or unable to continue as Depositary for such Global Security or
(ii) has ceased to be a clearing agency registered under the
Exchange Act, (B) there shall have occurred and be continuing an
Event of Default with respect to such Global Security or (C) there
shall exist such circumstances, if any, in addition to or in lieu
of the foregoing as have been specified for this purpose as
contemplated by Section 3.01.
(3) Subject to Clause (2) above, any exchange of a Global Security
for other Securities may be made in whole or in part, and all
Securities issued in exchange for a Global Security or any portion
thereof shall be registered in such names as the Depositary for
such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security
or any portion thereof, whether pursuant to this Section, Section
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38
3.04, 3.06, 9.06 or 11.07 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Security, unless
such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
SECTION 3.06. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If
any mutilated Security is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly
issued hereunder.
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39
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Except as otherwise provided as contemplated by Section 3.01 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
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
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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
given to each Holder of Securities of such series in the manner set
forth in Section 1.06, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 3.08. PERSONS DEEMED OWNERS. Prior to due presentment of
a Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and any premium and (subject to
Section 3.07) any interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 3.09. CANCELLATION. All Securities surrendered for
payment, redemption, registration of transfer or exchange or for credit
against any sinking fund
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41
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee.
No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section except as expressly permitted
by this Indenture. All canceled Securities held by the Trustee shall be
disposed of in accordance with the Trustee's customary practices unless
otherwise directed by a Company Order.
SECTION 3.10. COMPUTATION OF INTEREST. Except as otherwise
specified as contemplated by Section 3.01 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a
360-day year of twelve 30-day months.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall cease to be of further effect (except as to any surviving
rights of registration of transfer or exchange of Securities herein expressly
provided for) upon the Trustee's receipt of a Company Request to that effect,
and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.06 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust,
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42
as provided in Section 10.03) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust money in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and any premium and interest
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;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.07, the
obligations of the Trustee to any Authenticating Agent under Section 6.14
and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, 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 MONEY. 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 (without
liability for
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43
the payment of interest thereon or the investment thereof) and applied by it,
in accordance with the provisions of the Securities and this Indenture, to
the payment of the principal and any premium and interest, 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, for
whose payment such money has been deposited with the Trustee.
ARTICLE V
REMEDIES
SECTION 5.01. EVENT OF DEFAULT. "Event of Default", wherever used
herein with respect to Securities of any series, means any one of the
following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this
Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of a series of Securities
other than that series), 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
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44
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; or
(5) a default by the Company or any of its Restricted Subsidiaries
under any bond, debenture, note or other evidence of indebtedness
for money borrowed (including a default with respect to Securities
of any series other than that series) in excess of $20,000,000,
under any capitalized lease which is treated under generally accepted
accounting principles as a consolidated liability in excess of
$20,000,000 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 in excess of $20,000,000, whether such
indebtedness or liability now exists or shall hereafter be created,
which default (i) consists of the failure to pay any indebtedness or
liability upon its stated maturity or (ii) shall have resulted in such
indebtedness or liability becoming or being declared due and payable
prior to the date on which it would otherwise have become due and
payable, without such acceleration having been rescinded or annulled,
or such indebtedness or liability having been discharged, within a
period of 30 days after there shall have 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 and requiring the Company to cause such acceleration to
be rescinded or annulled or cause such indebtedness or liability to be
discharged, and stating that such notice is a "Notice of Default"
hereunder; provided, however, that, subject to the provisions of
Sections 6.01 and 6.02, the Trustee shall not be deemed to have
knowledge of such default unless (A) a Responsible Officer of the
Trustee shall have actual knowledge of such default or (B) the
Trustee shall have received written notice thereof from the Company,
from any Holder, from the holder of any such indebtedness or from the
trustee under any such applicable debt instrument; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in
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45
respect of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
in respect of the Company under any applicable Federal or State law,
or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree
or order for relief or any such other decree or order unstayed and
in effect for a period of 60 consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or
State law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company
in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities of
that series (subject to any applicable cure or grace periods).
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in Section
5.01(6) or 5.01(7)) with
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46
respect to Securities of any series at the time Outstanding occurs and is
continuing, then 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 of all Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such
portion of the principal amount of such Securities as may be specified by the
terms thereof) to be due and payable immediately, by a notice in writing to
the Company (and to the Trustee, if given by Holders), and upon any such
declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in
Section 5.01(6) or 5.01(7) with respect to Securities of any series at the time
Outstanding occurs, the principal amount of all the Securities of that series
(or, if any Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified
by the terms thereof) shall automatically, and without any declaration or
other action on the part of the Trustee or any Holder, 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 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 and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in
such Securities, and
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(D) all sums paid or advanced by the Trustee hereunder and all amounts
owing the Trustee under Section 6.07; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of 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:
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the reasonable costs and expenses of
collection, including all amounts owing the Trustee under Section 6.07.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
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48
SECTION 5.04. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of any
judicial proceeding relative to the Company, its property or its creditors,
the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the
Trust Indenture Act in order to have claims of the Holders and the Trustee
allowed in any such proceeding. In particular, the Trustee shall be
authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it under Section 6.07.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding;
PROVIDED, HOWEVER, that the Trustee may, on behalf of the Holders, vote for
the election of a trustee in bankruptcy or similar official and be a member
of a creditors' or other similar committee.
SECTION 5.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of all
amounts owing the Trustee under Section 6.07, be for the ratable benefit of
the Holders of the Securities 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 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 any premium or interest, upon
presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
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49
FIRST: To the payment of all amounts due the Trustee under
Section 6.07; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal and any premium and interest, respectively.
SECTION 5.07. LIMITATION ON SUITS. No Holder of any Security of any
series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) 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;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of 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 itself 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
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enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all of such Holders.
SECTION 5.08. UNCONDITIONAL RIGHT OF HOLDER TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 3.07) interest on such Security on the respective Stated
Maturities expressed in such Security (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 has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.06, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT WAIVER. No delay or omission of
the Trustee or of any Holder of any Securities 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 or by law to the
Trustee or to the Holders may be
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51
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
SECTION 5.12. CONTROL BY HOLDERS. The Holders of 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
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(3) such direction shall not involve the Trustee in personal liability
or be unjustly prejudicial to Holders not joining therein.
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 the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default:
(1) in the payment of the principal of or any premium or interest on
any Security of such series; or
(2) 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 impair any right consequent thereon.
SECTION 5.14. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture, or in any suit against the
Trustee or any action taken, suffered or omitted by it as Trustee, a court
may
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require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs against any such party litigant, in
the manner and to the extent provided in the Trust Indenture Act; PROVIDED
that neither this Section nor the Trust Indenture Act shall be deemed to
authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Trustee or the Holders of 10% in
aggregate principal amount of Outstanding Securities of any series.
SECTION 5.15. 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.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. CERTAIN DUTIES AND RESPONSIBILITIES. The duties and
responsibilities of the Trustee shall be as provided by this Indenture and
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.02. NOTICE OF DEFAULTS. If a default occurs hereunder with
respect to Securities of any series, the Trustee shall give the Holders of
Securities of such series notice of such default as and to the extent
provided
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53
by the Trust Indenture Act; PROVIDED, HOWEVER, that in the case of any
default of the character specified in Section 5.01(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 60 days after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time
or both would become, an Event of Default with respect to Securities of such
series.
SECTION 6.03. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions
of Section 6.01:
(1) 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, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced
by a Board Resolution;
(3) 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;
(4) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses
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and liabilities which might be incurred by it in compliance with such
request or direction;
(6) 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, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 6.05. MAY HOLD SECURITIES. The Trustee, any Authenticating
Agent, any Paying Agent, any Security Registrar or any other agent of the
Company or the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to Sections 6.08 and 6.13,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or
such other agent.
SECTION 6.06. 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 or
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55
investment of any money received by it hereunder except as otherwise agreed
with the Company, and any interest on or investment of any money received by
it shall be for the exclusive benefit of the Company.
SECTION 6.07. COMPENSATION AND REIMBURSEMENT. The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except
to the extent that any such expense, disbursement or advance may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to defend and hold it harmless
against, any loss, liability or expense arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder or the performance of its duties hereunder, including
the reasonable 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, except to the extent any such
loss, liability or expense may be attributable to its negligence or
bad faith.
The Company's payment obligations pursuant to this Section 6.07 shall
survive the discharge of this Indenture.
"Trustee" for purposes of this Section 6.07 includes the Trustee,
every predecessor Trustee, any Paying Agent, Authenticating Agent, Registrar
or other agent of the Company or the Trustee appointed hereunder, but the
negligence or bad faith of any such person shall not affect the rights of any
other such person under this Section 6.07.
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56
SECTION 6.08. CONFLICTING INTERESTS. If the Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the extent and
in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture. To the extent permitted by such Act, the
Trustee shall not be deemed to have a conflicting interest by virtue of being
a trustee under this Indenture with respect to Securities of more than one
series.
SECTION 6.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at
all times be one (and only one) Trustee hereunder with respect to the
Securities of each series, which may be the Trustee hereunder for Securities
of one or more other series. Each Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person 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 with respect to the Securities of any series shall cease to
be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. No
resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance
of appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.11.
The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If
the instrument of acceptance by a successor Trustee required by Section 6.11
shall not have been delivered to the Trustee within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
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57
The Trustee may be removed at any time with respect to the Securities
of any series, with or without cause, by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series, or by notice
from the Company delivered to the Trustee and to the Holders.
If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after written
request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose
of rehabilitation,conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with respect
to all Securities and the appointment of a successor Trustee or Trustees.
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 reason,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 6.11. If, within
one year after such resignation, removal or incapability, or the occurrence
of such vacancy, a successor Trustee with respect to the
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Securities of any series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in
the manner required by Section 6.11, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
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 to all
Holders of Securities of such series in the manner provided 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 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.
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
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59
more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to
all Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee;
and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any 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 as may reasonably be required for more fully
and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in the first or second preceding
paragraph, 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.
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SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
PROVIDED such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company (or any
other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 6.14. APPOINTMENT OF AUTHENTICATING AGENT. 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 original issue and upon
exchange, registration of transfer or partial redemption thereof or pursuant
to Section 3.06, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by
an Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
shall be acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America,
any State thereof or the District of Columbia, authorized under such laws to
act as Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to
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supervision or examination by Federal or state authorities. If such
Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent; PROVIDED such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 1.06 to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named
as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be
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entitled to be reimbursed for such payments, subject to the provisions of
Section 6.07.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated herein referred
to in the Indenture.
MELLON BANK, N.A.,
As Trustee
by
As Authenticating Agent
by
-------------------------------------
Authorized Officer
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
HOLDERS. The Company will furnish or cause to be furnished to the Trustee:
(1) semiannually, not later than March 31 and September 30 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities of each series as of the
preceding March 16 or September 15, as the case may be, and
(2) at such other times as the Trustee may reasonably 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;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
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SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list furnished
to the Trustee as provided in Section 7.01 and the names and addresses of
Holders received by the Trustee in its capacity as Security Registrar. The
Trustee may destroy any list furnished to it as provided in Section 7.01 upon
receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 7.03. REPORTS BY TRUSTEE. The Trustee shall transmit to
Holders such reports, if any, concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
A copy of each such report shall at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 7.04. REPORTS BY COMPANY. The Company shall file with the
Trustee and the Commission, and transmit to Holders, such information, documents
and other reports, and such summaries thereof, as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant to such
Act; PROVIDED that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission.
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ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01. COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge with or into any other Person or
convey, transfer or lease all or substantially all of its properties and assets
substantially as an entirety to any Person, unless:
(1) either (a) the Company shall be the continuing corporation or
(b) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by
conveyance, transfer, or lease, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, in form satisfactory to the Trustee, the due and punctual payment
of the principal of and any premium and interest on all the Securities and
the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Company or any
Subsidiary in connection with or as a result of such transaction as having
been incurred at the time of such transaction), no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event
of Default, shall have occurred and be continuing;
(3) the Company or such Person has delivered to the Trustee a
Certificate and an Opinion of Counsel, as to which opinion counsel may rely
on the Officer's Certificate as to factual matters, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for or relating to such transaction have been
satisfied.
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SECTION 8.02. SUCCESSOR SUBSTITUTED. Upon any consolidation or
merger, or any conveyance, transfer or lease of the properties and assets of the
Company substantially as an entirety in accordance with Section 8.01, the
successor Person formed by such consolidation or into which the Company is
merged or the successor Person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein; and thereafter, except in the
case of a lease, the Company shall be discharged from all obligations and
covenants under this Indenture, the Agency Agreement and the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to
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permit or facilitate the issuance of Securities in bearer form, registrable
or not registrable as to principal, and with or without interest coupons,
or to permit or facilitate the issuance of Securities in uncertificated
form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities; PROVIDED that any
such addition, change or elimination (A) shall neither (i) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
or
(6) to secure the Securities pursuant to the requirements of
Section 10.06 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 2.01 and 3.01; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.11; or
(9) 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; PROVIDED that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect; or
(10) to add to or change or eliminate any provision of this Indenture
as shall be necessary or desirable in accordance with any amendments to the
Trust Indenture Act, provided such action shall not adversely affect the
interest of Holders of Securities of any series in any material respect.
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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
the Outstanding Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; PROVIDED, HOWEVER, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security or any other Security which would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.02, or change any Place of Payment when, or the coin
or currency in which, any Security or any premium or 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, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.10, except to increase any percentages set forth therein or to
provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Outstanding Security
affected thereby; PROVIDED, HOWEVER, that this clause shall not be deemed
to require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 10.10
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in accordance with the requirements of Sections 6.11 and 9.01(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to
Section 6.01) 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 INDENTURES. Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.05. CONFORMING WITH TRUST INDENTURE ACT. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
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 may, and shall if required by
the Trustee, bear a notation in form
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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 AND INTEREST. The
Company covenants and agrees for the benefit of each series of Securities that
it will duly and punctually pay the principal of and any premium and interest on
the Securities of that series in accordance with the terms of the Securities and
this Indenture.
SECTION 10.02. MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for
payment, 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. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to
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the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
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 Securities, it will, on or before each due date of the principal of or
any premium or interest on any of the Securities of that series, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to pay the principal and any premium and interest so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided
and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, 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 for any series of Securities
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, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
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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 or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company, or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease.
SECTION 10.04. STATEMENT BY OFFICERS AS TO DEFAULT.
(1) The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, a
Certificate stating whether or not, after a review under each signer's
supervision of the activities of the Company during such year and of the
Company's performance under this Indenture, to the best knowledge, based on such
review, of the signers thereof, the Company has fulfilled all its material
obligations under this Indenture throughout such year, and, if there has been a
default in the fulfillment of any such obligation, specifying each default and
the nature and status thereof.
(2) When any event has occurred and is continuing which is, or after
notice or lapse of time or both would become, an Event of Default, or if the
Trustee or any Holder or the Trustee for or the holder of any other evidence of
Indebtedness of the Company or any Subsidiary gives any notice or takes any
other action with respect to a claimed default, the Company shall deliver to the
Trustee by registered or certified mail or by telegram, telex or facsimile
transmission a Certificate specifying such event, notice or other action within
five Business Days of its actual notice of such default.
SECTION 10.05. 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 existence, rights (charter and statutory) and franchises;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the
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business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Holders.
SECTION 10.06. LIMITATION ON SECURED DEBT. The Company will not
create, assume, incur or guarantee, and will not permit any Restricted
Subsidiary to create, assume, incur or guarantee, any Secured Indebtedness
without making provision whereby all the Securities shall be secured equally and
ratably with (or prior to) such Secured Indebtedness (together with, if the
Company shall so determine, any other Indebtedness of the Company or such
Restricted Subsidiary then existing or thereafter created which is not
subordinate to the Securities) so long as such Secured Indebtedness shall be
outstanding unless such Secured Indebtedness, when added to (a) the aggregate
amount of all Secured Indebtedness then outstanding (not including in this
computation Secured Indebtedness if the Securities are secured equally and
ratably with (or prior to) such Secured Indebtedness and further not including
in this computation, any Secured Indebtedness which is concurrently being
retired and (b) the aggregate amount of all Attributable Debt then outstanding
pursuant to Sale and Leaseback Transactions entered into by the Company After
January 1, 1997, or entered into by a Restricted Subsidiary after January 1,
1997 or, if later, the date on which it became a Restricted Subsidiary (not
including in this computation any Attributable Debt which is concurrently being
retired), would not exceed 5% of total assets. In addition, the Company may
create, assume, incur or guarantee Secured Indebtedness, in an aggregate amount
not exceeding at any one time outstanding 20% of its finance receivables, in
connection with one or more Securitizations.
SECTION 10.07. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The
Company will not, and will not permit any Restricted Subsidiary to, enter into
any Sale and Leaseback Transaction unless (a) the sum of (i) the Attributable
Debt to be outstanding pursuant to such Sale and Leaseback Transaction, (ii) all
Attributable Debt then outstanding pursuant to all other Sale and Leaseback
Transactions entered into by the Company after January 1, 1997, or entered into
by a Restricted Subsidiary after January 1, 1997 or, if later, the date on which
it became a Restricted Subsidiary, and (iii) the aggregate of all Secured
Indebtedness then outstanding (not including in this computation Secured
Indebtedness if the Securities are secured equally and ratably with (or prior
to) such Secured Indebtedness and any Secured Indebtedness issued in connection
with one or more Securitizations as permitted by
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Section 10.06) would not exceed 5% of total assets or (b) an amount equal to
the greater of (i) the net proceeds to the Company or the Restricted
Subsidiary of the sale of the Principal Property sold and leased back
pursuant to such Sale and Leaseback Transaction and (ii) the amount of
Attributable Debt to be outstanding pursuant to such Sale and Leaseback
Transaction is applied to the retirement of Funded Debt of the Company or any
Restricted Subsidiaries (other than Funded Debt which is subordinate to the
Securities or which is owing to the Company or any Restricted Subsidiaries)
within 180 days after the consummation of such Sale and Leaseback Transaction.
SECTION 10.08. WAIVER OF CERTAIN COVENANTS. Except as otherwise
specified as contemplated by Section 3.01 for Securities of such series, the
Company may, with respect to the Securities of any series, omit in any
particular instance to comply with any term, provision or condition set forth in
any covenant provided pursuant to Section 3.01(18), 9.01(2) or 9.01(7) for the
benefit of the Holders of such series or Sections 10.06 and 10.07, if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities of such series shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
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 such Securities) in accordance with this Article.
SECTION 11.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election
of the Company to redeem any Securities shall be evidenced by a Board Resolution
or in another manner specified as contemplated by Section 3.01 for
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such Securities. In case of any redemption at the election of the Company of
less than all the Securities of any series (including any such redemption
affecting only a single Security), the Company shall, at least 60 days prior
to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of
any redemption of Securities prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction.
SECTION 11.03. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If
less than all the Securities of any series are to be redeemed (unless all the
Securities of such series and of a specified tenor are to be redeemed or unless
such redemption affects only a single Security), 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 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 a portion
of the principal amount of any Security of such series; PROVIDED that the
unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), 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 and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in the case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting a single Security, whether such Security is
to be redeemed in whole or in part. In the case of any such redemption in
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part, the unredeemed portion of the principal amount of the Security shall be
in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 11.04. NOTICE OF REDEMPTION. Notice of redemption shall be
given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price and any accrued interest;
(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities the principal amounts) of the particular Securities to be
redeemed and, if a single Security is to be partially redeemed, the
principal amount of such Security to be redeemed;
(4) that on the Redemption Date the Redemption Price and any
accrued interest will become due and payable upon each such Security
to be redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date (unless the Company shall default in the
payment of the Redemption Price and accrued interest);
(5) the place or places where each such Security is to be
surrendered for payment of the Redemption Price and any accrued
interest; and
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(6) that the redemption is for a sinking fund, if such is the
case.
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 and shall be irrevocable.
SECTION 11.05. DEPOSIT OF REDEMPTION PRICE. Prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
SECTION 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, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price, together with accrued interest to the
Redemption Date PROVIDED, HOWEVER, that, unless otherwise specified as
contemplated by Section 3.01, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 3.07.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
SECTION 11.07. SECURITIES REDEEMED IN PART. Any Security which is to
be redeemed only in part 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
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or his attorney duly authorized in writing), and the Company shall execute,
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and
of like tenor, of any authorized denomination as requested by such Holder, in
an aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 12.01. APPLICABILITY OF ARTICLE. The provisions of this
Article shall be applicable to any sinking fund for the retirement of Securities
of any series except as otherwise specified as contemplated by Section 3.01 for
such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities 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 is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of
any 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 as provided for by the terms of such Securities.
SECTION 12.02. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Outstanding Securities of a series (other than any
previously called for redemption) and (2) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to any
Securities of such series required to be made pursuant to the terms of such
Securities as and to the extent provided for by the terms of such Securities;
PROVIDED that the Securities to be so credited have not been previously so
credited. The Securities to be so credited shall be received and credited for
such purpose by the Trustee at the Redemption Price, as specified in the
Securities so to be redeemed, for
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redemption through operation of the sinking fund and the amount of such
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 any Securities, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for such Securities pursuant to
the terms of such Securities, the portion thereof, if any, which is to be
satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities pursuant to Section 12.02 and
will also deliver to the Trustee any Securities to be so delivered. Not less
than 30 days prior to 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
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.01. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE. The Company may elect, at its option at any time, to have
Section 13.02 or Section 13.03 applied to any Securities or any series of
Securities, as the case may be, designated pursuant to Section 3.01 as being
defeasible pursuant to such Section 13.02 or 13.03, in accordance with any
applicable requirements provided pursuant to Section 3.01 and upon compliance
with the conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 3.01 for such Securities.
SECTION 13.02. DEFEASANCE AND DISCHARGE. Upon the Company's exercise
of its option (if any) to have this Section applied to any Securities or any
series of Securities, as the case may be, the Company shall be deemed to have
been discharged from its obligations with respect to such Securities as provided
in this Section on and after the
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date the conditions set forth in Section 13.04 are satisfied (hereinafter
called "Defeasance"). For this purpose, such Defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), subject to the
following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of such Securities to receive, solely
from the trust fund described in Section 13.04 and as more fully set forth in
such Section, payments in respect of the principal of and any premium and
interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 3.04, 3.05, 3.06,
10.02 and 10.03, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (4) this Article. Subject to compliance with this
Article, the Company may exercise its option (if any) to have this Section
applied to any Securities notwithstanding the prior exercise of its option
(if any) to have Section 13.03 applied to such Securities.
SECTION 13.03. COVENANT DEFEASANCE. Upon the Company's exercise of
its option (if any) to have this Section applied to any Securities or any series
of Securities, as the case may be, (1) the Company shall be released from its
obligations under Section 8.01, Sections 10.05 and 10.07, and any covenants
provided pursuant to Section 3.01(18), 9.01(2) or 9.01(7) for the benefit of the
Holders of such Securities and (2) the occurrence of any event specified in
Sections 5.01(4) (with respect to any of Section 8.01(3), Sections 10.06 through
10.07, inclusive, and any such covenants provided pursuant to Section 3.01(18),
9.01(2) or 9.01(7)), 5.01(5) and 5.01(8) shall be deemed not to be or result in
an Event of Default, in each case with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 13.04 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to such Securities, 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 specified Section (to the extent
so specified in the case of Section 5.01(4)), whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of any
reference in any such Section to any other provision herein or in any
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other document, but the remainder of this Indenture and such Securities shall
be unaffected thereby.
SECTION 13.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The
following shall be the conditions to the application of Section 13.02 or
Section 13.03 to any Securities or any series of Securities, as the case may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 6.09 and agrees to comply with the
provisions of this Article 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, (A) money in an amount, or (B) U.S. Government Obligations
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, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the
account of the holder of such depositary receipt, or with respect to any
such payment of principal of or interest on any U.S. Government
<PAGE>
81
Obligation which is so specified and held; PROVIDED that (except as
required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depositary receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by
such depositary receipt.
(2) In the event of an election to have Section 13.02 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this instrument,
there has been a change in applicable Federal income tax law, in either
case (A) or (B) to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Securities will not recognize gain or
loss for Federal income tax purposes as a result of the deposit, Defeasance
and discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) In the event of an election to have Section 13.03 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit and Covenant Defeasance
were not to occur.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities
<PAGE>
82
shall have occurred and be continuing at the time of such deposit or, with
regard to any such event specified in Section 5.01(6) and (7), at any time
on or prior to the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after
such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act.
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee a Certificate
stating that all conditions precedent with respect to such Defeasance or
Covenant Defeasance have been complied with.
SECTION 13.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; MISCELLANEOUS PROVISIONS. Subject to the provisions of the last
paragraph of Section 10.03, all money and U.S. Government Obligations (including
the proceeds thereof) deposited with the Trustee pursuant to Section 13.04 in
respect of any Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 13.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge
<PAGE>
83
which by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 13.04
with respect to any Securities 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 the Defeasance or Covenant
Defeasance, as the case may be, with respect to such Securities.
SECTION 13.06. REINSTATEMENT. If the Trustee or the Paying Agent is
unable to apply any money in accordance with this Article with respect to any
Securities by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the obligations under this Indenture and such Securities from which the Company
has been discharged or released pursuant to Section 13.02 or 13.03 shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article with respect to such Securities, until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to
Section 13.05 with respect to such Securities in accordance with this Article;
PROVIDED, HOWEVER, that if the Company makes any payment of principal of or any
premium or interest on any such Security following such reinstatement of its
obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.
-------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE>
84
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
MERCURY FINANCE COMPANY
by
[SEAL] -----------------------------------
Title
Attest:
- ---------------------------------
MELLON BANK, N.A.
[SEAL] by
-------------------------------------
Title:
Attest:
- ---------------------------------
Title:
<PAGE>
85
STATE OF )
) ss.:
COUNTY OF )
On the day of , before me personally came ,
to me known, who, being by me duly sworn, did depose and say that he is
of Mercury Finance Company one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and that he
signed his name thereto by like authority.
------------------------------------
STATE OF )
) ss.:
COUNTY OF )
On the day of , before me personally came ,
to me known, who, being by me duly sworn, did depose and say that he is
of Mellon Bank, N.A., one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and that he
signed his name thereto by like authority.
------------------------------------
<PAGE>
EXHIBIT 5
December 13, 1996
Mercury Finance Company
100 Field Drive, Suite 340
Lake Forest, Illinois 60070
Re: REGISTRATION OF DEBT SECURITIES ON FORM S-3
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement") being filed by Mercury Finance Company (the "Company") with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), relating to the shelf registration of
$500,000,000 aggregate principal amount of the Company's debt securities (the
"Debt Securities"). The Debt Securities are to be issued from time to time in
one or more series under an Indenture to be dated as of January 1, 1997 (the
"Indenture") between the Company and Mellon Bank, N.A., as Trustee (the
"Trustee").
We have reviewed resolutions adopted on October 11, 1996 by the Company's
Board of Directors which authorize and approve the issuance of the Debt
Securities with such terms and in such manner as may be determined from time to
time by certain officers ("Authorized Officers") and which empower the
Authorized Officers, among other things, (i) to approve and authorize the form,
terms, execution and delivery of the Indenture, and (ii) to file the
Registration Statement. Such resolutions are referred to herein as "Authorizing
Resolutions." The resolutions which the Authorized Officers must hereafter
adopt in accordance with the Authorizing Resolutions and Articles Two and Three
of the Indenture in order to establish the terms and manner of issuance of any
series of the Debt Securities are referred to herein as "Series Resolutions."
We have reviewed such other records and documents as we have deemed necessary in
order to enable us to express the opinion stated herein. In rendering such
opinion we have assumed without investigation that the information supplied to
us by the Company is accurate and valid and that the Indenture
<PAGE>
December 13, 1996
Page 2
in the form in which it is executed and delivered will not contain any material
change from the proposed form of Indenture originally filed as an exhibit to the
Registration Statement.
Based on the foregoing, we are of the opinion that the Debt Securities of
any series will be legally issued and binding obligations of the Company (except
as may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws affecting the enforcement of
creditors' rights generally or by the effect of general principles of equity,
whether in a proceeding in equity or at law) when (i) the Registration
Statement, as finally amended (including all necessary post-effective
amendments), shall have become effective under the Act; (ii) the Indenture has
been duly executed and delivered by the parties thereto; (iii) the form and
terms of such Debt Securities have been determined as prescribed in accordance
with Articles Two and Three of the Indenture and the Authorizing Resolutions,
(iv) the appropriate Series Resolutions have been duly adopted by the Authorized
Officers, (v) such Debt Securities have been duly executed by the Company,
authenticated by the Trustee and sold by the Company, and (vi) the Company has
received the prescribed consideration for the issuance of such Debt Securities,
all in accordance with terms and conditions of the Indenture, the Authorizing
Resolutions and the Series Resolutions and in the manner contemplated by the
Registration Statement.
For purposes of this opinion, we have assumed that there will be no changes
in the laws currently applicable to the Company and that such laws will be the
only laws applicable to the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Validity
of Offered Debt Securities" in the Prospectus and any Prospectus Supplement
relating to the Registration Statement reviewed and approved by us prior to
the distribution of such Prospectus Supplement and filing thereof with the
Commission.
Very truly yours,
/s/ McDermott, Will & Emery
<PAGE>
[LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Mercury Finance Company
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
December 13, 1996
Chicago, Illinois
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM T-1
-----------------------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS
TRUSTEE
-----------------------
Check if an application to determine eligibility of
a Trustee pursuant to Section 305(b)(2) /x/
MELLON BANK, N.A.
(Name of Trustee)
25-0659306 U.S.
(I.R.S. Employer Identification No.) (Jurisdiction of incorporation)
One Mellon Bank Center
Pittsburgh, PA 15258-0001
(Address of Principal Executive Office)
ELAINE D. RENN
Vice President
MELLON BANK, N.A.
ONE MELLON BANK CENTER
PITTSBURGH, PENNSYLVANIA 15258-0001
(412) 234-4694
(Name, Address and Telephone Number of Agent for Service)
-----------------------
MERCURY FINANCE COMPANY
(Name of Obligor)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
36-3627010
(I.R.S. Employer Identification No.)
100 Field Drive, Suite 340, Lake Forest, Illinois 60070
(Address of Principal Executive Offices)
DEBT SECURITIES
(Title of 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.
Federal Reserve Bank of Cleveland Cleveland, Ohio
Federal Deposit Insurance Corporation Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
The obligor is not an affiliate of the trustee.
ITEMS 3-15 ARE NOT APPLICABLE SINCE THE OBLIGOR IS NOT IN DEFAULT ON SECURITIES
ISSUED UNDER INDENTURES UNDER WHICH THE APPLICANT IS TRUSTEE.
16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
Exhibit 1 - Copy of articles of association of the trustee as now in
effect, filed as Exhibit 1 to trustee's statement of
eligibility and qualification, Registration No. 33-46990,
and incorporated herein by reference.
Exhibit 2 - Copy of certificate of the authority of the trustee to
commence business, copy of certificate of consolidation
with the Union Trust Company of Pittsburgh and copy of
certificate approving merger of Mellon National Bank and
Trust Company into Mellon Bank, N.A. filed as
Exhibit T1A(b) to trustee's statement of eligibility and
qualification, Registration No. 33-13020, and
incorporated herein by reference.
Exhibit 3 - Copy of certificate as to authority of the trustee to
exercise corporate trust powers, filed as Exhibit T1A(c)
to trustee's statement of eligibility and qualification,
Registration No. 33-13020, and incorporated herein by
reference.
Exhibit 4 - Copy of existing by-laws of the trustee, filed as
Exhibit 4 to trustee's statement of eligibility and
qualification, Registration No. 33-46990, and
incorporated herein by reference.
Exhibit 5 - Copy of each indenture referred to in Item 4, if the
obligor is in default. Not Applicable.
Exhibit 6 - Consent of the trustee required by Section 321(b) of the
Act, filed as Exhibit T1D to trustee's statement of
eligibility and qualification, Registration No. 33-13020,
and incorporated herein by reference.
Exhibit 7 - Copy of the latest report of condition of the trustee
transmitted electronically pursuant to law or the
requirements of its supervising or examining authority.
1
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, THE
TRUSTEE, MELLON BANK, N.A., A NATIONAL BANKING ASSOCIATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY CAUSED THIS
STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF PITTSBURGH, AND COMMONWEALTH OF
PENNSYLVANIA, ON THE 10TH DAY OF December 1996.
MELLON BANK, N.A.
TRUSTEE
By: /s/ Elaine D. Renn
--------------------------
Elaine D. Renn
Vice President
2
<PAGE>
EXHIBIT 7
REPORT OF CONDITION
CONSOLIDATING DOMESTIC AND FOREIGN SUBSIDIARIES OF
MELLON BANK, N.A.
FOR SEPTEMBER 30, 1996
IN THE COMMONWEALTH OF PENNSYLVANIA, AT THE CLOSE OF BUSINESS ON
SEPTEMBER 30, 1996; TRANSMITTED ELECTRONICALLY IN RESPONSE TO CALL MADE BY
COMPTROLLER OF THE CURRENCY, UNDER TITLE 12, UNITED STATES CODE, SECTION 161.
CHARTER NO. 6301 NORTHEASTERN DISTRICT
STATEMENT OF RESOURCES AND LIABILITIES
(in thousands)
<TABLE>
<S> <C> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin. . . . . . . . . . . . $ 3,038,315
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . 1,123,326
Securities:
Held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . 2,272,716
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . 4,028,040
Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . 419,918
Securities purchased under agreements to resell . . . . . . . . . . . . . 0
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . . . $ 24,231,179
LESS: Allowance for loan and lease losses . . . . . . . . 316,799
Loans and leases, net of unearned income, allowance,
and reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,914,380
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . . . 192,405
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . 481,417
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,290
Customers' liability to this bank on acceptances outstanding . . . . . . . . . 231,428
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,432,788
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,436,509
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . 38,625,532
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,404,306
Noninterest-bearing. . . . . . . . . . . . . . . . 7,983,023
Interest-bearing . . . . . . . . . . . . . . . . . 17,421,283
In foreign offices, Edge and Agreement subsidiaries, and IBFs . . . . . . 3,447,198
Noninterest-bearing. . . . . . . . . . . . . . . . 14,824
Interest-bearing . . . . . . . . . . . . . . . . . 3,432,374
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . 1,818,035
Securities sold under agreements to repurchase. . . . . . . . . . . . . . 272,800
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . 750,000
Trading liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179,006
Other borrowed money:
With remaining maturity of one year or less . . . . . . . . . . . . . . . 1,276,952
With remaining maturity of more than one year . . . . . . . . . . . . . . 466,772
Mortgage indebtedness and obligations under capitalized leases . . . . . . . . 2,337
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . 231,428
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . 947,609
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 722,451
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . 35,518,894
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,285
Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . 831,676
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . 2,136,597
Net unrealized holding gains (losses) on available-for-sale securities . . . . (22,114)
Cumulative foreign currency translation adjustments. . . . . . . . . . . . . . (6,806)
TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . 3,106,638
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL. 38,625,532
</TABLE>
3
<PAGE>
I, Michael K. Hughey, Senior Vice President and Corporate Controller of the
above-named bank, do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
Michael K. Hughey
November 5, 1996
We, the undersigned directors, attest to the correctness of this Statement
of Resources and Liabilities. We declare that it has been examined by us, and
to the best of our knowledge and belief has been prepared in conformance with
the instructions and is true and correct.
FRANK V. CAHOUET
W. KEITH SMITH
CHARLES A. CORRY
4
