UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended January 31, 1998
Commission file number 1-12006
FINANCIAL FEDERAL CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 88-0244792
(State of incorporation) (I.R.S. Employer Identification Number)
400 Park Avenue, New York, NY 10022
(Address of principal executive offices)
(Zip code)
(212) 888-3344
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
----- -----
At March 9, 1998, 14,820,930 shares of the Registrant's common stock, $.50
par value, were outstanding.
1
<PAGE>
FINANCIAL FEDERAL CORPORATION
AND SUBSIDIARIES
Quarterly Report on Form 10-Q
for the quarter ended January 31, 1998
INDEX
Part I - Financial Information
Page No.
Item 1 Financial Statements - FINANCIAL FEDERAL CORPORATION AND
SUBSIDIARIES
Consolidated Balance Sheet at January 31, 1998 (unaudited)
and July 31, 1997 (audited) 3
Consolidated Statement of Operations and Retained Earnings
for the three and six month periods ended January 31, 1998
and 1997 (unaudited) 4
Consolidated Statement of Cash Flows for the six month
periods ended January 31, 1998 and 1997 (unaudited) 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-9
Part II - Other Information
Item 4 Submission of matters to a vote of security holders 9
Item 6 Exhibits and Reports on Form 8-K 9
2
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<TABLE>
FINANCIAL FEDERAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands)
<CAPTION>
January 31, 1998
(Unaudited) July 31, 1997 *
---------- -------------
ASSETS
<S> <C> <C>
Cash $2,110 $2,532
Finance receivables 660,347 581,363
Less allowance for possible losses (11,701) (10,303)
-------- --------
Finance receivables - net 648,646 571,060
Other assets 1,458 1,172
-------- --------
TOTAL ASSETS $652,214 $574,764
======== ========
LIABILITIES
Senior debt:
Short - term $25,967 $4,681
Long - term ($26,382 at January 31, 1998 and $16,986
at July 31, 1997 due to related parties) 484,971 434,680
Accrued interest, taxes and other liabilities 12,895 16,224
Subordinated debentures ($2,181 at January 31, 1998
and July 31, 1997 due to related parties) 2,290 2,290
Deferred income taxes 12,285 11,285
-------- --------
Total liabilities 538,408 469,160
-------- --------
STOCKHOLDERS' EQUITY
Common stock 7,404 7,382
Additional paid-in capital 57,571 57,315
Warrants 29 29
Retained earnings 48,802 40,878
-------- --------
Total stockholders' equity 113,806 105,604
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $652,214 $574,764
======== ========
<FN>
* Reproduced from balance sheet included in the 1997 Annual Report to Stockholders.
The notes to consolidated financial statements are made a part hereof.
</FN>
3
</TABLE>
<PAGE>
<TABLE>
FINANCIAL FEDERAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
AND RETAINED EARNINGS (UNAUDITED)
(In Thousands, Except Share Amounts)
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
------------------- -------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Finance income $17,622 $13,356 $33,991 $25,886
Interest expense 8,087 5,609 15,316 10,756
------- ------- ------- -------
Finance income before provision for possible losses
on finance receivables 9,535 7,747 18,675 15,130
Provision for possible losses on finance receivables 800 625 1,425 1,150
------- ------- ------- -------
Net finance income 8,735 7,122 17,250 13,980
Salaries and other expenses 2,114 2,026 4,296 4,054
------- ------- ------- -------
Earnings before income taxes 6,621 5,096 12,954 9,926
Provision for income taxes 2,571 1,962 5,030 3,820
------- ------- ------- -------
NET EARNINGS 4,050 3,134 7,924 6,106
Retirements of treasury stock (219) (463)
Retained earnings - beginning of period 44,752 33,621 40,878 30,893
------- ------- ------- -------
RETAINED EARNINGS - END OF PERIOD $48,802 $36,536 $48,802 $36,536
======= ======= ======= =======
Earnings per common share:
Diluted $0.25 $0.19 $0.48 $0.38
===== ===== ===== =====
Basic $0.27 $0.21 $0.54 $0.41
===== ===== ===== =====
<FN>
The notes to consolidated financial statements are made a part hereof.
</FN>
4
</TABLE>
<PAGE>
<TABLE>
FINANCIAL FEDERAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In Thousands)
<CAPTION>
Six Months Ended
January 31,
--------------------
1998 1997
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $7,924 $6,106
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 115 105
Provision for possible losses on finance receivables 1,425 1,150
Amortization of deferred origination costs 2,291 1,986
Deferred income taxes 1,000 930
Decrease (increase) in other assets (182) 84
(Decrease) in accrued interest, taxes and other
liabilities (3,329) (2,085)
------- --------
Net cash provided by operating activities 9,244 8,276
------- --------
Cash flows from investing activities:
Finance receivables:
Originated (271,818) (220,204)
Collected 190,516 148,745
Other (219) (122)
------- -------
Net cash (used in) investing activities (81,521) (71,581)
------- -------
Cash flows from financing activities:
Commercial paper:
Maturities 90 days or less (net) 6,181 17,084
Maturities greater than 90 days:
Proceeds 59,085 83,712
Repayments (61,255) (47,267)
Bank borrowings (net) (5,225) 17,880
Proceeds from medium term notes 55,000
Proceeds from term loan - bank 10,000
Proceeds from variable rate senior term notes 7,791
Repayments of subordinated debentures (4,667)
Acquisitions of treasury stock (1,630)
Proceeds from exercise of stock options 278 54
Tax benefit relating to stock options 10
------- -------
Net cash provided by financing activities 71,855 65,176
------- -------
NET INCREASE (DECREASE) IN CASH (422) 1,871
Cash - beginning of period 2,532 2,426
------- -------
CASH - END OF PERIOD $2,110 $4,297
======= =======
Supplemental disclosures of cash flow information:
Interest paid $14,777 $9,936
======= =======
Income taxes paid $3,877 $2,808
======= =======
<FN>
The notes to consolidated financial statements are made a part hereof.
</FN>
5
</TABLE>
<PAGE>
FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
In the opinion of the management of Financial Federal Corporation and
Subsidiaries (the "Company"), the accompanying consolidated financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position as at January
31, 1998, and the results of operations and cash flows for the three and six
month periods ended January 31, 1998 and 1997. These condensed financial
statements should be read in conjunction with the consolidated financial
statements and note disclosures included in the Company's Annual Report on
Form 10-K for the year ended July 31, 1997. The consolidated results of
operations for the three and six month periods ended January 31, 1998 and 1997
are not necessarily indicative of the results for the respective full years.
NOTE 2 - EARNINGS PER COMMON SHARE
The Company has adopted Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earnings Per Share." This standard replaced the presentation of
primary and fully diluted earnings per share (both included the effects of
dilutive stock options and warrants) with basic and diluted earnings per share
for all periods presented. Under SFAS 128, basic earnings per share is
calculated by dividing net earnings by the weighted average number of common
shares outstanding during the period, and diluted earnings per share is
calculated by dividing net earnings by the weighted average number of common
shares outstanding and the effect of dilutive stock options and warrants
during the period. Earnings per common share was calculated as follows (in
thousands except per share amounts):
Three months ended Six months ended
January 31, January 31,
----------------- ----------------
1998 1997 1998 1997
------ ------ ------ ------
Net earnings $4,050 $3,134 $7,924 $6,106
Weighted average common shares
outstanding 14,795 14,771 14,782 14,809
Effect of dilutive securities:
Warrants 1,383 1,187 1,363 1,164
Stock options 322 134 307 122
------ ------ ------ ------
Weighted average common shares
and dilutive stock options
and warrants outstanding 16,500 16,092 16,452 16,095
====== ====== ====== ======
Diluted net earnings per common
share $0.25 $0.19 $0.48 $0.38
===== ===== ===== =====
Basic net earnings per common
share $0.27 $0.21 $0.54 $0.41
===== ===== ===== =====
NOTE 3 - LONG-TERM DEBT
At January 31, 1998, the Company had $297.5 million of committed unsecured
revolving credit facilities expiring after one year with various banks. Long-
term debt of $485.0 million at January 31, 1998 comprised $58.9 million of
borrowings under these facilities, $238.6 million of commercial paper and
short-term bank borrowings supported by these facilities and $187.5 million of
term notes payable.
In January 1998, the Company established a $100.0 million 144A Medium-Term
Note Program, rated 'BBB' by Fitch IBCA and Duff & Phelps Credit Rating Co.,
and issued $55.0 million of notes thereunder, with interest payable semi-
annually, as follows (dollars in millions):
Amount Term Maturity Rate
------ -------- ---------------- -----
$30.0 5 years January 29, 2003 6.45%
20.0 7 years January 31, 2005 6.68
5.0 10 years January 29, 2008 6.80
6
<PAGE>
PART I
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Comparison of Three Months Ended January 31, 1998 to Three Months Ended
January 31, 1997
- -----------------------------------------------------------------------
Finance income increased 32% to $17.6 million in the second quarter of fiscal
1998 from $13.4 million in the second quarter of fiscal 1997. The increase
was primarily the result of the $155 million, or 32%, increase in average
finance receivables outstanding to $644 million in the second quarter of
fiscal 1998 from $489 million in the second quarter of fiscal 1997. Finance
receivables booked in the second quarter of fiscal 1998 increased 25% to $141
million from $112 million in the second quarter of fiscal 1997 primarily as a
result of the expansion of the Company's marketing efforts into new geographic
areas (primarily in the West) and further penetration in its existing areas
(primarily in the Southeast).
Interest expense, incurred on borrowings used to fund finance receivables,
increased by 44% to $8.1 million in the second quarter of fiscal 1998 from
$5.6 million in the second quarter of fiscal 1997. The increase was primarily
due to the 38% increase in average debt outstanding in the second quarter of
fiscal 1998 from the second quarter of fiscal 1997 and, to a lesser extent,
the slight increases in average market interest rates and the Company's cost
of funds due to the $50.0 million of term debt issued in July 1997.
Finance income before provision for possible losses on finance receivables
increased by 23% to $9.5 million in the second quarter of fiscal 1998 from
$7.7 million in the second quarter of fiscal 1997. Finance income before
provision for possible losses, expressed as a percentage of average finance
receivables outstanding, decreased to 5.9% in the second quarter of fiscal
1998 from 6.3% in the second quarter of fiscal 1997 primarily due to the
Company's higher debt-to-equity ratio, 4.5 at January 31, 1998 compared to 3.9
at January 31, 1997, and to the slight overall increase in interest costs.
The provision for possible losses on finance receivables increased by 28% to
$800,000 in the second quarter of fiscal 1998 from $625,000 in the second
quarter of fiscal 1997. The increase was primarily due to the increase in
finance receivables. The allowance for possible losses, which increased to
$11.7 million at January 31, 1998 from $9.0 million at January 31, 1997, was
1.8% of finance receivables at January 31, 1998 and 1997. The allowance is
periodically reviewed by the Company's management and is estimated based on
management's current assessment of the risks inherent in the Company's finance
receivables from national and regional economic conditions, industry
conditions, concentrations, the financial condition of counterparties and
other factors. Future additions to the allowance may be necessary based on
changes in these factors. Non-performing finance receivables were $5.6
million, or 0.8% of total finance receivables, at January 31, 1998, compared
to $5.4 million, or 1.1% of total finance receivables, at January 31, 1997.
Salaries and other expenses increased by 4% to $2.1 million in the second
quarter of fiscal 1998 from $2.0 million in the second quarter of fiscal 1997
primarily due to the increase in the number of employees and salary increases.
Net earnings increased by 29% to $4.1 million in the second quarter of fiscal
1998 from $3.1 million in the second quarter of fiscal 1997. Diluted earnings
per share increased by 32% to $0.25 per share in the second quarter of fiscal
1998 from $0.19 per share in the second quarter of fiscal 1997 and basic
earnings per share increased by 29% to $0.27 per share in the second quarter
of fiscal 1998 from $0.21 per share in the second quarter of fiscal 1997.
Comparison of Six Months Ended January 31, 1998 to Six Months Ended
January 31, 1997
- -------------------------------------------------------------------
Finance income increased 31% to $34.0 million in the first half of fiscal 1998
from $25.9 million in the first half of fiscal 1997. The increase was
primarily the result of the $147 million, or 31%, increase in average finance
receivables outstanding to $619 million in the first half of fiscal 1998 from
$472 million in the first half of fiscal 1997. Finance receivables booked in
the first half of fiscal 1998 increased 24% to $270 million from $218 million
in the first half of fiscal 1997 primarily as a result of the expansion of the
Company's marketing efforts into new geographic areas (primarily in the West)
and further penetration in its existing areas (primarily in the Southeast).
7
<PAGE>
Interest expense, incurred on borrowings used to fund finance receivables,
increased by 42% to $15.3 million in the first half of fiscal 1998 from $10.8
million in the first half of fiscal 1997. The increase was primarily due to
the 37% increase in average debt outstanding in the first half of fiscal 1998
from the first half of fiscal 1997 and, to a lesser extent, the slight
increases in average market interest rates and the Company's cost of funds due
to the $50.0 million of term debt issued in July 1997.
Finance income before provision for possible losses on finance receivables
increased by 23% to $18.7 million in the first half of fiscal 1998 from $15.1
million in the first half of fiscal 1997. Finance income before provision for
possible losses, expressed as a percentage of average finance receivables
outstanding, decreased to 6.0% in the first half of fiscal 1998 from 6.4% in
the first half of fiscal 1997 primarily due to the Company's higher debt-to-
equity ratio, 4.5 at January 31, 1998 compared to 3.9 at January 31, 1997, and
to the slight overall increase in interest costs.
The provision for possible losses on finance receivables increased by 24% to
$1.4 million in the first half of fiscal 1998 from $1.2 million in the first
half of fiscal 1997. The increase was primarily due to the increase in
finance receivables.
Salaries and other expenses increased by 6% to $4.3 million in the first half
of fiscal 1998 from $4.1 million in the first half of fiscal 1997 primarily
due to the increase in the number of employees and salary increases, partially
offset by the reduction in overhead costs that resulted from the relocation of
the Company's machine tool division into the Company's Charlotte, NC office in
November 1996.
Net earnings increased by 30% to $7.9 million in the first half of fiscal 1998
from $6.1 million in the first half of fiscal 1997. Diluted earnings per
share increased by 26% to $0.48 per share in the first half of fiscal 1998
from $0.38 per share in the first half of fiscal 1997 and basic earnings per
share increased by 32% to $0.54 per share in the first half of fiscal 1998
from $0.41 per share in the first half of fiscal 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company is dependent upon the continued availability of funds primarily to
originate or acquire finance receivables and to purchase portfolios of finance
receivables. The Company may obtain required funds from a variety of sources,
including internal generation, direct issuance of and dealer placed commercial
paper, borrowings under revolving credit facilities, placements of term debt
and sales of common and preferred equity. Management believes that the
Company has available sufficient liquidity to support its operations.
The Company issues investment grade commercial paper directly and through a
program with recognized commercial paper dealers. The Company increased the
size of the program by $100 million in February 1998 to $350 million.
Commercial paper outstanding at January 31, 1998 was $248.6 million. The
Company's commercial paper is unsecured and matures within 270 days.
Increases in commercial paper are generally offset by decreases in bank
borrowings, and vice versa. The Company's policy is to maintain committed
revolving credit facilities from banks so that the aggregate amount available
thereunder exceeds commercial paper outstanding.
At January 31, 1998, the Company had $117.5 million of short-term committed
unsecured revolving credit facilities with various banks under which $16.0
million was outstanding, and $297.5 million of long-term committed unsecured
revolving credit facilities with various banks under which $58.9 million was
outstanding.
At January 31, 1998, the Company had $45.0 million available under its 144A
Medium-Term Note Program.
8
<PAGE>
OTHER
The Company has reviewed its various computer applications and systems and has
determined that they are primarily Year 2000 compliant. Therefore, the future
costs to the Company for becoming Year 2000 compliant are not expected to be
significant.
FORWARD-LOOKING STATEMENTS
The above discussion contains forward-looking statements that involve risks
and uncertainties. The Company's actual results could differ materially from
those anticipated by such forward-looking statements due to the impact of
many factors outside the Company's control including economic, geographic and
industry conditions, fluctuations in market interest rates, prepayments,
competitive conditions and changes in existing laws or regulations.
PART II
Item 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Stockholders held on December 9, 1997, the
following nominees (followed by the total number of votes for and votes
abstained) were elected to the Board of Directors: Lawrence B. Fisher,
12,898,385, 368,745; William C. MacMillen, Jr., 12,927,035, 340,095; Bernard
G. Palitz, 12,898,385, 368,745; Clarence Y. Palitz, Jr., 12,898,385, 368,745;
Michael C. Palitz, 12,898,385, 368,745 and Paul R. Sinsheimer, 12,898,385,
368,745.
The proposal for the appointment of Eisner & Lubin LLP as independent auditors
of the Company and its subsidiaries for the fiscal year ending July 31, 1998
was ratified at the Annual Meeting. A total of 13,167,330 shares were voted
for the ratification of the appointment of Eisner & Lubin LLP; 98,900 shares
voted against; and 900 shares abstained.
Item 6
EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
4.8 - Indenture dated January 14, 1998 for Financial Federal Credit
Inc.'s Rule 144A Medium-Term Note Program
10.24 - Deferred Compensation Agreement dated January 2, 1998 between
the Registrant and Clarence Y. Palitz, Jr.
27 - Financial Data Schedule (EDGAR version only)
(b) Reports on Form 8-K
The Company did not file any Reports on Form 8-K during the quarter
ended January 31, 1998.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FINANCIAL FEDERAL CORPORATION
(Registrant)
By: /s/ Michael C. Palitz
------------------------
Executive Vice President
and Treasurer
By: /s/ David H. Hamm
------------------------
Controller and Assistant
Treasurer
March 11, 1998
(Date)
10
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibits Page
4.8 Indenture dated January 14, 1998 for Financial Federal
Credit Inc.'s Rule 144A Medium-Term Note Program 12
10.24 Deferred Compensation Agreement dated January 2, 1998
between the Registrant and Clarence Y. Palitz, Jr. 97
27 Financial Data Schedule (EDGAR version only)
11
<PAGE>
Exhibit 4.8
FINANCIAL FEDERAL CREDIT INC.
TO
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
INDENTURE
Dated as of January 14, 1998
Rule 144A Medium-Term Note Program
(Senior Debt Securities)
INDENTURE dated as of January 14, 1998, between FINANCIAL FEDERAL CREDIT INC.,
a Texas corporation (hereinafter called the "Company"), having its principal
office at 1300 Post Oak Boulevard, Suite 1300, Houston, Texas 77056, and The
FIRST NATIONAL BANK OF CHICAGO, a national banking association (hereinafter
called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its medium-term notes (herein
generally called the "Notes"), to be issued in one or more series, and
authenticated and delivered as in this Indenture provided. The Notes will not
be registered under the Securities Act and may only be sold or otherwise
transferred in transactions exempt from, or not subject to, the registration
requirements of the Securities Act.
All things necessary have been done to make this Indenture a valid agreement
of the Company, in accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the
Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes or of the Notes of any
series, 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 that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(4) unless expressly indicated to the contrary (e.g., by the use
of terms such as "fair value," "fair market value" or "market value") each
asset, each liability and each capital item of any Person, and any quantity
derivable by a computation involving any of such assets, liabilities or
capital items, shall be taken at the net book value thereof for all purposes
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.
Certain terms, used principally in Article III or Article VI, are defined in
those respective Articles.
"Act", when used with respect to any Holder, has the meaning specified in
Section 8.01.
"Affiliate" of any specified Person means any other Person (i) which directly
or indirectly through one or more intermediaries controls, or is controlled
by, or is under common control with such specified Person, (ii) which directly
or indirectly beneficially owns or holds 15% or more of any class of the
Voting Stock of such specified Person, or (iii) of which 15% or more of the
Voting Stock is beneficially owned or held directly or indirectly by such
specified Person or a Subsidiary of such specified Person. For the purposes
of this definition, "control" when used with respect to any specified Person
means the power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through the ownership
of Voting Stock, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authenticating Agent" has the meaning specified in Section 6.14.
"Bankruptcy Code" means the Federal Bankruptcy Act or Title 11 of the United
States Code.
"Board of Directors" means the board of directors of the Company, or the
executive or any other committee of that board duly authorized to act 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 or the executive or other committee of the Board authorized to
act in respect thereof and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", except as otherwise specified pursuant to Section 3.01, means,
any day that is (i) not a Saturday, a Sunday or a legal holiday or a day on
which banking institutions or trust companies in The City of New York, or in
any other Place of Payment as may be specified pursuant to Section 3.01 with
respect to the Notes of a particular series, are authorized or required by
law, regulation or executive order to close and (ii) with respect to a
Floating Rate Note for which the Base Rate is LIBOR, a London Banking Day.
"Capital Debt" when used with respect to the Company means all unsecured
Indebtedness of the Company which (i) has been issued and sold to, and is
owned and held by, Financial Federal Corporation, a Nevada corporation, (ii)
bears interest at a rate which is no less favorable to the Company than would
be obtainable in an arm's length transaction with a Person other than an
Affiliate, and (iii) contains or has applicable thereto subordination
provisions substantially in the form set forth in Exhibit A attached hereto or
such other provisions as may be approved in writing by the Holders of not less
than 66-2/3% in aggregate principal amount of the Notes of each series
Outstanding.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however
designated) in such Person and any rights (other than debt securities
convertible into an equity interest), warrants or options to subscribe for or
to acquire an equity interest in such Person.
"Capitalized Lease" means any lease the obligation for Rentals with respect to
which is required to be capitalized on a balance sheet of the lessee in
accordance with GAAP.
"Capitalized Rentals" means, as of any date of determination, the amount at
which the aggregate Rentals due and to become due under all Capitalized Leases
under which such Person or any of its Restricted Subsidiaries is a lessee
would be required at such time to be reflected as a liability on the
consolidated balance sheet of such Person in accordance with GAAP.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, 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 on such date.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request or
order signed in the name of the Company by (i) the President, an Executive
Vice President, a Senior Vice President or a Vice President of the Company and
(ii) the Chief Financial Officer, the Treasurer, the Controller or the
Secretary of the Company, and delivered to the Trustee.
"Consolidated Adjusted Net Income" means, as of any date of determination
thereof, the sum of (i) Consolidated Net Income, plus (ii) to the extent
deducted in the computation of Consolidated Net Income, all taxes on income.
"Consolidated Adjusted Net Worth" when used with respect to the Company means,
as of any date of determination thereof (a) the sum of (i) the total
stockholders equity account of the Company and its Restricted Subsidiaries on
a consolidated basis as determined in accordance with GAAP, plus (ii) deferred
income tax liabilities, plus (iii) the aggregate unpaid principal amount of
outstanding Capital Debt, less, without duplication, (b) the sum of (i) all
Intangible Assets, plus (ii) the amount by which outstanding Restricted
Investments on such date exceed 15% of Consolidated Adjusted Net Worth as
calculated on the day immediately preceding such date of determination.
"Consolidated Debt" of any Person means, without duplication, all Indebtedness
of such Person and its Restricted Subsidiaries as reflected on the
consolidated balance sheet of such Person and its Restricted Subsidiaries
prepared in accordance with GAAP.
"Consolidated Net Income" of any Person for any period means the gross
revenues of such Person and its Restricted Subsidiaries for such period less
all expenses and other proper charges (including taxes on income), determined
on a consolidated basis in accordance with GAAP and after eliminating earnings
or losses attributable to outstanding Minority Interests, but excluding, when
used with respect to the Company, in any event:
(a) any gains or losses on the sale or other disposition of fixed or capital
assets (other than the sale of repossessed collateral or residual interests in
the ordinary course of the Finance Business), and any taxes on such excluded
gains and any tax deductions or credits on account of any such excluded
losses;
(b) the proceeds of any life insurance policy (other than insurance
supporting the payment of a receivable obligation);
(c) net earnings and losses of any Restricted Subsidiary accrued prior to the
date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a Restricted
Subsidiary), substantially all the assets of which have been acquired in any
manner, realized by such other corporation prior to the date of such
acquisition;
(e) net earnings and losses of any corporation (other than a Restricted
Subsidiary) with which the Company or a Restricted Subsidiary shall have
consolidated or which shall have merged into or with the Company or a
Restricted Subsidiary prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a Restricted Subsidiary)
in which the Company or any Restricted Subsidiary has an ownership interest
unless such net earnings shall have actually been received by the Company or
such Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any Restricted Subsidiary which for
any reason (other than solely because of a business determination which is
subject to reversal at the sole election of the Company) is unavailable for
payment of dividends to the Company or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or write-up of
assets except to the extent that such reappraisal, revaluation or write-up has
been approved by the independent public accountants then reporting on the
Company's annual financial statements;
(i) any gain arising from the acquisition of any securities of the Company or
any Restricted Subsidiary; and
(j) any reversal of allowances for possible losses in excess of actual
recovery, except to the extent that provision for such losses shall have been
made from income arising during the applicable period or periods being tested
under Section 12.16.
"Corporate Trust Office" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this instrument is
located at One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Services Division, except that whenever a provision
herein refers to an office or agency of the Trustee in the Borough of
Manhattan, The City of New York, such office is located, at the date hereof,
at 14 Wall Street, Eighth Floor, New York, New York 10005.
"corporation" includes corporations, associations, companies (including,
without limitation, limited liability companies) and business trusts.
"Currency" means Dollars or a Foreign Currency or a composite currency, the
value of which is determined by reference to the values of the currencies of
any group of countries.
"Default" means, with respect to any series of Notes, any event, act or
condition the occurrence of which is, or after notice or the passage of time
or both would be, an Event of Default with respect to the Notes of such
series.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depositary" means, with respect to the Notes of any series issuable in whole
or in part in the form of one or more Global Notes, the Person designated as
Depositary by the Company pursuant to Section 3.01 until a successor
Depositary shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Depositary" shall mean or include each Person
who is then a Depositary hereunder and if at any time there is more than one
such Person, "Depositary" as used with respect to the Notes of any such series
shall mean the Depositary with respect to the Notes of that series.
"Designated Currency" has the meaning specified in Section 3.11.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Notes of such series and to have satisfied all the obligations under this
Indenture relating to the Notes of such series (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except (A) the rights of Holders of Notes of such series to receive,
from the trust fund described in clause (B)(1) of Section 4.01, payment of the
principal of (and premium, if any) and interest on such Notes when such
payments are due, (B) the Company's obligations with respect to the Notes of
such series under Sections 3.04, 3.05, 3.06, 4.02, 4.03 and 12.02, and (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder.
"Discount Note" means any Note that is issued with "original issue discount"
within the meaning of Section 1273(a) of the U.S. Internal Revenue Code of
1986, as amended, and the regulations thereunder and any other Note designated
by the Company as issued with original issue discount for United States
Federal income tax purposes.
"Dollar", "$" or "U.S.$" means such currency of the United States as at the
time of payment is legal tender for the payment of public and private debts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations promulgated thereunder.
"Finance Business" means, when used with respect to the Company, the business
of lending, consulting, guaranteeing obligations of others, financing and
leasing Property, the acquisition and ownership of receivables arising
therefrom and the transaction of such other business as may be reasonably
incidental thereto including, without limitation, the sale of repossessed
collateral or Property previously subject to lease.
"fiscal year" means, with respect to the Company, the twelve consecutive
months ending July 31.
"Fixed Rate Note" means a Note that provides for the payment of interest at a
fixed rate.
"Floating Rate Note" means a Note that provides for the payment of interest at
a variable rate determined periodically by reference to a base rate specified
pursuant to Section 3.01.
"Foreign Currency" means a currency issued by the government of any country
other than the United States.
"GAAP" means, at any date, United States generally accepted accounting
principles, consistently applied, as set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, that are applicable to the circumstances as
of the date of determination; provided, however, that, except as otherwise
specifically provided herein or in an indenture supplemental hereto, all
calculations made for purposes of determining compliance with the terms of the
provisions of this Indenture shall utilize GAAP in effect at the time of such
calculation.
"Global Note" means a global certificate evidencing all or part of a series of
Notes, issued to the Depositary for such series in accordance with
Section 2.04 and bearing the legends described in Section 2.04.
"Government Obligations" means securities that are (i) direct obligations of
the United States (or, if payments in respect of the Notes of a series are to
be made in a Designated Currency, the government that issued such currency)
for the payment of which its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States (or, if payments in respect of the Notes
of a series are to be made in a Designated Currency, the government that
issued such currency) the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States (or, if
payments in respect of the Notes of a series are to be made in a Designated
Currency, the government that issued such currency), that, in either case
under clauses (i) or (ii), are not callable or redeemable at the option of the
issuer thereof.
"Guaranties" by any Person shall mean all obligations (other than endorsements
in the ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or in effect, guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any Property constituting security therefor, (ii) to advance or supply funds
(x) for the purchase or payment of such Indebtedness or obligation, or (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such
Indebtedness or obligation, or (iii) to lease Property or to purchase
securities or other Property or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation, or (iv) otherwise
to assure the owner of the Indebtedness or obligation of the primary obligor
against loss in respect thereof. For the purpose of all computations made
hereunder, a Guaranty in respect of any Indebtedness for borrowed money shall
be deemed to be Indebtedness equal to the principal amount of such
Indebtedness for borrowed money, but not more than the portion thereof which
has been guaranteed, and a Guaranty in respect of any other obligation or
liability or any dividend shall be deemed to be Indebtedness equal to the
maximum aggregate amount of such obligation, liability or dividend, but not
more than the portion thereof which has been guaranteed.
"Holder" means the person in whose name a Note is Registered in the Security
Register.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise),
extend, assume, Guaranty or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to
GAAP or otherwise, of any such Indebtedness or the obligation on the balance
sheet of such Person (and "incurrence", "incurred", "incurrable" and
"incurring" shall have meanings correlative to the foregoing); provided,
however, that a change in GAAP that results in an obligation of such Person
that exists at such time becoming Indebtedness shall not be deemed an
incurrence of such Indebtedness.
"Indebtedness" of any Person means and includes all obligations of such Person
(other than Non-Recourse Debt) which in accordance with GAAP are to be
classified on the balance sheet of such Person as liabilities of such Person,
and, in any event, includes all (i) obligations of such Person for borrowed
money or which has been incurred in connection with the acquisition of
Property, (ii) obligations secured by any Lien or other charge upon Property
owned by such Person, even though such Person has not assumed or become liable
for the payment of such obligations, (iii) obligations created or arising
under any conditional sale or other title retention agreement with respect to
Property acquired by such Person, notwithstanding the fact that the rights and
remedies of the seller, lender or lessor under such agreement in the event of
default are limited to repossession or sale of Property, (iv) all Guaranties
of such Person, and (v) Capitalized Rentals under any Capitalized Lease. For
the purpose of computing the "Indebtedness" of any Person, there shall be
excluded any particular Indebtedness to the extent that, upon or prior to the
maturity thereof, there shall have been deposited with the proper depository
in trust the necessary funds (or evidences of such Indebtedness, if permitted
by the instrument creating such Indebtedness) for the payment, redemption or
satisfaction of such Indebtedness; and thereafter such funds and evidences of
Indebtedness so deposited shall not be included in any computation of the
assets of such Person.
"Indenture" means this instrument as originally executed, or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and, unless
the context otherwise requires, shall include the terms of a particular series
of Notes as established pursuant to Section 3.01.
"Intangible Assets" means, as of any date of determination thereof, the total
amount of goodwill, patents, trade names, trade marks, copyrights, franchises,
experimental expense, organization expense, unamortized debt discount and
expense, the excess of cost of shares acquired over book value of related
assets and such other assets as are properly classified as "intangible assets"
in accordance with GAAP.
"interest", when used with respect to a Discount Note which by its terms bears
interest only after Maturity, means interest payable after Maturity.
"Interest Payment Date" with respect to any Note means the Stated Maturity of
an installment of interest on such Note.
"Interest Rate Protection Agreements" has the meaning specified in the
definition of "Restricted Investments".
"investment" means, with respect to any Person, any direct, indirect or
contingent (i) purchase of Capital Stock, obligations or other securities of
any other Person, (ii) contribution of cash, Capital Stock or other Property,
or assumption of Indebtedness, made by such Person in exchange for Capital
Stock, notes, bonds or other Property of, or as a capital contribution to, any
other Person, (iii) loan, advance or other extension of credit to any Person,
(iv) Guaranty of the Indebtedness or other obligation of any other Person or
(v) other investment or acquisition of any interest in any other Person. The
repayment of Indebtedness owing to any Person shall not constitute an
investment in such Person.
"Lien" means, with respect to any Property, any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement, security interest,
lien (statutory or other), charge, easement, encumbrance, preference, priority
or other security or similar agreement or preferential arrangement of any kind
or nature whatsoever on or with respect to such Property (including, without
limitation, any agreement to give or grant a Lien or any lease, conditional
sale or other title retention agreement having substantially the same economic
effect as any of the foregoing).
"London Banking Day", with respect to any Note, means any day on which
dealings in deposits in the currency in which the Note is denominated are
transacted in the London interbank market.
"Material Adverse Effect" means (a) a materially adverse change in or effect
on the business, assets, properties, net worth, results of operations or
condition (financial or otherwise) of the Company and its Restricted
Subsidiaries, taken as a whole, or (b) a material impairment of the ability of
the Company to perform any of its obligations under or in connection with this
Indenture or the transactions contemplated hereby.
"Maturity" when used with respect to any Note means the date on which the
principal of such Note becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption, repayment at the option of the Holder thereof or otherwise.
"Minority Interests" of a Person means any shares of stock of any class of a
Restricted Subsidiary of such Person (other than directors' qualifying shares
as required by law) that are not owned by such Person and/or one or more of
its Restricted Subsidiaries. Minority Interests shall be valued by valuing
Minority Interests constituting preferred stock at the voluntary or
involuntary liquidating value of such preferred stock, whichever is greater,
and by valuing Minority Interests constituting common stock at the book value
of capital and surplus applicable thereto adjusted, if necessary, to reflect
any changes from the book value of such common stock required by the foregoing
method of valuing Minority Interests in preferred stock.
"net book value" means, with respect to any asset, liability or capital item
of any Person, the amount at which the same is recorded or, in accordance with
GAAP, should have been recorded in the books of account of such Person, as
reduced by any reserves which have been or, in accordance with GAAP, should
have been set aside with respect thereto, but in every case (whether or not
permitted in accordance with GAAP) without giving effect to any write-up,
write-down or write-off (other than any write-down or write-off the entire
amount of which was charged to Consolidated Net Income or to a reserve that
was a charge to Consolidated Net Income) relating thereto made after the date
hereof.
"Non-Recourse Debt" of a Person means Indebtedness of such Person or a
Restricted Subsidiary of such Person incurred in connection with the
acquisition of Property which, in turn, is subject to a lease or security
agreement under which a Person other than such Person or a Restricted
Subsidiary of such Person is the lessee or debtor, to the extent that (a) such
lease or security agreement provides for rentals or other payments sufficient
to pay the entire principal of and interest on such Indebtedness on or before
the date or dates for payment thereof, and (b) such Indebtedness does not
constitute a general obligation of such Person or any Restricted Subsidiary of
such Person but is repayable solely out of the rentals or other sums payable
under the lease or security agreement and/or the Property subject thereto.
"Notes" has the meaning stated in the first recital of this Indenture and more
particularly means any Notes authenticated and delivered under this Indenture.
"Officers' Certificate" means a certificate signed by (i) the President, an
Executive Vice President, a Senior Vice President or a Vice President of the
Company and (ii) the Chief Financial Officer, the Treasurer, the Controller or
the Secretary of the Company, and delivered to the Trustee; provided, however,
that in the case of an Officers' Certificate delivered pursuant to Section
12.05 hereof, one of the signers thereof shall be the principal executive
officer, principal financial officer or principal accounting officer of the
Company.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel to
the Company (including in-house counsel to the Company) and who shall be
reasonably satisfactory to the Trustee, that is delivered to the Trustee. The
acceptance by the Trustee of such opinion shall be sufficient evidence that
such counsel is reasonably acceptable to the Trustee.
"Outstanding" when used with respect to Notes means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Notes or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Notes or from its obligations with respect to
which the Company shall have been Discharged; provided, however, that if such
Notes or portions thereof are to be redeemed or repaid, notice of such
redemption or repayment has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) Notes that have been paid pursuant to Section 3.06 or in
exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in respect of
which there shall have been presented to the Trustee proof satisfactory to it
that such Notes are held by a bona fide purchaser in whose hands such Notes
are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Notes Outstanding have performed any Act hereunder, Notes
owned by the Company or any other obligor upon the Notes or any Affiliate of
the Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such Act, only Notes that the Trustee actually
knows to be so owned shall be so disregarded. Notes so owned that 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 to act with
respect to such Notes and that the pledgee is not the Company or any other
obligor upon the Notes or any Affiliate of the Company or of such other
obligor. In determining whether the Holders of the requisite principal amount
of Outstanding Notes have performed any Act hereunder, the principal amount of
a Discount Note that shall be deemed to be Outstanding for such purpose shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.02 and the principal amount of a Note
denominated in a Currency other than Dollars that shall be deemed to be
Outstanding for such purpose shall be the amount calculated pursuant to
Section 3.10(b).
"Paying Agent" means any Person authorized by the Company to pay the principal
of (and premium, if any) or interest on any Notes on behalf of the Company.
"Person" means any individual, corporation, partnership, limited liability
corporation, limited liability partnership, joint venture, association, joint-
stock company, trust, business trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" when used with respect to the Notes of any series means the
place or places, including the office or agency maintained by the Company in
The City of New York pursuant to Section 12.02, where the principal of (and
premium, if any) and interest on the Notes of that series are payable as
specified pursuant to Section 3.01.
"Predecessor Note" of any particular Note means every previous Note evidencing
all or a portion of the same debt as that evidenced by such particular Note,
and, for the purposes of this definition, any Note authenticated and delivered
under Section 3.06 in lieu of a lost, destroyed or stolen Note shall be deemed
to evidence the same debt as the lost, destroyed or stolen Note.
"Priority Obligations" of the Company means, at any date of determination, the
sum at such date of the unpaid principal amount of (i) all Senior Debt of the
Company secured by Liens permitted by Section 12.15 and (ii) all Senior Debt
and all Guaranties of Restricted Subsidiaries other than Indebtedness to the
Company or a Wholly-Owned Restricted Subsidiary of the Company.
"Property" means, with respect to any Person, any interest of such Person in
any kind of property or asset, whether real, personal or mixed, or tangible or
intangible, including, without limitation, Capital Stock in any other Person.
"Qualified Rating Agency" means Duff & Phelps Credit Rating Co., Fitch
Investors Service L.P., Moody's Investors Service, Inc., Standard & Poor's
Rating Group or another nationally recognized credit rating agency of similar
standing if none of the aforementioned rating agencies are in the business of
rating the investment or indebtedness, as the case may be, in question.
"Receivables Securitization Transaction" means any transaction pursuant to
which (i) accounts receivable are sold or transferred, and (ii) the seller (a)
retains an interest in the accounts receivable sold or transferred or (b)
assumes any credit liability in connection with such sale or transfer.
"Redemption Date" means the date fixed for redemption of any Note pursuant to
this Indenture which, in the case of a Floating Rate Note, unless otherwise
specified pursuant to Section 3.01, shall be an Interest Payment Date only.
"Redemption Price" means, in the case of a Discount Note, the amount of the
principal thereof that would be due and payable as of the Redemption Date upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.02
and, in the case of any other Note, the principal amount thereof, plus, in
each case, premium, if any, and accrued and unpaid interest, if any, to the
Redemption Date.
"Regular Record Date" for the interest payable on the Notes of any series on
any Interest Payment Date means the date specified for that purpose pursuant
to Section 3.01 for such Interest Payment Date.
"Rentals" when used with respect to any Person means and includes all fixed
rents (including as such all payments which the lessee is obligated to make to
the lessor on termination of the lease or surrender of the Property) payable
by such Person or a Restricted Subsidiary of such Person, as lessee or
sublessee under a lease of real or personal Property, but shall be exclusive
of any amounts required to be paid by such Person or a Restricted Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, any
assistant vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or assistant trust
officer, the controller or any assistant controller or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Restricted Investments" means any investments in or loans, advances or
extensions of credit to, any Person, other than (i) receivables arising in the
ordinary course of the Finance Business; (ii) investments, loans and advances
by the Company and its Restricted Subsidiaries in and to Restricted
Subsidiaries, including any investment in a Person which, after giving effect
to such investment, will become a Restricted Subsidiary and loans and advances
by a Wholly-Owned Restricted Subsidiary to the Company; (iii) investments,
maturing in five years or less from the date of acquisition, in bills, notes
and bonds of the United States of America, or any agency thereof; (iv)
investments in corporate debt obligations, maturing within twelve months or
less from the date of acquisition, which (a) are issued by corporations having
substantially all of their assets located in the United States, and (b) at the
time of acquisition, are accorded one of the two highest ratings by a
Qualified Rating Agency; (v) investments in commercial paper which is issued
by corporations having substantially all of their assets located in the United
States, and which matures in 270 days or less from the date of acquisition
and, at the time of acquisition, is accorded one of the two highest ratings by
a Qualified Rating Agency; (vi) investments in certificates of deposit,
maturing within twelve months or less from the date of acquisition, issued by
commercial banks located in the United States having capital, surplus and
undivided profits aggregating more than U.S.$ 100,000,000 and accorded at the
time of acquisition one of the two highest ratings by a Qualified Rating
Agency; (vii) investments in marketable obligations, maturing within three
years or less from the date of acquisition, of any state, territory or
possession of the United States of America or any political subdivision of any
of the foregoing, or the District of Columbia, which are, at the time of
acquisition, accorded one of the two highest ratings by a Qualified Rating
Agency; (viii) investments in certificates of deposit which are denominated in
Dollars, maturing within 7 days or less from the date of acquisition, issued
by (a) commercial banks located in Canada, Japan or in a country which was a
member of the European Economic Community on the Closing Date, having capital,
surplus and undivided profits aggregating more than the equivalent of
U.S.$250,000,000, and having outstanding unsecured long-term indebtedness
which, at the time of acquisition, is accorded one of the two highest ratings
by a Qualified Rating Agency, or (b) offshore subsidiaries of United States
banks qualifying under clause (vi) of this definition; (ix) investments
evidenced by repurchase agreements providing for the repurchase within 7 days
from the date of the making of such investment of obligations of the United
States of America or any agency thereof or obligations guaranteed by the
United States of America which agreements are issued by a bank qualifying
under clause (vi) of this definition; and (x) interest rate exchange
agreements, or interest rate cap, floor and collar agreements (collectively,
"Interest Rate Protection Agreements"); provided that, (1) such Interest Rate
Protection Agreements are not entered into for the purpose of hedging one or
more Interest Rate Protection Agreements which themselves are hedges of
certain risks to the Company or any Restricted Subsidiary, and (2) any such
Interest Rate Protection Agreements shall be entered into (A) solely for the
purpose of hedging against changes in prevailing interest rates and not for
purposes of speculation, and (B) only with commercial or investment banks
having outstanding unsecured long-term indebtedness which, at the effective
date of such Interest Rate Protection Agreement, is accorded at a rating of
"A" or better by a Qualified Rating Agency or insurance companies which are
accorded a rating of A-XII, or better, by A.M. Best Co. (or an equivalent
rating by another nationally recognized insurance rating agency of similar
standing if A.M. Best Co. is not then in the business of rating insurance
companies). Any such investments, loans and advances shall be valued at cost
less (i) any net return of capital through the sale or liquidation thereof or
other return of capital thereon, and (ii) decreases in value charged against
Consolidated Adjusted Net Income, or directly against Consolidated Adjusted
Net Worth, subsequent to July 31, 1996.
For purposes of this definition, (x) at any time when a Subsidiary becomes a
Restricted Subsidiary, all investments of such Subsidiary at such time shall
be deemed to have been made by such Subsidiary, as a Restricted Subsidiary, at
such time; and (y) all investments of the Company and its Restricted
Subsidiaries in a Restricted Subsidiary which is redesignated as an
Unrestricted Subsidiary pursuant to Section 12.21 shall be deemed to have been
made immediately after such redesignation.
"Restricted Payments" has the meaning specified in Section 12.16.
"Restricted Subsidiary" means (i) with respect to any Person other than the
Company, a Subsidiary of such Person, and (ii) with respect to the Company,
any Subsidiary of the Company (a) which is organized under the laws of the
United States or any State, territory or possession thereof, or Canada or any
Province thereof; (b) which conducts substantially all of its business and has
substantially all of its assets within the United States, territories or
possessions thereof and Canada; (c) of which more than 80% (by number of
votes) of the Voting Stock is owned by the Company and/or one or more
Restricted Subsidiaries of the Company; and (iii) which has been designated by
the Board of Directors of the Company to be included in the definition of
Restricted Subsidiary for all purposes of this Indenture in accordance with
Section 12.21 hereof.
"Rule 144" means Rule 144 under the Securities Act and any successor rule
thereto.
"Rule 144A" means Rule 144A under the Securities Act and any successor rule
thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"security" has the same meaning as in Section 2(1) of the Securities Act.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.05(a).
"Senior Debt" means, with respect to the Company, all Indebtedness of the
Company for borrowed money or incurred in connection with the acquisition of
assets which is not expressed to be subordinate or junior to any other
Indebtedness of the Company and all Indebtedness of Restricted Subsidiaries
for borrowed money or incurred in connection with the acquisition of assets.
"Senior Guaranties" means, with respect to the Company, all Guaranties of the
Company which are not expressed to be subordinated or junior to any other
Indebtedness of the Company and all Guaranties of Restricted Subsidiaries.
"Senior Obligations" means, with respect to the Company, the sum of (i) the
aggregate unpaid principal amount of Senior Debt, (ii) the aggregate
outstanding contingent liability with respect to Senior Guaranties, (iii) the
aggregate amount of Capitalized Rentals and (iv) recourse obligations of the
Company under Receivables Securitization Transactions.
"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 Note or any installment of
principal thereof or premium thereon or interest thereon means the date
specified in such Note, if any, representing such installment of interest, as
the date on which the principal of such Note or such installment of principal,
premium or interest is due and payable.
"Subordinated Debt" means, with respect to the Company, all unsecured
Indebtedness of the Company for borrowed money which shall contain or have
applicable thereto subordination provisions substantially identical in effect
to those contained in Exhibit B hereof or such other provisions as may be
approved in writing by the holders of not less than 66-2/3% in aggregate
principal amount of the Notes of any series Outstanding.
"Subordinated Guaranties" means, with respect to the Company, all Guaranties
of the Company which shall contain or have applicable thereto subordination
provisions substantially identical in effect to those contained in Exhibit B
hereof or such other provisions as may be approved in writing by the holders
of not less than 66 2/3% in aggregate principal amount of the Notes of any
series Outstanding.
"Subordinated Obligations" means, with respect to the Company, the sum of (i)
the aggregate unpaid principal amount of Subordinated Debt, and (ii) the
aggregate outstanding contingent liability with respect to Subordinated
Guaranties of the Company.
"Subsidiary" of any Person means (i) any corporation more than 50% of the
outstanding Voting Stock of which is owned or controlled, directly or
indirectly, by such Person or by one or more other Subsidiaries of such
Person, or by such Person and one or more other Subsidiaries thereof or (ii)
any limited partnership of which such Person or any Subsidiary of such Person
is a general partner or (iii) any other Person (other than a corporation or
limited partnership) in which such Person, or one or more other Subsidiaries
of such Person, or such Person and one or more other Subsidiaries thereof,
directly or indirectly, has more than 50% of the outstanding partnership or
similar interests or has the power, by contract or otherwise, to direct or
cause the direction of the policies, management and affairs thereof.
"Total Debt" means the sum of Senior Obligations and Subordinated Obligations.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended and as
in force at the date as of which this instrument was executed, except as
provided in Section 11.05.
"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
Notes of any series shall mean the Trustee with respect to Notes of such
series.
"United States" means the United States of America (including each of the
States thereof and the District of Columbia), and its territories and
possessions.
"Unrestricted Subsidiary" means any Subsidiary that has not been designated as
a Restricted Subsidiary.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only as
long as no senior class of securities has such voting power by reason of any
contingency.
"Weighted Average Life to Maturity" with respect to any Indebtedness of the
Company means, at the time of calculation thereof, the number of years
obtained by dividing the then remaining dollar-years of such Indebtedness by
the then outstanding principal amount of such Indebtedness. For purposes of
this definition, "remaining dollar-years" of any Indebtedness means, at any
time, the amount obtained by (a) multiplying the amount of each then remaining
installment, sinking fund, serial maturity or other required payment,
including payment at final maturity, by the number of years (calculated to the
nearest one-twelfth) which will elapse between the time in question and the
making of that payment and (b) totaling all of the products obtained in clause
(a) above.
"Wholly-Owned Restricted Subsidiary" means, (i) with respect to any Person
other than the Company, a Wholly-Owned Subsidiary of such Person and (ii) with
respect to the Company, a Restricted Subsidiary of the Company of which all of
the outstanding Capital Stock (other than directors' qualifying shares) shall
at the time be owned, either directly or indirectly, by the Company.
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such Person of
which all of the outstanding Capital Stock (other than directors' qualifying
shares) shall at the time be owned by such Person, either directly or
indirectly through ownership of one or more Wholly-Owned Subsidiaries of such
Person.
SECTION 1.02. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) 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 an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such 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, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Notices, etc., to Trustee and Company. Except as
otherwise expressly provided herein, any request, demand, authorization,
direction, notice, consent, waiver or other 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 the Company shall be sufficient
for every purpose hereunder if in writing (in the English language) and (a)
delivered in person, (b) sent by mail, first class or air mail postage
prepaid, (c) delivered by telecopy or facsimile, with a copy immediately
thereafter sent by mail, first class or air mail postage prepaid, or (d)
delivered by overnight courier, to 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 if in writing (in the English language)
and (a) delivered in person, (b) sent by mail, first class or air mail postage
prepaid, (c) delivered by telecopy or facsimile, with a copy immediately
thereafter sent by mail, first class or air mail postage prepaid, or (d)
delivered by overnight courier, to the Company at the address of its principal
office specified in the first paragraph of this instrument or at any other
address previously furnished in writing to the Trustee and the Holders by the
Company, Attention: President.
Any such request, demand, authorization, direction, notice, consent,
waiver or other Act of Holders or other document provided or permitted by this
Indenture shall be deemed to have been made, given or furnished: (i) if
delivered in person, when delivered; (ii) if delivered by mail, first class or
air mail postage prepaid, on the third Business Day after mailing; (iii) if
delivered by telecopy or facsimile, on the date of transmission if transmitted
on a Business Day before 4:00 p.m. or, if not, on the next succeeding Business
Day; or (iv) if delivered by overnight courier, one Business Day after
delivery to such courier.
SECTION 1.05. Notice of Holders; Waiver. Where this Indenture
provides for the giving of notice to Holders of any event, (1) such notice
shall be sufficiently given to Holders (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to such
Holders as their names and addresses appear in the Security Register, within
the time prescribed; provided, however, that, in any case, any notice to
Holders of Floating Rate Notes regarding the determination of a periodic rate
of interest, if such notice is required pursuant to Section 3.01, shall be
sufficiently given if given in the manner specified pursuant to Section 3.01.
In the event of suspension of regular mail service or by reason of
any other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall
constitute sufficient notice for every purpose hereunder.
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 on such waiver. 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, and any notice that is mailed in
the manner herein provided shall be conclusively presumed to have been duly
given.
SECTION 1.06. Incorporation by Reference to Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms incorporated by reference in this
Indenture have the following meanings:
"Bankruptcy Act" means the Bankruptcy Code.
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, or any
other obligor on the Notes, if any.
All other Trust Indenture Act terms used or incorporated by reference in
this Indenture that are defined by the Trust Indenture Act, defined by Trust
Indenture Act reference to another statute or defined by Commission rule have
the meanings assigned to them therein.
SECTION 1.07. Conflict with Trust Indenture Act. Notwithstanding
that this Indenture is not required to be qualified under the Trust Indenture
Act, if any provision hereof limits, qualifies or conflicts with the duties
imposed by Sections 310 through 317, inclusive, of the Trust Indenture Act,
such imposed duties 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 of reference only and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and
agreements in this Indenture by the parties hereto shall bind their respective
successors and assigns and inure to the benefit of their permitted successors
and assigns, whether so expressed or not.
SECTION 1.10. Severability Clause. In case any provision in this
Indenture or in the Notes 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 Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Security Registrar, any
Paying Agent, 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 Notes shall
for all purposes be governed by and construed in accordance with the laws of
the State of New York without regard to the conflicts of law rules of said
State.
SECTION 1.13. Legal Holidays. Unless otherwise specified
pursuant to Section 3.01, in any case where any Interest Payment Date,
Redemption Date, Maturity or other payment date of any Note of any series
shall not be a Business Day at any Place of Payment for the Notes of that
series, then (notwithstanding any other provision of this Indenture or of the
Notes, except Section 3.01 hereof as aforesaid) such payment of principal (and
premium, if any) or interest 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 such Interest Payment
Date, Redemption Date, Maturity or other payment date, and no interest shall
accrue on such payment for the period from and after such Interest Payment
Date, Redemption Date, Maturity or other payment date, as the case may be, to
such next succeeding Business Day.
ARTICLE II
Note Forms
SECTION 2.01. Forms Generally. The Notes of each series shall be
substantially in one of the forms established in or pursuant to a Board
Resolution and set forth in an Officers' Certificate, or one or more
indentures supplemental hereto, and shall have such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification or designation and such legends (including, but not limited to,
legends as to the status of such Notes as "restricted securities" within the
meaning of Rule 144 under the Securities Act and the nature of any transfer
restrictions associated therewith, and as to original issue discount) or
endorsements placed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange on which any series of
the Notes may be listed or of any automated quotation system on which any such
series may be quoted, or to conform to usage, all as determined by the
officers executing such Notes as conclusively evidenced by their execution of
such Notes. If the form of a series of Notes is established in or pursuant to
a Board Resolution, a copy of such Board Resolution shall be delivered to the
Trustee at or prior to the delivery of the Officers' Certificate setting forth
the form of such series.
Upon issuance, the Notes of any series may be represented by one
or more Global Notes or by Notes in individual certificated form.
The Notes of each series shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner, all as determined by the
officers executing such Notes, as conclusively evidenced by their execution of
such Notes, subject, however, with respect to the Notes of any particular
series, to the rules of any securities exchange or quotation system on which
such Notes are listed or quoted and, with respect to Global Notes, to the
rules of the Depositary.
SECTION 2.02. Form of Trustee's Certificate of Authentication.
The form of the Trustee's certificate of authentication to be borne by the
Notes shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By____________________________________
Authorized Signatory
SECTION 2.03. Form of Trustee's Certificate of Authentication by
an Authenticating Agent. If at any time there shall be an Authenticating
Agent appointed with respect to any series of Notes, then the Trustee's
Certificate of Authentication by such Authenticating Agent to be borne by
Notes of each such series shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By
Authenticating Agent
By
Authorized Signatory
SECTION 2.04. Form of Global Notes. (a) If the Company shall
establish pursuant to Section 3.01 that the Notes of a series are to be issued
in whole or in part in the form of one or more Global Notes, then the Company
shall execute and the Trustee shall authenticate and deliver one or more
Global Notes that (i) shall represent an aggregate amount equal to the
aggregate principal amount of the Outstanding Notes of such series to be
represented by one or more Global Notes, (ii) shall be registered in the name
of the Depositary for such Global Note or Global Notes or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instruction and (iv) shall bear a legend
substantially to the following effect:
"Unless this certificate is presented by an authorized representative of the
Depositary to the Issuer or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of the
nominee of the Depositary or in such other name as is requested by an
authorized representative of the Depositary (and any payment is made to the
nominee of the Depositary or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, the nominee of the Depositary, has an interest
herein."
(b) Except as provided in Section 3.05(b) or the terms of such
Global Note so expressly permit, a Global Note may be transferred, in whole
but not in part, only to a nominee of the Depositary for such Global Note, or
to the Depositary, or to a successor Depositary selected or approved by the
Company, or to a nominee of such successor Depositary. A legend to the
foregoing effect will also appear on a Global Note. Such legend shall take
the following form:
"Unless and until it is exchanged in whole or in part for the individual Notes
represented hereby, this Global Note may not be transferred except as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary."
ARTICLE III
The Notes
SECTION 3.01. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Notes that may be authenticated and delivered
under this Indenture is unlimited.
The Notes may be issued in one or more series and the Notes of a
series may include both Fixed Rate Notes and Floating Rate Notes. There shall
be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Notes of any series:
(1) the form of the Notes of such series;
(2) the title of the Notes of the series (which shall
distinguish the Notes of such series from all other series of Notes);
(3) the limit, if any, upon the aggregate principal amount of
the Notes of the series that may be authenticated and delivered under this
Indenture (except for Notes authenticated and delivered upon transfer of, or
in exchange for, or in lieu of, other Notes of such series pursuant to Section
3.04, 3.05, 3.06, 11.06 or 13.07);
(4) the dates on which or periods during which the Notes of the
series may be issued, and the dates on, or the range of dates within, which
the principal of (and premium, if any, on) the Notes of such series are or may
be payable;
(5) the rate or rates or the method of determination thereof at
which the Notes of the series shall bear interest, if any, the date or dates
from which such interest shall accrue, the Interest Payment Dates on which
such interest shall be payable, the Regular Record Dates for the interest
payable on such Interest Payment Dates;
(6) the places, if any, in addition to or instead of the
Corporate Trust Office of the Trustee where the principal of (and premium, if
any) and interest on Notes of the series shall be payable;
(7) the obligation, if any, of the Company to redeem or
repurchase Notes of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder and the periods within which or the
dates on which, the prices at which and the terms and conditions upon which
Notes of the series shall be redeemed or repurchased, in whole or in part,
pursuant to such obligation;
(8) the periods within which or the dates on which, the prices
at which and the terms and conditions upon which Notes of the series may be
redeemed or repaid, if any, in whole or in part, at the option of the Company,
a Holder or otherwise;
(9) the denominations in which individual Notes of the series
shall be issuable;
(10) whether the Notes of the series are to be issued as Discount
Notes and, if so, the amount of discount with which such Notes may be issued;
(11) provisions, if any, for the defeasance of Notes of the
series;
(12) whether the Notes of the series are to be issued in whole
or in part in the form of one or more Global Notes and, in such case, the
Depositary for such Global Note or Global Notes and the terms and conditions,
if any, upon which interests in such Global Note or Global Notes may be
exchanged in whole or in part for the individual Notes represented thereby;
(13) if other than Dollars, the Currency in which Notes of the
series shall be denominated or in which payment of the principal of (and
premium, if any) and interest on Notes of the series may be made and any other
terms concerning such payment;
(14) if the principal of (and premium, if any) or interest on
Notes of the series are to be payable, at the election of the Company or a
Holder thereof, in a Currency other than that in which the Notes are
denominated or payable without such election, the periods within which and the
terms and conditions upon which such election may be made and the time and the
manner of determining the exchange rate between the Currency in which the
Notes are denominated or payable without such election and the Currency in
which the Notes are to be paid if such election is made;
(15) if the amount of payments of principal of (and premium, if
any) or interest on the Notes of the series may be determined with reference
to a base rate or index including, but not limited to, an index based on a
Currency or Currencies other than that in which the Notes are payable, the
manner in which such amounts shall be determined;
(16) any additional Events of Default or restrictive covenants
provided for with respect to Notes of the series; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Notes of any one series shall be substantially identical in
form except as to denomination and except as may otherwise be provided in or
pursuant to such Board Resolution and set forth in such Officers' Certificate
or in any such indenture supplemental hereto. Notwithstanding that all Notes
of a series will vote together for purposes of this Indenture, not all Notes
of any one series need be issued at the same time or with the same terms and,
unless otherwise provided, a series may be reopened for issuance of additional
Notes of such series.
If any of the terms of a series of Notes is established in or
pursuant to a Board Resolution, a copy of such Board Resolution shall be
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 3.02. Denominations. In the absence of any specification
pursuant to Section 3.01 with respect to Notes of any series, the Notes of
such series shall be issuable only in denominations of $150,000 and any larger
amount that is an integral multiple of $25,000 and shall be payable only in
Dollars.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
(a) The Notes of any series shall be executed on behalf of the Company by any
two of its Chairman, Vice Chairman, President, Vice Presidents, Treasurer or
Assistant Treasurer under its corporate seal reproduced thereon and attested
by its Secretary or one of its Assistant Secretaries. The signature of any of
these officers may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or
did not hold such offices at the date of such Notes.
(b) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver, or cause to be delivered,
Notes of any series, executed by the Company, to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Notes and the Trustee in accordance with the Company Order
shall authenticate and deliver such Notes. The Trustee shall be entitled to
receive, prior to the authentication and delivery of the first Notes of such
series, the supplemental indenture or the Board Resolution by or pursuant to
which the form and terms of such Notes have been approved, an Officers'
Certificate as to the absence of any event that is, or after notice or lapse
of time or both would become, an Event of Default and an Opinion of Counsel
stating that:
(i) all instruments furnished by the Company to the Trustee in
connection with the authentication and delivery of such Notes conform to the
requirements of this Indenture and constitute sufficient authority hereunder
for the Trustee to authenticate and deliver such Notes;
(ii) the forms and terms of such Notes have been established in
conformity with the provisions of this Indenture;
(iii) in the event that the forms or terms of such Notes have been
established in a supplemental indenture, the execution and delivery of such
supplemental indenture has been duly authorized by all necessary corporate
action of the Company, such supplemental indenture has been duly executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Trustee, is a valid and binding obligation enforceable against
the Company in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect)
and subject to such other customary exceptions as counsel shall request and as
to which the Trustee shall not reasonably object;
(iv) the execution and delivery of such Notes have been duly
authorized by all necessary corporate action of the Company and such Notes
have been duly executed by the Company, and all laws and other requirements
with respect to the execution and delivery of the Notes by the Company have
been complied with by the Company, and, assuming due authentication by the
Trustee, and upon receipt of payment therefore will be valid and binding
obligations enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect)
and subject to such other customary exceptions as counsel shall request; and
(v) the amount of Notes Outstanding of such series, together
with the amount of such Notes, does not exceed any limit established under the
terms of this Indenture on the amount of Notes of such series that may be
authenticated and delivered.
If all of the Notes of a series are not to be originally issued at
the same time, then the documents required to be delivered pursuant to this
Section 3.03(b) must be delivered only once, prior to the authentication and
delivery of the first Note of such series; provided, however, that any
subsequent request by the Company to the Trustee to authenticate Notes of such
series upon original issuance shall constitute a representation and warranty
by the Company that, as of the date of such request, the statements made in
the Officers' Certificate delivered pursuant to this Section 3.03(b) shall be
true and correct as if made on such date.
(c) Each Depositary designated pursuant to Section 3.01 for a
Global Note in registered form must, at the time of its designation and at all
times while it serves as such Depositary, be a clearing agency registered as
such under the Exchange Act and any other applicable statute or regulation.
(d) The Trustee shall not be required to authenticate any Notes
if the issuance of such Notes pursuant to this Indenture will adversely affect
the Trustee's own rights, duties or immunities under this Indenture.
(e) Each Note shall be dated the date of its authentication,
except as otherwise provided pursuant to Section 3.01 with respect to the
Notes of such series.
(f) No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Note a certificate of authentication substantially in one of the forms
provided for herein duly executed by the Trustee or by an Authenticating Agent
by manual signature of one of its authorized signatories, and such certificate
upon any Note shall be conclusive evidence, and the only evidence that such
Note has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture.
SECTION 3.04. Temporary Notes. Pending the preparation of
definitive Notes of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Notes in
lieu of which they are issued, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Notes, may determine, as conclusively evidenced by their execution of such
Notes. Any such temporary Note may be in global form, representing all or a
portion of the Outstanding Notes of such series. Every such temporary Note
shall be executed by the Company and shall be authenticated and delivered by
the Trustee upon the same conditions and in substantially the same manner, and
with the same effect, as the definitive Note or Notes in lieu of which it is
issued.
If temporary Notes of any series are issued, the Company will
cause definitive Notes of such series to be prepared without unreasonable
delay. After (a) the preparation of definitive Notes of such series, the
temporary Notes of such series shall be exchangeable for definitive Notes of
such series upon surrender of the temporary Notes of such series at the office
or agency of the Company in a Place of Payment for such series, without charge
to the Holder, except as provided in Section 3.05 in connection with a
transfer, and (b) upon surrender for cancellation of any one or more temporary
Notes of any series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of the same series of authorized denominations and of like
tenor. Until so exchanged, temporary Notes of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes of such series.
Upon any exchange of a portion of a temporary Global Note for a
definitive Global Note or for the individual Notes represented thereby
pursuant to this Section 3.04 or Section 3.05, the temporary Global Note shall
be endorsed by the Trustee to reflect the reduction of the principal amount
evidenced thereby, whereupon the principal amount of such temporary Global
Note shall be reduced for all purposes by the amount so exchanged and
endorsed.
SECTION 3.05. Registration, Transfer and Exchange. (a) The
Company shall, in accordance with Section 12.02 hereof, maintain an office or
agency where the Notes of each series may be presented for registration of
transfer or exchange. The Company shall cause to be kept at such office
(which, unless otherwise specified, shall be the Corporate Trust Office of the
Trustee in the Borough of Manhattan, The City of New York) a register for each
series of Notes (the registers 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 Notes and of transfers and exchanges of Notes. Such Security
Register shall be in written form or in any other form capable of being
converted into written form within a reasonable period of time. At all
reasonable times the Security Register shall be open for inspection by the
Company. The Trustee is hereby initially appointed "Security Registrar" for
the purpose of registering Notes and registering transfers and exchanges of
Notes as herein.
The Company may at its option replace the Trustee as Security
Registrar and may appoint one or more Paying Agents with respect to any series
of Notes. The Company shall enter into an appropriate agency agreement with
any Person designated by the Company as a Security Registrar or Paying Agent
with respect to a series of Notes that is not a party to this Indenture, which
agreement shall implement the provisions of this Indenture (including, where
applicable, the provisions of the Trust Indenture Act incorporated herein)
that relate to such Security Registrar or Paying Agent. Prior to the
designation of any such Person, the Company shall, by written notice (which
notice shall include the name and address of such Person), inform the Trustee
of such designation. If the Company fails to designate a Security Registrar
or Paying Agent for any series of Notes, the Trustee shall act as such.
Upon surrender for registration of transfer of any Note of any
series at the office or agency of the Company maintained for such purpose, the
Company shall (subject to the receipt of requested information, if applicable,
as provided below) execute, and the Trustee or any Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee, one or
more new Notes of the same series of any authorized denomination or
denominations of like tenor and aggregate principal amount. If the Note being
transferred is a "restricted security" within the meaning of Rule 144 of the
Securities Act, the Company or the Trustee may request, and if so requested
the transferor and/or its designated transferee shall provide, such
documentation as may be reasonably required by the Company or the Trustee to
establish compliance with applicable law regarding transfers of restricted
securities.
At the option of the Holder, Notes of any series may be exchanged
for other Notes of the same series of any authorized denomination or
denominations of like tenor and aggregate principal amount, upon surrender of
the Notes to be exchanged at the office or agency of the Company maintained
for such purpose.
Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes that
the Holder making the exchange is entitled to receive.
(b) If at any time the Depositary for the Notes of a series
notifies the Company that it is unwilling or unable to continue as Depositary
for the Notes of such series or if at any time the Depositary for the Notes of
such series shall no longer be eligible under Section 3.03(c), the Company
shall appoint a successor Depositary with respect to the Notes of such series.
If a successor Depositary for the Notes of such series is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such ineligibility, the Company's election pursuant to Section
3.01(12) shall no longer be effective with respect to the Notes of such series
and the Company will execute, and the Trustee, upon receipt of a Company Order
for the authentication and delivery of individual Notes of such series, will
authenticate and deliver, individual Notes of such series in an aggregate
principal amount equal to the principal amount of the Global Note or Global
Notes representing Notes of such series in exchange for such Global Note or
Global Notes.
The Company may at any time and in its sole discretion determine
that individual Notes of any series issued in the form of one or more Global
Notes shall no longer be represented by such Global Note or Global Notes. In
such event the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of individual Notes of such
series, will authenticate and deliver, individual Notes of such series in an
aggregate principal amount equal to the principal amount of the Global Note or
Global Notes representing Notes of such series in exchange for such Global
Note or Global Notes.
If specified by the Company pursuant to Section 3.01 with respect
to a series of Notes, or if required by the rules of the Depositary or
applicable law, the Depositary for such series of Notes may surrender a Global
Note for such series of Notes in exchange in whole or in part for individual
Notes of such series on such terms as are acceptable to the Company and such
Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to each Person specified by such Depositary a new individual
Note or Notes of the same series, of any authorized denomination as requested
by such Person in aggregate principal amount equal to and in exchange for such
Persons' beneficial interest in the Global Note; and
(ii) to such Depositary a new Global Note in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Note and the aggregate principal amount of individual Notes delivered
to Holders thereof.
Upon the exchange of a Global Note, in whole or in part, for
individual Notes, such Global Note shall be cancelled by the Trustee.
Individual Notes issued in exchange for a Global Note pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depositary for such Global Note, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Notes to the Persons in whose names such Notes are so
registered.
(c) All Notes issued upon any transfer or exchange of Notes
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
for such transfer or exchange.
Every Note presented or surrendered for transfer or exchange shall
(if so required by the Company, the Trustee or the Security Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company, the Trustee and the Security Registrar, duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge will be made for any registration of transfer or
exchange of Notes, 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 Notes, other than exchanges
pursuant to Section 3.04, 11.06 or 13.07 not involving any transfer.
The Company shall not be required (i) to register, transfer or
exchange Notes of any series during a period beginning at the opening of
business 15 days before the day of the transmission of a notice of redemption
of Notes of such series selected for redemption under Section 13.03 and ending
at the close of business on the day of such transmission, or (ii) to register,
transfer or exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part, or (iii) to
register any transfer with respect to which the transferor or transferee, as
applicable, has failed to provide information requested pursuant to Section
3.05(a).
(d) In accordance with Section 12.09 hereof, and notwithstanding
any other provision in this Indenture to the contrary, neither the Company nor
the Security Registrar shall register the transfer of any Note if the
transferor of such Note is the Company or an Affiliate of the Company.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Notes. If
(i) any mutilated Note is surrendered to the Trustee at its Corporate Trust
Office or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Note, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them and any Paying Agent harmless, and
neither the Company nor the Trustee receives notice that such Note has been
acquired by a bona fide purchaser, then the Company shall execute and upon
Company Request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of
the same series of like tenor, form, terms and principal amount, bearing a
number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Note, pay the amount due on such Note in
accordance with its terms.
Upon the issuance of any new Note 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 respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note of any series issued pursuant to this Section shall
constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Note 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 Notes of that
series.
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 Notes.
SECTION 3.07. Payment of Interest; Interest Rights Preserved.
(a) Interest on any Note that is payable and is punctually paid or duly
provided for on any Interest Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered at the close
of business on the Regular Record Date for such interest notwithstanding the
cancellation of such Note upon any transfer or exchange subsequent to the
Regular Record Date. Payment of interest on Notes shall be made at the
Corporate Trust Office (except as otherwise specified pursuant to Section
3.01) or, at the option of the Company, by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register
or, if provided pursuant to Section 3.01 (and subject to any minimum amount
for wire transfers specified pursuant thereto) and in accordance with
arrangements satisfactory to the Trustee, at the option of the Holder by wire
transfer to an account designated by the Holder.
(b) Any interest on any Note that is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of his having been such a
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 such Notes (or their respective
Predecessor Notes) 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 such Note 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 the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to the Holders of such Notes at their addresses
as they appear in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names such Notes
(or their respective Predecessor Notes) 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
Notes in any other lawful manner not inconsistent with the requirements of any
securities exchange on which such Notes 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 Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Note.
SECTION 3.08. Cancellation. Unless otherwise specified pursuant
to Section 3.01 for Notes of any series, all Notes surrendered for payment,
redemption, transfer, exchange or credit against any sinking fund shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Notes previously authenticated and delivered
hereunder that the Company may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly cancelled by the Trustee. No Notes shall
be authenticated in lieu of or in exchange for any Notes cancelled as provided
in this Section, except as expressly permitted by this Indenture. All
cancelled Notes held by the Trustee shall be delivered to the Company for
destruction. The acquisition of any Notes by the Company shall not operate as
a redemption or satisfaction of the indebtedness represented thereby unless
and until such Notes are surrendered to the Trustee for cancellation.
SECTION 3.09. Computation of Interest. Except as otherwise
specified pursuant to Section 3.01 for Notes of any series, interest on the
Notes of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 3.10. Currency of Payments in Respect of Notes. (a)
Except as otherwise specified pursuant to Section 3.01 for Notes of any
series, payment of the principal of (and premium, if any) and interest on
Notes of such series will be made in Dollars.
(b) For purposes of any provision of the Indenture where the
Holders of Outstanding Notes may perform an Act that requires that a specified
percentage of the Outstanding Notes of all series perform such Act and for
purposes of any decision or determination by the Trustee of amounts due and
unpaid for the principal of (and premium, if any) and interest on the Notes of
all series in respect of which moneys are to be disbursed ratably, the
principal of (and premium, if any) and interest on the Outstanding Notes
denominated in a Currency other than Dollars will be the amount in Dollars
based upon exchange rates, determined as specified pursuant to Section 3.01
for Notes of such series, as of the date for determining whether the Holders
entitled to perform such Act have performed it or as of the date of such
decision or determination by the Trustee, as the case may be.
(c) Any decision or determination to be made regarding exchange
rates shall be made by an agent appointed by the Company; provided that such
agent shall accept such appointment in writing and the terms of such
appointment shall be acceptable to the Trustee and shall, in the opinion of
the Company and the Trustee at the time of such appointment, require such
agent to make such determination by a method consistent with the method
provided pursuant to Section 3.01 for the making of such decision or
determination. All decisions and determinations of such agent regarding
exchange rates shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and irrevocably binding upon
the Company, the Trustee and all Holders of the Notes.
SECTION 3.11. Payments in Designated Currencies. The Company may
provide pursuant to Section 3.01 for Notes of any series that the obligation
of the Company to pay the principal of (and premium, if any) and interest, if
any, on the Notes of such series be made in a Currency (the "Designated
Currency") other than Dollars. In such case, the Company agrees that (a) to
the fullest extent possible under applicable law, judgments in respect of such
Notes shall be given in the Designated Currency; (b) the obligation of the
Company to make payments in the Designated Currency of the principal of (and
premium, if any) and interest, if any, on such Notes shall, notwithstanding
any payment in any other Currency (whether pursuant to a judgment or
otherwise), be discharged only to the extent of the amount in the Designated
Currency that the Holder receiving such payment may, in accordance with normal
banking procedures, purchase with the sum paid in such other Currency (after
any premium and cost of exchange) on (i) the business day in the country of
issue of the Designated Currency or in the international banking community (in
the case of a composite currency) immediately following the day on which such
Holder receives such payment or (ii) if the Holder is unable to purchase the
Designated Currency in such country on such date, the next most practicable
date thereafter; (c) if the amount in the Designated Currency that may be so
purchased for any reason falls short of the amount originally due, the Company
shall pay such additional amounts as may be necessary to compensate for such
shortfall; and (d) any obligation of the Company not discharged by such
payment shall be due as a separate and independent obligation and, until
discharged as provided herein, shall continue in full force and effect.
SECTION 3.12. CUSIP Number. The Company in issuing the Notes may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use the applicable CUSIP number or numbers in any notices to Holders as a
convenience to such Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
or numbers printed in the notice or on the Notes and that reliance may be
placed only on the other identification numbers printed on the Notes. The
Company shall promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. (A) This
Indenture shall cease to be of further effect (except that the Company's
obligations under 4.03, 4.04, 4.05 and 6.07 shall survive) when all
Outstanding Notes theretofore authenticated and issued hereunder have been
delivered (other than any Notes which shall have been destroyed, lost or
stolen and which shall have been replaced or paid as provided in Section 3.06)
to the Trustee for cancellation and the Company has paid all sums payable
hereunder and under the Notes.
(B) If, pursuant to Section 3.01, provision is made for the
defeasance of Notes (or certain restrictive covenants applicable thereto) of a
series and if the Notes of such series are denominated and payable only in
Dollars (except as provided pursuant to Section 3.01), then the provisions of
this paragraph (B) shall be applicable (except as otherwise specified pursuant
to Section 3.01) for Notes of such series.
At the Company's option, either (a) the Company shall be deemed to
have been Discharged from its obligations with respect to the Notes of any
series on the 91st day after the applicable conditions set forth below have
been satisfied or (b) the Company shall cease to be under any obligation to
comply with any term, provision or condition set forth in Sections 10.01,
12.12 through 12.21 (and, if so specified pursuant to Section 3.01, any other
restrictive covenant added for the benefit of the Holders of such series
pursuant to Section 3.01), or any Event of Default relating thereto, with
respect to the Notes of such series at any time after the applicable
conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders (i) money,
(ii) Government Obligations, which through the payment of interest and
principal in respect thereof in accordance with their terms will provide
(without any reinvestment of such interest or principal), not later than one
day before the due date of any payment, money or (iii) a combination of (i)
and (ii) in an amount sufficient, in the opinion (with respect to (ii) and
(iii)) of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee at or
prior to the time of such deposit, to pay and discharge each installment of
principal of (and premium, if any), and interest on, the Outstanding Notes of
such series on the dates such installments of interest or principal (and
premium, if any) are due;
(2) no Default or Event of Default with respect to this Indenture
or the Notes of such series shall have occurred and be continuing on the date
of such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default under,
any other instrument to which the Company is a party or by which it is bound,
as evidenced to the Trustee in an Officers' Certificate delivered to the
Trustee concurrently with such deposit;
(3) the Company shall have delivered to the Trustee an opinion of
an independent tax counsel experienced in such matters to the effect that (and
containing no qualification and no assumption, other than an assumption of
fact customarily contained in legal opinions) the Holders of Notes of such
series will not recognize income, gain or loss for Federal income tax purposes
as a result of the Company's exercise of its option under this Section and
will be subject to Federal income tax on the same amount and in the same
manner and at the same time as would have been the case if such option had not
been exercised, and, in the case of Notes being Discharged;
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
provision will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming
or being deemed to be an "investment company" under the Investment Company Act
of 1940, as amended;
(5) the Company shall have paid or duly provided for payment of
all amounts then due to the Trustee pursuant to Section 6.07;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for herein relating to the satisfaction and discharge of
this Indenture have been complied with; and
(7) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, after the passage of 90 days after the deposit,
the trust funds will not be subject to the effect of any applicable Federal or
State bankruptcy, insolvency or similar law.
SECTION 4.02. Deposited Moneys and Government Obligations To Be
Held in Trust. Subject to the provisions of Section 4.04, all moneys and
Government Obligations deposited with the Trustee pursuant to Section 4.01 in
respect of Notes of a series shall be held in trust and applied by it, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders
of such Notes, of all sums due and to become due thereon for principal (and
premium, if any) and interest.
SECTION 4.03. Repayment to Company. The Trustee and any Paying
Agent shall promptly pay or return to the Company upon Company Request any
moneys or Government Obligations held by them at any time that are not
required for the payment of the principal of (and premium, if any) and
interest on the Notes of any series for which money or Government Obligations
have been deposited pursuant to Section 4.01.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Note of any series and remaining unclaimed
for two years after such principal (and premium, if any) or interest has
become due and payable shall be paid to the Company upon Company Request, or
(if then held by the Company) shall be discharged from such trust, and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Company (unless applicable law designates another Person) 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; provided, however, that the Trustee or such
Paying Agent before being required to make any such repayment, may at the
expense of the Company cause to be transmitted in the manner and to the extent
provided by Section 1.05, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 4.04. Reinstatement. If the Trustee is unable to apply
any money or Government Obligations in accordance with Section 4.01 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture with respect to
the Notes and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 4.01 until such time as the Trustee is
permitted to apply all such money or Government Obligations in accordance with
Section 4.01; provided, however, that if the Company has made any payment of
interest on or principal of (or premium, if any) any such Notes because of the
reinstatement of the Company's obligations, the Company shall be subrogated to
the rights of the Holders to receive such payment from the money or Government
Obligations held by the Trustee.
SECTION 4.05. Indemnity. The Company shall pay and indemnify the
Trustee and the Holders of Notes, of any series as to which the Company's
obligations under this Indenture have terminated against any tax, fee or other
charge resulting from the deposit of cash in accordance with Section 4.01 and
termination of the Company's obligations under this Indenture with respect to
the Notes of such series.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default" wherever
used herein with respect to Notes of any series means, unless otherwise
provided with respect to Notes of a particular series pursuant to Section
3.01, 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, pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) failure to pay any interest upon any Note of such series,
when it becomes due and payable, and continuance of such default for a period
of 30 days; or
(2) failure to pay the principal of (or premium, if any, on) any
Note of such series at its Maturity, upon redemption, repurchase, acceleration
or otherwise; or
(3) failure to make a deposit of any sinking fund payment, when
and as due by the terms of any Note of such series; or
(4) failure to perform or comply with any covenant or warranty
of the Company in this Indenture or established in or pursuant to the Board
Resolution or supplemental indenture, as the case may be, pursuant to which
the Notes of such series were issued as contemplated by Section 3.01 (other
than a covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or which expressly has been
included in this Indenture solely for the benefit of Notes of a series other
than such series), and continuance of such default or breach for a period in
excess 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 not less than 25% in principal amount of the Outstanding Notes of such
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) the entry of a decree or order for relief in respect of the
Company or any of its Restricted Subsidiaries by a court having jurisdiction
in the premises in an involuntary case under the Bankruptcy Code, as now or
hereafter constituted, or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of the
Company or any of its Restricted Subsidiaries or of any substantial part of
the Property of the Company or any of its Restricted Subsidiaries, or ordering
the winding up or liquidation of the affairs of the Company or any of its
Restricted Subsidiaries, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days, unless being
contested in good faith by the Company; or
(6) (i) the commencement by the Company or any of its Restricted
Subsidiaries of a voluntary case under the Bankruptcy Code, as now or
hereafter constituted, or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or (ii) the consent by it to the entry of an
order for relief in an involuntary case under any such law or to the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of the Company or any of its
Restricted Subsidiaries or of any substantial part of the Property of the
Company or any of its Restricted Subsidiaries, or (iii) the making of an
assignment for the benefit of creditors by the Company or any of its
Restricted Subsidiaries, or (iv) the admission in writing by the Company or
any of its Restricted Subsidiaries of its inability to pay its debts generally
as they become due, or (v) the taking of corporate action by the Company or
any of its Restricted Subsidiaries in furtherance of any of clauses (i)-(iv);
or
(7) a default under any evidence of Indebtedness of the Company
(other than the Notes) or any Restricted Subsidiary of the Company, or under
any mortgage, indenture, or other instrument under which there may be issued
or by which there may be secured or evidenced any Indebtedness of the Company
or any Restricted Subsidiary of the Company, whether such Indebtedness now
exists or is hereafter created, which default involves the failure to pay
principal on such Indebtedness at the final maturity thereof or which has
resulted in such Indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise become due and payable, in an
aggregate amount in excess of $5,000,000; provided, however, that if such
default under such evidence of Indebtedness shall be remedied or cured by the
Company or such Restricted Subsidiary in accordance with the terms thereof or
waived or such acceleration rescinded by the holders of such Indebtedness,
then even if the Notes have been accelerated (but not paid) as provided
herein, such Event of Default hereunder shall likewise be deemed to have been
remedied, cured or waived and such acceleration rescinded without any further
action of the Trustee or any Holder; or
(8) a default shall occur in the observance or performance of
any covenant or agreement contained in Sections 12.12 through 12.21 hereof; or
(9) one or more final judgments for the payment of money
aggregating in excess of U.S.$5,000,000 is or are outstanding against the
Company or any Restricted Subsidiary of the Company or against any Property of
either and such judgment or judgments have remained unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of 60 days from the
date of its or their entry; or
(10) any other Event of Default provided with respect to Notes of
that series pursuant to Section 3.01.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default of the type described
in Section 5.01 (5) or (6) above) 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 Notes of such series may declare the principal amount (or, if
any Notes of such series are Discount Notes, such portion of the principal
amount of such Discount Notes as may be specified in the terms of such
Discount Notes) of (and premium, if any) and all accrued but unpaid interest
on all the Notes of such series to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon
any such declaration such principal amount (or specified amount) and interest
(and premium, if any) shall become immediately due and payable. Upon payment
of such amounts in Dollars (or, if applicable, the Designated Currency
specified pursuant to Section 3.01), all obligations of the Company in respect
of the payment of principal of (and premium, if any) and interest on the Notes
of such series shall terminate.
If an Event of Default of the type described in Section 5.01(5) or
(6) above occurs with respect to the Notes of any series at the time
Outstanding, all unpaid principal of (and premium, if any) and accrued
interest on the Notes of such series then Outstanding shall ipso facto become
due and payable, without any declaration or other act on the part of the
Trustee or any Holder.
At any time after such a declaration of acceleration with respect
to Notes 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 at least 51% in principal amount of the
Outstanding Notes of such 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 in
Dollars (or, if applicable, the Designated Currency specified pursuant to
Section 3.01) sufficient to pay
(A) all overdue installments of interest on all Notes of
such series,
(B) the principal of (and premium, if any, on) any Notes
of such series that have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates then borne by such
Notes or at the rate or rates otherwise prescribed therefor in such Notes,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest on each Note at the rate or
rates then borne by such Notes or at the rate or rates otherwise prescribed
therefor in such Notes, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; provided, however, that all sums payable
under this clause (D) shall be paid in Dollars;
and
(2) all Events of Default with respect to Notes of such series,
other than the nonpayment of principal of (and premium, if any) and interest
on Notes of such series that have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission and waiver shall affect any subsequent Default
or impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the
principal of any Discount Notes shall have been accelerated and declared due
and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Discount Notes shall be deemed, for all purposes
hereunder, to be such portion of the principal thereof as shall be due and
payable as a result of such acceleration, and payment of such portion of the
principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Discount Notes.
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if an Event of Default
specified in Section 5.01 occurs with respect to the Notes of any series, the
Company will, upon demand of the Trustee or the Holders as specified above,
pay to the Trustee, for the benefit of the Holders of such Notes, the amount
then due and payable on such Notes, for the principal (and premium, if any)
and interest, if any, and interest upon the overdue principal (and premium, if
any) and, to the extent that payment of such interest shall be legally
enforceable, upon overdue installments of interest, at the rate or rates then
borne by such Notes or at the rate or rates otherwise prescribed therefor in
such Notes; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amount forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Notes, and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the Property of the Company or any other obligor upon such Notes
wherever situated.
If an Event of Default with respect to Notes 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 Notes of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement
of any covenant or agreement in this Indenture or in aid of the exercise of
any power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceedings, or any voluntary or involuntary case under the Bankruptcy Code,
as now or hereafter constituted, or any other applicable Federal or state
bankruptcy, insolvency or similar law relative to the Company or any other
obligor upon the Notes of a particular series or the Property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of such Notes shall then be due and payable as therein
expressed or by declaration of acceleration or otherwise; and irrespective of
whether the Trustee shall have made any demand on the Company for the payment
of overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the Notes of
such series and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders of such Notes allowed in
such judicial proceeding, and
(ii) to collect and receive any moneys or other Property payable
or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each
such 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 such Holders,
to pay to the Trustee any amount due it for the reasonable fees of its
counsel, and any other amounts due the Trustee under Section 6.07.
Nothing herein 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 Notes
of such series or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Notes. All rights of action and claims under this Indenture or the Notes, of
any series may be prosecuted and enforced by the Trustee without the
possession of any of such Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name, as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Notes 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 (and premium, if any) or
interest, upon presentation of the Notes of any series in respect of which
money has been collected and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.07; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Notes of such series,
in respect of which or for the benefit of which such money has been collected
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Notes for principal (and premium, if any) and
interest, respectively.
SECTION 5.07. Limitation on Suits. No Holder of any Note 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 such series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes of such series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of at least 51%
in principal amount of the Outstanding Notes of such series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other such Holders or of the Holders of Outstanding Notes of any other series,
or to obtain or to seek to obtain priority or preference over any other of
such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders. For the protection and enforcement of the provisions of this Section
5.07, each and every Holder of Notes of any series and the Trustee for such
series shall be entitled to such relief as can be given at law or in equity.
SECTION 5.08. Unconditional Right of Holders to Receive
Principal, Premium and Interest. Notwithstanding any other provision in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any)
and (subject to Section 3.07) interest on the respective Stated Maturity or
Maturities expressed in such Note (or, in the case of redemption or repayment,
on the Redemption Date or repayment date, as applicable) and to institute suit
for the enforcement of any such payment and interest thereon, and such right
shall not be impaired without the consent of such Holder.
SECTION 5.09. Rights and Remedies Cumulative. Except as
otherwise expressly provided elsewhere in this Indenture, 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 5.10. Delay or Omission Not Waiver. No delay or omission
of the Trustee or of any Holder 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 any acquiescence therein. Every right
and remedy given by this Indenture or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may be deemed expedient,
by the Trustee or by the Holders, as the case may be.
SECTION 5.11. Control by Holders. The Holders of at least 51% in
principal amount of the Outstanding Notes 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 Notes of such series; provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture;
(2) subject to the provisions of Section 6.01, the Trustee shall
have the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Responsible Officers of the Trustee,
determine that the proceeding so directed would be unjustly prejudicial to the
Holders of Notes of such series not joining in any such direction; and
(3) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction.
SECTION 5.12. Waiver of Past Defaults. The Holders of at least
51% in principal amount of the Outstanding Notes of any series may on behalf
of the Holders of all the Notes of any such series waive any past Default
hereunder with respect to such series and its consequences, except a Default
(1) in the payment of the principal of (or premium, if any) or
interest on any Note of such series, or
(2) in respect of a covenant or provision hereof that under
Article XI cannot be modified or amended without the consent of the Holder of
each Outstanding Note 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 the Notes of such series under this Indenture, but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 5.13. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken, suffered or omitted by it
as Trustee, the filing by any party litigant in such suit of an undertaking to
pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against
any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; provided,
however, that the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder or group of
Holders holding in the aggregate more than 10% in principal amount of the
Outstanding Notes of any series, or to any suit instituted by any Holder of a
Note for the enforcement of the payment of the principal of (or premium, if
any) or interest on such Note on or after the Stated Maturity or other
scheduled payment date therefor.
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) With
respect to Notes of any series, except during the continuance of an Event of
Default with respect to the Notes of such series,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case
of any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform to
the requirements of this Indenture.
(b) In case an Event of Default with respect to Notes of any
series has occurred and is continuing, the Trustee shall, with respect to the
Notes of such series, exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the effect
of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it with respect to Notes of any
series in good faith in accordance with the direction of the Holders of at
least 51% in principal amount of the Outstanding Notes of such series relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture; and
(4) the Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions
of this Section.
SECTION 6.02. Notice of Defaults. Within 60 days after the
occurrence of any Default hereunder with respect to Notes of any series of
which the Trustee is aware and which has not been cured or waived, the Trustee
shall in accordance with Section 1.05 give notice to all Holders of Notes of
such series of such Default; provided, however, that, except in the case of
Default in the payment of the principal of (or premium, if any) or interest on
any Note of such series or in the payment of any sinking fund installment with
respect to Notes of such series, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee
or a trust committee of directors and/or Responsible Officers of the Trustee
in good faith determine that the withholding of such notice is in the interest
of the Holders of Notes of such series. Upon receipt by the Trustee of a
certificate from the Company pursuant to Section 12.05, the Trustee shall
promptly notify the Holders of receipt by the Trustee of such certificate and
the matters described therein.
SECTION 6.03. Certain Rights of Trustee. Except as otherwise
provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Notes of any series pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might
be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note 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;
(g) the Trustee may with the Company's consent execute any of
the trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein, in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes, if any, of any series. The Trustee shall not be
accountable for the use or application by the Company of any Notes or the
proceeds thereof.
SECTION 6.05. May Hold Notes. The Trustee, any Paying Agent, the
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 Notes,
and, subject to Sections 6.10 and 6.13, may otherwise deal with the Company
with the same rights it would have if it were not Trustee, Paying Agent,
Security Registrar or such other agent.
SECTION 6.06. Money Held in Trust. Moneys held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
set forth below or as otherwise required by law. The Trustee shall not be
under any liability for interest on any money received by it hereunder except
as otherwise agreed in writing with the Company. The Trustee shall segregate
moneys held by the Trustee hereunder in one Currency (or unit thereof) from
any moneys in any other Currencies (or units thereof), notwithstanding any
provision herein which would otherwise permit the Trustee to commingle such
amounts.
SECTION 6.07. Compensation and Reimbursement. The Company
agrees:
(1) to pay to the Trustee from time to time such compensation in
Dollars for all services rendered by it hereunder as may be mutually agreed
upon in writing by the Company and the Trustee (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 in Dollars upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or
bad faith; and
(3) to indemnify in Dollars the Trustee for, and to hold it
harmless against, any and all loss, damage, claim, liability or expense
(including any taxes, other than taxes based on the income of the Trustee)
incurred without negligence or bad faith on its part; arising out of or in
connection with the acceptance or administration of this trust or performance
of its duties hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
The obligations of the Company under this Section 6.07 to
compensate and indemnify the Trustee for expenses, disbursements and advances
shall constitute additional indebtedness under this Indenture and shall
survive the satisfaction and discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of a Default specified in Sections
5.01(5) and 5.01(6), the expenses are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 6.08. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder that shall be:
(1) a corporation organized and doing business under the laws of
the United States, authorized under such laws to exercise corporate trust
powers and subject to supervision or examination by Federal, state,
territorial or District of Columbia authority, or
(2) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as Trustee
pursuant to a rule, regulation or order of the Commission, authorized under
such laws to exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political subdivision
thereof substantially equivalent to supervision or examination applicable to
United States institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article. Neither the Company nor any
Affiliate of the Company shall serve as Trustee for the Notes of any series
issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Notes
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered
to the Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Notes of such series.
(c) The Trustee may be removed at any time with respect to the
Notes of any series and a successor Trustee appointed by Act of the Holders of
at least 51% in principal amount of the Outstanding Notes of such series,
delivered to the Trustee and to the Company. If, within 30 days after the
giving of notice of removal to the Trustee, a successor Trustee has not been
appointed by the Company or the Holders to replace the removed Trustee, or has
not accepted such appointment, as hereinafter provided, the removed Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Notes of such series.
(d) If at any time:
(1) the Trustee shall fail to comply, pursuant to Section
6.08 hereof, with Section 310(b) of the Trust Indenture Act with respect to
the Notes of any series after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Note of such series for at
least six months, unless the Trustee's duty to resign is stayed in accordance
with the provisions of Section 310(b) of the Trust Indenture Act, or
(2) the Trustee shall cease to be eligible under Section
6.09 of this Indenture with respect to the Notes of any series 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 a
decree or order for relief by a court having jurisdiction in the premises
shall have been entered in respect of the Trustee in an involuntary case under
the Bankruptcy Code, as now or hereafter constituted, or any other applicable
Federal or state bankruptcy, insolvency or similar law; or a decree or order
by a court having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trustee or of its Property or
affairs, or any public officer shall take charge or control of the Trustee or
of its Property or affairs for the purpose of rehabilitation, conservation,
winding up or liquidation, or
(4) the Trustee shall commence a voluntary case under the
Bankruptcy Code, as now or hereafter constituted, or any other applicable
Federal or state bankruptcy, insolvency or similar law or shall consent to the
appointment of or taking possession by a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Trustee or
its Property or affairs, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally
as they become due, or shall take corporate action in furtherance of any such
action, or
(5) there shall be an unreasonable increase in the fees of
the Trustee, or
(6) a successor in interest to the entity serving as the
Trustee, by reason of merger or consolidation, shall be reasonably
unacceptable to the Company or the Holders of at least 51% in principal amount
of the Outstanding Notes,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Notes, or (ii) subject to Section 5.13, any Holder
who has been a bona fide Holder of a Note of any series for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee for the Notes of such series. If, within
30 days after the giving of notice of removal to the Trustee, a successor
Trustee has not been appointed by the Company or the Holders to replace the
removed Trustee, or has not accepted such appointment, as hereinafter
provided, the removed Trustee may petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Notes of such
series.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Notes of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Notes of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Notes of one or
more or all of such series and that at any time there shall be only one
Trustee with respect to the Notes 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 Notes of any series shall be appointed
by Act of the Holders of at least 51% in principal amount of the Outstanding
Notes of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the Notes of such
series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Notes of any series
shall have been so appointed by the Company or the Holders of such series and
accepted appointment in the manner hereinafter provided, any Holder who has
been a bona fide Holder of a Note of such series for at least six months may,
subject to Section 5.13, 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 Notes of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Notes of any series and each
appointment of a successor Trustee with respect to the Notes of any series in
the manner and to the extent provided in Section 1.05 to the Holders of Notes
of such series. Each notice shall include the name of the successor Trustee
with respect to the Notes of such series and the address of its Corporate
Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. (a) In the
case of an appointment hereunder of a successor Trustee with respect to all
Notes, each 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 request of the Company or
the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all Property and
money held by such retiring Trustee hereunder, subject nevertheless to its
claim, if any, provided for in Section 6.07.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Notes of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Notes of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Notes 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 Notes, 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 Notes 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 any 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
any such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Notes 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 Notes of that or those series to which
the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 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 of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that 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 Notes 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 Notes so authenticated with the same
effect as if such successor Trustee had itself authenticated such Notes. In
case any Notes shall not have been authenticated by such predecessor Trustee,
any such successor Trustee may authenticate and deliver such Notes, in either
its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
SECTION 6.13. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 6.14. Appointment of Authenticating Agent. As long as
any Notes of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint an authenticating agent (the "Authenticating Agent") which
shall be authorized to act on behalf of the Trustee to authenticate Notes
issued upon exchange, registration of transfer, partial redemption or
repayment or pursuant to Section 3.06. Notes of each such series
authenticated by such Authenticating Agent shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by such Trustee. Wherever reference is made in this Indenture
to the authentication and delivery of Notes of any series by the Trustee for
such series or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include authentication and delivery on behalf of the
Trustee for such series by an Authenticating Agent for such series and a
Certificate of Authentication executed on behalf of such Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by Federal, state, territorial or District of
Columbia authority, having a combined capital and surplus of at least
$10,000,000 (determined as provided in Section 6.09 with respect to the
Trustee).
Any corporation into which any 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 any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business of any Authenticating Agent, shall continue to be
the Authenticating Agent with respect to all series of Notes for which it
served as Authenticating Agent without the execution or filing of any paper or
any further act on the part of the Trustee for such series or such
Authenticating Agent. Any Authenticating Agent may at any time, and if it
shall cease to be eligible shall, resign by giving written notice of
resignation to the applicable Trustee and to the Company.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect
to one or more of any series of Notes, the Trustee for such series shall upon
Company Request appoint a successor Authenticating Agent, and the Company
shall provide notice of such appointment to all Holders of Notes of such
series in the manner and to the extent provided in Section 1.05. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities of
its predecessor hereunder, with like effect as if originally named as
Authenticating Agent. The Company agrees to pay to the Authenticating Agent
for such series from time to time reasonable compensation for its services.
The Authenticating Agent for the Notes of any series shall have no
responsibility or liability for any action taken by it as such at the
direction of the Trustee for such series.
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
with respect to Notes of each series for which it acts as Trustee:
(a) semiannually on June 30 and December 31 of each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of June 15 or December 15, respectively; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list in
similar form and of similar content as of a date not more than 15 days prior
to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar for such series, no such list need be furnished.
SECTION 7.02. Preservation of Information; Communication to
Holders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of
Holders contained in the most recent list furnished to the Trustee as provided
in Section 7.01, received by it in the capacity of Paying Agent or Security
Registrar (if so acting) hereunder, and all information filed with it within
the two preceding years pursuant to Section 7.03(c)(2).
The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished and, after two years of
its filing, may destroy any information filed with it pursuant to Section
7.03(c)(2).
(b) Holders may communicate as provided in Section 312(b) of the
Trust Indenture Act with other Holders with respect to their rights under this
Indenture or under the Notes.
(c) Each Holder of Notes, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any Paying Agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 7.02(b), regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 7.02(b).
SECTION 7.03. Reports by Trustee. (a) Within 30 days after May
15 of each year commencing with the year 1998, the Trustee shall transmit to
all Holders of Notes of any series with respect to which it acts as Trustee,
in the manner hereinafter provided in this Section 7.03, a brief report dated
as of such May 15 to the extent that would be required under Section 313(a) of
the Trust Indenture Act had this Indenture been qualified under the Trust
Indenture Act.
(b) The Trustee shall comply with Sections 313(b) and 313(c) of
the Trust Indenture Act.
(c) A copy of each such report shall, at the time of its
transmission to Holders, be filed by the Trustee with each stock exchange, if
any, upon which any Notes of such series are listed, with the Commission and
also with the Company. The Company will promptly notify the Trustee when any
series of Notes are listed on any stock exchange.
SECTION 7.04. Reports by Company. The Company shall file with
the Trustee and shall provide, or cause the Trustee to provide, to all of the
Holders, within 15 days after it is required to file them with the Commission,
copies of its annual reports, quarterly reports and other information,
documents and reports (collectively, "information") which the Company or any
of its Subsidiaries is required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act or pursuant to the provisions of the
Trust Indenture Act. If the Company or its Subsidiaries is not required to
file any such information with the Commission, the Company shall nonetheless
file with the Trustee and shall provide, or cause the Trustee to provide, to
the Holders (within 15 days after the time such information would have been
required to be filed with the Commission) copies of the Company's annual and
quarterly financial statements, and shall promptly upon written request supply
such information to any prospective purchaser of Notes designated by a Holder.
The Company and any other obligor on the Notes shall also comply with the
other provisions of Section 314 of the Trust Indenture Act and shall, to the
extent not already included in the information provided to Holders and
prospective purchasers as required above, provide to such Holders and
prospective purchasers any such additional information required to be provided
to such Persons pursuant to Rule 144A under the Securities Act.
Delivery of such information to the Trustee is for informational
purposes only and the Trustee's receipt of such information shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates delivered to it
hereunder).
ARTICLE VIII
Concerning the Holders
SECTION 8.01. Acts of Holders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent or proxy 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. Whenever in this Indenture it is provided that the
Holders of a specified percentage in aggregate principal amount of the
Outstanding Notes of any series may take any Act, the fact that the Holders of
such specified percentage have joined therein may be evidenced (a) by the
instrument or instruments executed by Holders in person or by agent or proxy
appointed in writing, or (b) by the record of Holders voting in favor thereof
at any meeting of such Holders duly called and held in accordance with the
provisions of Article IX, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Holders.
SECTION 8.02. Proof of Ownership; Proof of Execution of
Instruments by Holders. The ownership of Notes of any series shall be proved
by the Security Register for such series or by a certificate of the Security
Registrar for such series.
Subject to the provisions of Sections 6.01, 6.03 and 9.05, proof
of the execution of a writing appointing an agent or proxy and of the
execution of any instrument by a Holder or his agent or proxy shall be
sufficient and conclusive in favor of the Trustee and the Company if made in
the following manner:
The fact and date of the execution by any such person of any
instrument may be proved by the certificate of any notary public or other
officer authorized to take acknowledgment of deeds, that the person executing
such instrument acknowledged to him the execution thereof, or by an affidavit
of a witness to such execution sworn to before any such notary or other such
officer. Where such execution is by an officer of a corporation or
association or a member of a partnership on behalf of such corporation,
association or partnership, as the case may be, or by any other person acting
in a representative capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority.
The record of any Holders' meeting shall be proved in the manner
provided in Section 9.06.
The Trustee may in any instance require further proof with respect
to any of the matters referred to in this Section so long as the request is a
reasonable one.
If the Company shall solicit from the Holders of Notes of any
series any Act, the Company may, at its option, by Board Resolution, fix in
advance a record date for the determination of Holders of Notes entitled to
take such Act, but the Company shall have no obligation to do so. Any such
record date shall be fixed at the Company's discretion. If such a record date
is fixed, such Act may be sought or given before or after the record date, but
only the Holders of Notes of record at the close of business on such record
date shall be deemed to be Holders of Notes for the purpose of determining
whether Holders of the requisite proportion of Outstanding Notes of such
series have authorized or agreed or consented to such Act, and for that
purpose the Outstanding Notes of such series shall be computed as of such
record date.
SECTION 8.03. Persons Deemed Owners. Prior to due presentment of
a Note for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 3.07) interest, if
any, on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and none of the Company, the Trustee or any agent of the
Company or the Trustee shall be affected by notice to the contrary. All
payments made to any Holder, or upon such Holder's order, shall be valid, and,
to the extent of the sum or sums paid, effectual to satisfy and discharge the
liability for moneys payable upon such Note.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 8.04. Revocation of Consents; Future Holders Bound. At
any time prior to (but not after) the evidencing to the Trustee, as provided
in Section 8.01, of the taking of any Act by the Holders of the percentage in
aggregate principal amount of the Outstanding Notes specified in this
Indenture in connection with such Act, any Holder of a Note (the number,
letter or other distinguishing symbol of which is shown by the evidence to be
included in the Notes the Holders of which have consented to such Act) may, by
filing written notice with the Trustee at the Corporate Trust Office and upon
proof of ownership as provided in Section 8.02, revoke such Act so far as it
concerns such Note. Except as aforesaid, any such Act taken by the Holder of
any Note shall be conclusive and binding upon such Holder and upon all future
Holders of such Note and of any Notes issued on transfer or in lieu thereof or
in exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon such Note or such other Notes. Any
action taken by the Holders of the specified percentage in aggregate principal
amount of the Notes of any series Outstanding hereunder shall be conclusively
binding upon the Company, the Trustee and the Holders of all Notes of such
series.
ARTICLE IX
Holders' Meetings
SECTION 9.01. Purposes of Meetings. A meeting of Holders of any
or all series may be called at any time and from time to time pursuant to the
provisions of this Article IX for any of the following purposes:
(1) to give any notice to the Company or to the Trustee for such
series, or to give any directions to the Trustee for such series, or to
consent to the waiving of any Default hereunder and its consequences, or to
take any other action authorized to be taken by Holders pursuant to any of the
provisions of Article V;
(2) to remove the Trustee for such series and appoint a
successor Trustee pursuant to the provisions of Article VI;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of the
Outstanding Notes of any one or more or all series, as the case may be, under
any other provision of this Indenture or under applicable law.
SECTION 9.02. Call of Meetings by Trustee. The Trustee for any
series may at any time call a meeting of Holders of such series to take any
action specified in Section 9.01, to be held at such time or times and at such
place or places as the Trustee for such series shall determine. Notice of
every meeting of the Holders of any series, setting forth the time and place
of such meeting and in general terms the action proposed to be taken at such
meeting, shall be given to Holders of such series in the manner and to the
extent provided in Section 1.05. Such notice shall be given not less than 20
days or more than 90 days prior to the date fixed for the meeting.
SECTION 9.03. Call of Meetings by Company or Holders. In case at
any time the Company, pursuant to a Board Resolution, or the Holders of at
least 10% in aggregate principal amount of the Outstanding Notes of a series
or of all series, as the case may be, shall have requested the Trustee for
such series to call a meeting of Holders of any or all such series by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have given the notice of such meeting
within 20 days after the receipt of such request, then the Company or such
Holders may determine the time or times and the place or places for such
meetings and may call such meetings to take any action authorized in Section
9.01, by giving notice thereof as provided in Section 9.02.
SECTION 9.04. Qualifications for Voting. To be entitled to vote
at any meeting of Holders a Person shall be (a) a Holder of a Note of the
series with respect to which such meeting is being held or (b) a Person
appointed by an instrument in writing as agent or proxy by such Holder. The
only Persons who shall be entitled to be present or to speak at any meeting of
Holders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee for the series with respect to
which such meeting is being held and its counsel and any representatives of
the Company and its counsel.
SECTION 9.05. Regulations. Notwithstanding any other provisions
of this Indenture, the Trustee for any series may make such reasonable
regulations as it may deem advisable for any meeting of Holders of Notes of
such series, in regard to proof of the holding of Notes of such series and of
the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called
by the Company or by Holders of such series as provided in Section 9.03, in
which case the Company or the Holders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by a majority vote of the
meeting.
Subject to the provisos in the definition of "Outstanding", at any
meeting each Holder of a Note of the series with respect to which such meeting
is being held or proxy therefor shall be entitled to vote in such manner so
that whether the specified percentage required for any Act has been voted may
be calculated by the inspectors; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Note challenged as not Outstanding
and ruled by the chairman of the meeting to be not Outstanding. The chairman
of the meeting shall have no right to vote other than by virtue of Outstanding
Notes of such series held by him or instruments in writing duly designating
him as the person to vote on behalf of Holders of Notes of such series. Any
meeting of Holders with respect to which a meeting was duly called pursuant to
the provisions of Section 9.02 or 9.03 may be adjourned from time to time by a
majority of such Holders present and the meeting may be held as so adjourned
without further notice.
SECTION 9.06. Voting. The vote upon any resolution submitted to
any meeting of Holders with respect to which such meeting is being held shall
be by written ballots on which shall be subscribed the signatures of such
Holders or of their representatives by proxy and the serial number or numbers
of the Notes held or represented by them. The permanent chairman of the
meeting shall appoint two inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in duplicate of
all votes cast at the meeting. A record in duplicate of the proceedings of
each meeting of Holders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was transmitted as provided in
Section 9.02. The record shall show the serial numbers of the Notes voting in
favor of or against any resolution. The record shall be signed and verified
by the affidavits of the permanent chairman and secretary of the meeting and
one of the duplicates shall be delivered to the Company and the other to the
Trustee to be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
SECTION 9.07. No Delay of Rights by Meeting. Nothing in this
Article IX contained shall be deemed or construed to authorize or permit, by
reason of any call of a meeting of Holders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or
to any Holder under any of the provisions of the Indenture or of the Notes of
any series.
ARTICLE X
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 10.01. Company May Consolidate, etc., Only on Certain
Terms.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to (i) consolidate with or be a party to a merger with any other
Person or (ii) directly or indirectly sell, transfer, discount, lease or
otherwise dispose (other than in the ordinary course of business, which shall
include the sale of participations in the Company's financing transactions) of
all or any substantial part (as defined below) of the Property of the Company
and its Restricted Subsidiaries to any other Person; provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or into the
Company or any Wholly-Owned Restricted Subsidiary of the Company or any
corporation which, immediately after giving effect to such transaction, will
become a Wholly-Owned Restricted Subsidiary of the Company so long as in any
merger or consolidation involving the Company, the Company shall be the
surviving or continuing corporation;
(2) the Company may consolidate with, or merge into, another corporation or
sell, lease, transfer or otherwise dispose of all or a substantial part of its
Property to another corporation if
(i) either (x) the Company is the surviving or continuing corporation in
such merger or consolidation or (y) if the Company is not the surviving or
continuing corporation, the corporation formed by such consolidation or into
which the Company is merged or the corporation that acquires or leases, all or
a substantial part of the Property of the Company (the "New Company") shall be
a corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of
the principal of and premium, if any, and interest on, all the Notes and the
due observance and performance of each of the covenants and other terms of
this Indenture and the Notes to be observed or performed by the Company;
(ii) immediately after such transactions, and after giving effect thereto,
no Default or Event of Default would exist; and
(iii) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that such consolidation, merger,
conveyance, sale, transfer, lease or other disposition and such supplemental
indenture comply with this Article X and that all conditions precedent herein
provided for relating to such transaction have been complied with; and
(3) any Restricted Subsidiary may sell, transfer, lease or otherwise dispose
of all or any substantial part of its Property to the Company or any Wholly-
Owned Restricted Subsidiary of the Company.
(b) The Company shall not permit any of its Restricted Subsidiaries to issue
or sell any shares of stock of any class (including as "stock" for the
purposes of this Section 10.01, any warrants, rights or options to purchase or
otherwise acquire stock or other securities exchangeable for or convertible
into stock) of such Restricted Subsidiary to any Person other than the Company
or a Wholly-Owned Restricted Subsidiary of the Company if, as a result
thereof, the Restricted Subsidiary issuing or selling its stock ceases to be a
Restricted Subsidiary.
(c) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, transfer or otherwise dispose of (x) any shares of
stock in any Restricted Subsidiary if, as a result thereof, the Restricted
Subsidiary whose stock is being sold, transferred or disposed of ceases to be
a Restricted Subsidiary, or (y) any Indebtedness of any Restricted Subsidiary,
unless:
(1) simultaneously with such sale, transfer, or disposition, all shares of
stock and all Indebtedness of such Restricted Subsidiary at the time owned by
the Company and by every other Subsidiary shall be sold, transferred or
disposed of as an entirety;
(2) the Board of Directors of the Company shall have determined, as evidenced
by a resolution thereof, that the retention of such stock and Indebtedness is
no longer in the best interests of the Company;
(3) such stock and Indebtedness is sold, transferred or otherwise disposed of
to a Person, for a cash consideration and on terms reasonably deemed by the
Board of Directors to be adequate and satisfactory;
(4) the Restricted Subsidiary being disposed of shall not have any continuing
investment in the Company or any other Restricted Subsidiary not being
simultaneously disposed of; and
(5) such sale or other disposition does not involve a substantial part of the
Property of the Company and its Restricted Subsidiaries.
(d) As used in this Section 10.01, a sale, transfer, discount, lease or other
disposition of Property shall be deemed to be a "substantial part" of the
Property of the Company and its Restricted Subsidiaries if the book value of
such Property, when added to the book value of all other Property sold,
transferred, leased or otherwise disposed of by the Company and its Restricted
Subsidiaries (other than in the ordinary course of business) during the fiscal
year in which such sale, lease or other disposition occurs, exceeds 10% of
consolidated assets of the Company and its Restricted Subsidiaries, determined
as of the end of the immediately preceding fiscal year. The book value of
Property sold, transferred, leased or otherwise disposed of shall be excluded
from the calculation of "substantial part" if (A) (i) such disposition shall
be for an amount not less than the fair market value of such assets as
determined in good faith by the Board of Directors of the Company, (ii) after
giving effect to such disposition, no Default or Event of Default shall have
occurred and be continuing, and (iii) within 180 days of such disposition an
amount equal to the net proceeds received from such sale shall be used to (x)
acquire Property, plant or equipment used or useful in carrying on the
business of the Company and its Restricted Subsidiaries, or (y) retire Senior
Debt of the Company or any Restricted Subsidiary of the Company, (B) such
disposition is a sale and leaseback transaction permitted by Section 12.17, or
(C) such disposition is a Receivables Securitization Transaction permitted by
Section 12.14.
SECTION 10.02. Successor Corporation Substituted. Upon any
consolidation with or merger into any other corporation, or any conveyance,
sale, transfer, lease or other disposition of all or a substantial part of the
Property of the Company in accordance with Section 10.01, the successor
corporation formed by such consolidation or into which the Company is merged
or to which such conveyance, sale, transfer, lease or other disposition 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 corporation had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor corporation shall be relieved
of all obligations and covenants under this Indenture and the Notes.
SECTION 10.03. Opinion of Counsel. The Trustee shall be entitled
to receive and, subject to Sections 6.01 and 6.03, shall be protected in
relying upon an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, conveyance or lease and any such assumption
complies with the provisions of this Article X.
ARTICLE XI
Supplemental Indentures
SECTION 11.01. 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, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by such successor of the covenants of the Company
herein and in the Notes contained; or
(2) to add to the covenants of the Company, for the benefit of
the Holders of all or any series of Notes appertaining thereto (and, if such
covenants are to be for the benefit of less than all such series, 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 (and, if such Events
of Default are to be applicable to less than all series of Notes, stating that
such Events of Default are expressly being included solely to be applicable to
such series); or
(4) to eliminate any restrictions on the payment of principal of
(or premium, if any, on) or interest on Notes; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become effective
only when there is no Outstanding Note of any series created prior to the
execution of such supplemental indenture that is entitled to the benefit of
such provision; or
(6) to establish the form or terms of Notes, if any, of any
series as permitted by Sections 2.01 and 3.01 or to permit or facilitate the
issuance of Notes of any series in uncertificated form; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to one or more series of Notes
and to add to or change any of the provisions of this Indenture as shall be
necessary for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 6.11; or
(8) to evidence any changes to Section 6.09 or 6.10 permitted by
the terms thereof; or
(9) 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 interests of the Holders of the Notes of any series in any material
respect; or
(10) to cure any ambiguity, to correct or supplement any
provision herein that 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 that shall not be inconsistent with any
provision of this Indenture, provided such other provisions shall not
adversely affect the interests of the Holders of Outstanding Notes of any
series created prior to the execution of such supplemental indenture in any
material respect; or
(11) to modify the restrictions on the Notes, and the procedures
for, resales and other transfers of the Notes to reflect any change in
applicable law or regulation (or the interpretation thereof) or to provide
alternative procedures in compliance with applicable law and practices
relating to the resale or other transfer of restricted securities generally;
or
(12) to comply with the requirements of the Commission in order
to effect (or, thereafter, maintain) the qualification of this Indenture under
the Trust Indenture Act.
SECTION 11.02. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of at least 51% in principal amount of the
Outstanding Notes of each series affected by such supplemental indenture
voting separately, 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 any supplemental indenture or of modifying
in any manner the rights of the Holders under this Indenture of such Notes;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note of each such series affected
thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount thereof
or the interest thereon or any premium payable thereon, or change Place of
Payment or the Currency in which the principal of (and premium, if any) or
interest on such Note is denominated or payable, or reduce the amount of the
principal of a Discount Note that would be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 5.02, or impair
the right to institute suit for the enforcement of any payment on or after the
Stated Maturity thereof (or, in the case of redemption or repayment, on or
after the Redemption Date or repayment date); or
(2) reduce the percentage in principal amount of the Outstanding
Notes of any series, the consent of whose Holders is required for any
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 5.12
or Section 12.06, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Note 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 12.06, or the deletion of this
proviso, in accordance with the requirements of Sections 6.11 and 11.01(7).
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.
A supplemental indenture that changes or eliminates any covenant
or other provision of this Indenture with respect to one or more particular
series of Notes or that modifies the rights of the Holders of Notes 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 Notes of any other
series.
SECTION 11.03. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted 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 that
materially adversely affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
SECTION 11.04. 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
Notes theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby.
SECTION 11.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect (regardless of
whether or not this Indenture is then required by applicable law to be
"qualified" thereunder).
SECTION 11.06. Reference in Notes to Supplemental Indentures.
Notes 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 approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Notes of any series so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Notes of such series.
SECTION 11.07. Notice of Supplemental Indenture. Promptly after
the execution by the Company and the Trustee of any supplemental indenture
pursuant to Section 11.02, the Company shall transmit to the Holders of Notes
of any series affected thereby a notice setting forth the substance of such
supplemental indenture.
ARTICLE XII
Covenants
SECTION 12.01. Payment of Principal, Premium and Interest. The
Company covenants and agrees for the benefit of each series of Notes that it
will duly and punctually pay the principal of (and premium, if any) and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 12.02. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, and in each other
Place of Payment for any series of Notes, an office or agency where Notes of
such series may be presented or surrendered for payment, where Notes of such
series may be surrendered for transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes of such series and this
Indenture may be served. 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 in the Borough
of Manhattan, The City of New York, and the Company hereby appoints the
Trustee as its agent to receive all presentations, surrenders, notices and
demands.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or
outside of any Place of Payment), and may from time to time rescind any such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligations described in the
preceding paragraph. The Company will give prompt written notice to the
Trustee of any such additional designation or rescission of designation and
any change in the location of any such different or additional office or
agency.
SECTION 12.03. Money for Notes; 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 Notes, it will, on or before each due date of the principal of (and
premium, if any) or interest on any of the Notes of such series, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to pay the principal (and premium, if any) or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents with
respect to any series of Notes it will, on or prior to each due date of the
principal (and premium, if any) or interest on any Notes of such series,
deposit with any such Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled thereto, and (unless any 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 with respect to any
series of Notes 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) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Notes of such series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any Default by the Company (or
any other obligor upon the Notes of such series) in the making of any payment
of principal of (and premium, if any) or interest on the Notes of such series;
and
(3) at any time during the continuance of any such Default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
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 to be
held by the Trustee upon the same trusts as those upon which such sums were
held by the Company or such Paying Agent, and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Note of any series and remaining unclaimed
for two years after such principal (and premium, if any) or interest has
become due and payable shall be paid to the Company upon Company Request, or
(if then held by the Company) shall be discharged from such trust, and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Company (unless applicable law designates another Person) 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; provided, however, that the Trustee or such
Paying Agent before being required to make any such repayment, may at the
expense of the Company cause to be transmitted in the manner and to the extent
provided by Section 1.05, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 12.04. Corporate Existence. The Company shall do or cause
to be done all things necessary to preserve and keep in full force and effect,
and shall cause each of its Restricted Subsidiaries to do all things necessary
to preserve and keep in full force and effect, its corporate (or other)
existence and all licenses, rights, franchises and permits necessary to the
proper conduct of its business, except where the failure to maintain any such
license, right, franchise or permit would not have a Material Adverse Effect;
provided, however, that the foregoing shall not prevent (x) any transaction
permitted by Article X hereof, or (y) the Company from dissolving or
liquidating any of its Restricted Subsidiaries and distributing its assets to
its shareholders so long as after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing and the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 12.05. Officers' Certificate as to Default. The Company
shall deliver to the Trustee within 120 days after the end of each fiscal year
of the Company ending after the date hereof, an Officers' Certificate
indicating whether the Company has complied with all conditions and covenants
under this Indenture, and if the Company is in Default thereunder, specifying
all such Defaults and the nature thereof. The Company shall also deliver
written notice to the Trustee within five Business Days after any officer of
the Company has become aware of the occurrence of any event that such officer
knows would constitute a Default or an Event of Default under this Indenture
or an event of default, or event which with the giving of notice or the lapse
of time or both would become an event of default, under any instrument of the
kind described in Section 5.01(9).
For the purposes of this Section 12.05, compliance shall be
determined without regard to any period of grace or requirement of notice
under this Indenture.
SECTION 12.06. Waiver of Certain Covenants. The Company may,
with respect to the Notes of any series, omit in any particular instance to
comply with any covenant set forth in Sections 12.12 through 12.21 (and, if so
specified pursuant to Section 3.01 any other restrictive covenant added for
the benefit of the Holders of such series pursuant to Section 3.01) if, before
the time for such compliance, the Holders of at least 51% in principal amount
of the Outstanding Notes of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant, but no such waiver shall extend to or affect such covenant except to
the extent so expressly waived or shall extend to or affect any other covenant
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such covenant shall remain in
full force and effect.
SECTION 12.07. Maintenance of Property. The Company shall
maintain, preserve and keep, and shall cause each of its Restricted
Subsidiaries to maintain, preserve and keep, its Properties (other than
Property held for sale or lease) which are used or useful in the conduct of
its business (whether owned in fee or a leasehold interest) in good repair and
working order and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times the efficiency
thereof shall be maintained unless and to the extent that failure to so
maintain, preserve and keep certain Properties would not have a Material
Adverse Effect, and will not be disadvantageous in any material respect to the
Holders; provided that with respect to Property leased to third parties, the
obligations under this Section 12.07 may be satisfied by imposing the same
requirements upon the lessees of such Property and by exercising such degree
of supervision and enforcement of such obligations as shall be commercially
reasonable.
SECTION 12.08. Payment of Taxes and Other Claims; Compliance with
Laws. The Company will promptly pay and discharge, and will cause each
Restricted Subsidiary promptly to pay and discharge, all lawful taxes,
assessments and governmental charges or levies imposed upon the Company or
such Restricted Subsidiary, respectively, or upon or in respect of all or any
part of the Property or business of the Company or such Restricted Subsidiary,
all trade accounts payable in accordance with usual and customary business
terms, and all claims for work, labor or materials, which if unpaid might
become a Lien or charge upon any Property of the Company or such Restricted
Subsidiary; provided the Company or such Restricted Subsidiary shall not be
required to pay any such tax, assessment, charge, levy, account payable or
claim if failure to do so would not have a Material Adverse Effect, or if (i)
the validity, applicability or amount thereof is being contested in good faith
by appropriate actions or proceedings, and (ii) the Company or such Restricted
Subsidiary shall set aside on its books, reserves deemed by it to be adequate
with respect thereto, if required by GAAP. The Company will promptly comply
and will cause each Restricted Subsidiary to comply with all laws, ordinances
or governmental rules and regulations to which it is subject including,
without limitation, the Occupational Safety and Health Act of 1970, ERISA and
all laws, ordinances, governmental rules and regulations relating to
environmental protection in all applicable jurisdictions, the violation of
which might reasonably be expected to result in any Lien or charge upon any
Property of the Company or any Restricted Subsidiary which might reasonably be
expected to have a Material Adverse Effect, unless the validity or
applicability thereof is being contested in good faith by appropriate actions
or proceedings, and the Company or such Restricted Subsidiary shall set aside
on its books reserves deemed by it to be adequate with respect thereto.
SECTION 12.09. Repurchases and Resales of Notes by the Company
and its Affiliates. Neither the Company nor any of its Affiliates, directly
or indirectly, may repurchase or make any offer to repurchase Notes of any
series unless the offer has been made to repurchase the Notes, pro rata, from
all Holders of the Notes of such series at the same time and upon the same
terms.
In case the Company repurchases any Notes, such Notes shall thereafter be
cancelled and no Notes shall be issued in substitution therefor. In case any
Affiliate of the Company shall repurchase Notes, such Notes shall continue to
be held by such Affiliate and shall not be resold by such Affiliate to any
Person other than the Company or to another Affiliate of the Company.
SECTION 12.10. Insurance. The Company shall maintain, and shall
cause each of its Restricted Subsidiaries to maintain, insurance coverage by
financially sound and reputable insurers in such forms and amounts and against
such risks as are customary for corporations of established reputation engaged
in the same or a similar business and owning and operating similar Properties;
provided that with respect to Property leased to third parties, the
obligations under this Section 12.10 may be satisfied by imposing the same
requirements upon the lessees of such Property and by exercising such degree
of supervision and enforcement of such obligations of such lessees as shall be
commercially reasonable.
SECTION 12.11. Nature of Business. Neither the Company nor any
Restricted Subsidiary of the Company will engage in any business other than
the Finance Business.
SECTION 12.12. Maintenance of Consolidated Adjusted Net Worth.
The Company shall at all times keep and maintain Consolidated Adjusted Net
Worth in an amount not less than (i) in the case of its fiscal quarter ending
April 30, 1997, U.S.$70,000,000, and (ii) in the case of each fiscal quarter
thereafter, an amount equal to the sum of the amount required to be maintained
in the immediately previous fiscal quarter plus 25% of Consolidated Net Income
for such immediately previous fiscal quarter (but without deduction in the
event of a deficit in Consolidated Net Income).
SECTION 12.13. Limitation on Indebtedness. (a) The Company
shall not at any time permit both
(i) the aggregate unpaid principal amount of Senior Obligations to exceed
600% of the sum of (A) Consolidated Adjusted Net Worth and (B) the aggregate
unpaid principal amount of Subordinated Debt; and
(ii) the aggregate unpaid principal amount of Total Debt to exceed 750% of
Consolidated Adjusted Net Worth.
(b) The Company shall not at any time permit the aggregate unpaid amount of
Priority Obligations to exceed 10% of Consolidated Adjusted Net Worth as at
the end of the fiscal year of the Company then most recently ended.
SECTION 12.14. Limitation on Receivables Securitizations. The
Company shall not, and shall not permit any Restricted Subsidiary to, enter
into any Receivables Securitization Transaction; provided however the Company
or any Restricted Subsidiary may enter into any Receivables Securitization
Transaction so long as, after giving effect thereto and to the application of
the proceeds thereof, the aggregate value of assets then subject to all
Receivables Securitization Transactions does not exceed 40% of the sum of (i)
the aggregate value of assets then subject to all Receivables Securitization
Transactions, plus (without duplication) (ii) total assets of the Company and
its Restricted Subsidiaries determined on a consolidated basis in accordance
with GAAP.
SECTION 12.15. Limitation on Liens. The Company shall not, and
shall not permit any Restricted Subsidiary to, create or incur, or suffer to
be incurred or to exist, any mortgage, pledge, security interest, encumbrance,
charge or Lien of any kind on its or their Property, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
Property for the purpose of subjecting the same to the payment of obligations
in priority to the payment of its or their general creditors, or acquire or
agree to acquire, or permit any Restricted Subsidiary to acquire, any Property
upon conditional sales agreements or other title retention devices, except:
(a) Liens for property taxes and assessments and/or governmental charges or
levies and Liens securing claims or demands of mechanics and materialmen;
provided that payment thereof is not at the time required by Section 12.08;
(b) Liens of or resulting from any judgment or award, (x) which, if unpaid
would not otherwise be an Event of Default or (y) the time for the appeal or
petition for rehearing of which shall not have expired, or in respect of which
the Company or a Restricted Subsidiary shall at any time in good faith be
prosecuting an appeal or proceeding for a review and in respect of which a
stay of execution pending such appeal or proceeding for review shall have been
secured and for which the Company or such Restricted Subsidiary has set aside
on its books reserves deemed by it to be adequate with respect thereto;
provided that the aggregate amount so secured by Liens pursuant to this clause
(b) shall not at any time exceed an amount equal to 10% of Consolidated
Adjusted Net Worth;
(c) Liens, charges, encumbrances and priority claims incidental to the
conduct of business or the ownership of Properties (including warehousemen's
and attorneys' liens and statutory landlords' liens) and deposits, pledges or
Liens to secure the performance of bids, tenders or trade contracts, or to
secure statutory obligations, surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money; provided in each case, the obligation
secured is not overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings;
(d) minor survey exceptions or minor encumbrances, easements or reservations,
or rights of others for rights-of-way, utilities and other similar purposes,
or zoning or other restrictions as to the use of real Properties, which do not
materially impair their use in the operation of the business of the Company
and its Restricted Subsidiaries;
(e) mortgages, Liens or security interests securing Indebtedness of a
Restricted Subsidiary to the Company;
(f) mortgages, Liens or security interests securing Non-Recourse Debt;
provided that such mortgages, Liens or security interests shall be limited to
the Property financed by such Non-Recourse Debt and the lease or security
agreement to which such Property is subject;
(g) mortgages, conditional sale contracts, security interests or other
arrangements for the retention of title (including Capitalized Leases)
incurred after the date hereof given to secure the payment of the purchase
price incurred in connection with the acquisition of fixed assets useful and
intended to be used in carrying on the business of the Company or a Restricted
Subsidiary, which Liens are incurred contemporaneously with or within 180 days
after such acquisition, and Liens existing on such fixed assets at the time of
acquisition thereof or at the time of acquisition by the Company or a
Restricted Subsidiary of any business entity then owning such fixed assets,
whether or not such existing Liens were given to secure the payment of the
purchase price of the fixed assets to which they attach so long as they were
not incurred, extended or renewed in contemplation of such acquisition;
provided that (i) the Lien or charge shall attach solely to the Property
acquired or purchased, (ii) at the time of acquisition of such fixed assets,
the aggregate amount remaining unpaid on all Indebtedness secured by Liens on
such fixed assets whether or not assumed by the Company or a Restricted
Subsidiary shall not exceed the lesser of the total purchase price or fair
market value at the time of acquisition of such fixed assets (as determined in
good faith by the Board of Directors of the Company) and (iii) all such
Indebtedness shall comply with the applicable limitations provided in Section
12.13;
(h) Liens incurred in connection with any Receivables Securitization
Transaction permitted by Section 12.14; provided that such Liens attach solely
to the accounts receivable subject to such Receivables Securitization
Transaction; and
(i) in addition to the Liens permitted by the preceding paragraphs (a)
through (h) of this Section 12.15, Liens securing Senior Debt of the Company
or any Restricted Subsidiary; provided that such Senior Debt shall be
permitted by Section 12.13.
SECTION 12.16. Limitation on Restricted Payments. The Company
shall not, and with respect to clauses (d) and (e) below each Restricted
Subsidiary of the Company shall not, except as hereinafter provided:
(a) Declare or pay any dividends, either in cash or Property, on any shares
of its capital stock of any class (except dividends or other distributions
payable solely in shares of capital stock of the Company); or
(b) Directly or indirectly, or through any Restricted Subsidiary, purchase,
redeem or retire any shares of its capital stock of any class or any warrants,
rights or options to purchase or acquire any shares of its capital stock or
other securities convertible into stock; or
(c) Make any other payment or distribution, either directly or indirectly or
through any Restricted Subsidiary, in respect of its capital stock; or
(d) Purchase, redeem, prepay or otherwise retire or acquire the whole or any
part of any issue of Capital Debt other than (i) in exchange for shares of
capital stock of the Company or (ii) out of the proceeds of the concurrent
issuance of Capital Debt permitted by Section 12.13 with a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of the Capital Debt being purchased, redeemed, prepaid or otherwise
retired or acquired; or
(e) Purchase, redeem, prepay or otherwise retire or acquire the whole or any
part of any issue of Subordinated Debt other than (i) in exchange for shares
of capital stock of the Company or (ii) out of the proceeds of the concurrent
issuance of Capital Debt or Subordinated Debt permitted by Section 12.13 with
a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of the Subordinated Debt being purchased, redeemed,
prepaid or otherwise retired or acquired.
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock or Capital Debt or Subordinated Debt and
warrants, rights or options, and all such other distributions being herein
collectively called "Restricted Payments"), if at such time or after giving
effect thereto the aggregate amount of Restricted Payments made during the
period from and after January 31, 1997, to and including the date of the
making of the Restricted Payment in question, would exceed the sum of (i)
U.S.$l0,000,000 plus (ii) to the extent that Capital Debt outstanding on the
date hereof is exchanged for capital stock of the Company, an amount equal to
all interest which would have been payable with respect to such exchanged
Capital Debt during the period from the date of such exchange to the date of
any determination hereunder, plus (iii) the net cash proceeds to the Company
from the issue or sale subsequent to January 31, 1997 of Capital Debt,
Subordinated Debt or shares of capital stock of the Company or warrants,
rights or options to purchase or acquire any shares of its capital stock, plus
(iv) 75% of Consolidated Net Income for such period, computed on a cumulative
basis for said entire period (or if such Consolidated Net Income is a deficit
figure, then minus 100% of such deficit).
The Company will not declare any dividend which constitutes a Restricted
Payment payable more than 60 days after the date of declaration thereof and
will not declare or make any Restricted Payment if at such time or after
giving effect thereto a Default or an Event of Default has occurred and is
continuing.
For the purposes of this Section 12.16, the amount of any Restricted Payment
declared, paid or distributed in Property of the Company shall be deemed to be
the greater of the book value or fair market value (as determined in good
faith by the Board of Directors of the Company) of such Property at the time
of the making of the Restricted Payment in question.
SECTION 12.17. Limitation on Sale and Leasebacks. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
arrangement whereby the Company or any Restricted Subsidiary shall sell or
transfer any Property owned by the Company or such Restricted Subsidiary to
any Person other than the Company or a Restricted Subsidiary and thereupon the
Company or any Restricted Subsidiary shall lease or intend to lease, as
lessee, the same Property, except that the Company or a Restricted Subsidiary
may enter into such an arrangement if (i) such Property is newly acquired or
constructed Property, (ii) the Company or such Restricted Subsidiary shall
enter into such arrangement within 180 days following the acquisition or
construction of such Property, and (iii) after giving effect to the
consummation of such arrangement, the aggregate sale price of the Property
subject to such arrangements entered into by the Company and its Restricted
Subsidiaries since January 31, 1997 does not exceed 10% of the consolidated
assets of the Company and its Restricted Subsidiaries, determined as of the
end of the immediately preceding fiscal year.
SECTION 12.18. Transactions with Affiliates. The Company shall
not, and shall not permit any Restricted Subsidiary to, enter into or be a
party to any transaction or arrangement with any of its Affiliates (including,
without limitation, the purchase from, sale to or exchange of Property with,
or the rendering of any service by or for, any Affiliate) other than a Wholly-
Owned Restricted Subsidiary, except in the ordinary course of and pursuant to
the reasonable requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company
or such Restricted Subsidiary than would obtain in a comparable arm's-length
transaction with a Person other than an Affiliate.
In the event a Restricted Subsidiary is redesignated as an Unrestricted
Subsidiary pursuant to Section 12.21, all transactions and arrangements
between such Subsidiary and the Company or any Restricted Subsidiary which
occurred or existed at any time during the 12-month period ending with the
date of such redesignation shall, for purposes of this Section, be deemed to
have been entered into immediately after such redesignation.
SECTION 12.19. Voluntary Retirement of Subordinated Debt or
Capital Debt. The Company shall not, except as permitted under Section 12.16,
directly or indirectly or through any Subsidiary, purchase, redeem or
otherwise retire or acquire prior to the respective stated maturities thereof,
the whole or any part of any issue of Subordinated Debt or Capital Debt except
in accordance with the applicable provisions thereof or of any indenture,
agreement or similar instrument under or pursuant to which such Subordinated
Debt or Capital Debt has been issued, unconditionally requiring payments into
a sinking fund, periodic prepayments, or other analogous payments for the
amortization of such Subordinated Debt or Capital Debt.
SECTION 12.20. Amendment of Subordinated Debt or Capital Debt.
The Company shall not, at any time, be a party to any amendment or
modification of any payment or subordination provisions applicable to
Subordinated Debt or Capital Debt outstanding on the date hereof other than an
amendment or modification which extends the Weighted Average Life to Maturity
thereof, reduces the interest rate thereon or further subordinates such
Subordinated Debt or Capital Debt.
SECTION 12.21. Designation of Subsidiaries. (a) The Board of
Directors of the Company may at any time and from time to time, upon not less
than 15 days' prior written notice given to each of the Holders of the Notes
at the time outstanding, designate a Restricted Subsidiary as an Unrestricted
Subsidiary; provided that (x) such Restricted Subsidiary has not previously
been designated an Unrestricted Subsidiary pursuant to this Section 12.21 and
(y) at the time of such designation and after giving effect thereto no Default
or Event of Default shall have occurred and be continuing.
(b) The Board of Directors of the Company may at any time and from time to
time, upon not less than 15 days' prior written notice given to each of the
Holders of the Notes at the time outstanding, designate an Unrestricted
Subsidiary as a Restricted Subsidiary; provided that (x) such Unrestricted
Subsidiary has not previously been designated a Restricted Subsidiary pursuant
to this Section 12.21 and (y) at the time of such designation and after giving
effect thereto no Default or Event of Default shall have occurred and be
continuing.
(c) Any notice of designation pursuant to this Section 12.21 shall be
accompanied by a certificate signed by an authorized financial officer of the
Company demonstrating by calculations in reasonable detail that the provisions
of this Section 12.21 have been complied with in connection with such
designation and setting forth the name of each other Subsidiary (if any) which
has or will become an Unrestricted Subsidiary or a Restricted Subsidiary, as
the case may be, as a result of any such designation.
SECTION 12.22. Calculation of Original Issue Discount. If any
Discount Notes are issued hereunder, the Company shall file with the Trustee
promptly at the end of each calendar year a written notice specifying the
amount of original issue discount (including daily rates and accrual periods)
accrued on any such Outstanding Discount Notes as of the end of such year.
ARTICLE XIII
Redemption and Repayment of Notes
SECTION 13.01. Applicability of Article. Notes of any series
that are redeemable or repayable before their Stated Maturity shall be
redeemable or repayable in accordance with their terms and (except as
otherwise specified pursuant to Section 3.01 for Notes of any series) in
accordance with this Article.
SECTION 13.02. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Notes shall be evidenced by a Board
Resolution. In case of any redemption at the election of the Company of less
than all of the Notes of any series pursuant to Section 13.03, the Company
shall, at least 60 days prior to the Redemption Date fixed by the Company
(unless a shorter period shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Notes of such
series to be redeemed. In case of any redemption at the election of the
Company of all of the Notes of any series, the Company shall, at least 45 days
prior to the Redemption Date fixed by the Company (unless a shorter period
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date. In the case of any redemption of Notes prior to the expiration of any
restriction on such redemption provided in the terms of such Notes or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restrictions.
If less than all the Notes of any series with differing issue
dates, interest rates and Stated Maturities are to be redeemed, the Company in
its sole discretion shall select the particular Notes to be redeemed and shall
notify the Trustee in writing thereof at least 45 days prior to the relevant
Redemption Date.
SECTION 13.03. Selection by Trustee of Notes To Be Redeemed.
Except in the case of a redemption in whole of the Notes of such series, if
less than all the Notes of any series are to be redeemed at the option of the
Company, the particular Notes to be redeemed shall be selected not more than
60 days prior to the Redemption Date by the Trustee, from the Outstanding
Notes of such series not previously called for redemption, by such method as
the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Notes of such series or any authorized denomination in excess
thereof) of the principal amount of Notes of such series in a denomination
larger than the minimum authorized denomination for Notes of such series. In
any case where more than one Note of such series is registered in the same
name, the Trustee in its discretion may treat the aggregate principal amount
so registered as if it were represented by one Note of such series.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Note redeemed or to be redeemed only in part, to the portion
of the principal amount of such Note that has been or is to be redeemed.
SECTION 13.04. Notice of Redemption. Notice of redemption 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, not less than 30 days and not more
than 60 days prior to the Redemption Date, to the Holders of Notes of any
series to be redeemed in whole or in part pursuant to this Article XIII, in
the manner provided in Section 1.05. Any notice so given shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. Failure to give such notice, or any defect in such
notice to the Holder of any Note of a series designated for redemption, in
whole or in part, shall not affect the sufficiency of any notice of redemption
with respect to the Holder of any other Note of such series.
All notices of redemption shall identify the Notes to be redeemed
(including, if applicable, CUSIP numbers) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that Notes of such series are being redeemed by the Company
pursuant to provisions contained in this Indenture or the terms of the Notes
of such series or a supplemental indenture establishing such series, if such
be the case, together with a brief statement of the facts permitting such
redemption,
(4) if less than all Outstanding Notes of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Notes to be redeemed,
(5) that on the Redemption Date the Redemption Price will become
due and payable upon each such Note to be redeemed, and that interest thereon,
if any, shall cease to accrue on and after said date,
(6) the Place or Places of Payment where such Notes are to be
surrendered for payment of the Redemption Price,
(7) that the redemption is for a sinking fund, if such is the
case, and
(8) if any Note of any series is to be redeemed in part, that on
and after the Redemption Date, upon surrender of such Note appertaining
thereto, a new Note or Notes of such series in principal amount equal to the
unredeemed portion thereof will be issued or, in the case of Notes providing
appropriate space for such notation, at the option of the Holders, the
Trustee, in lieu of delivering a new Note or Notes as aforesaid, may make a
notation on such Note of the payment of the redeemed portion thereof.
SECTION 13.05. Deposit of Redemption Price. On or prior to the
Redemption Date for any Notes, 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 12.03) an amount of money
in Dollars (or, if applicable, the Designated Currency specified pursuant to
Section 3.01) sufficient to pay the Redemption Price of such Notes or any
portions thereof that are to be redeemed on that date.
SECTION 13.06. Notes Payable on Redemption Date. Notice of
redemption having been given as aforesaid, any Notes so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price and
from and after such date (unless the Company shall default in the payment of
the Redemption Price) such Notes shall cease to bear interest. Upon surrender
of any such Note for redemption in accordance with said notice, such Note
shall be paid by the Company at the Redemption Price; provided, however, that
installments of interest that have a Stated Maturity on or prior to the
Redemption Date for such Notes shall be payable according to the terms of such
Notes and the provisions of Section 3.07.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Note.
SECTION 13.07. Notes Redeemed in Part. Any Note that is to be
redeemed only in part shall be surrendered at the Corporate Trustee Office or
such other office or agency of the Company as is specified pursuant to Section
3.01 with, if the Company, the Security Registrar or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory
to the Company, the Security Registrar and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing, and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Note without service charge, a new Note or Notes of the same series, of
like tenor and form, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered; except that if
a Global Note is so surrendered, the Company shall execute, and the Trustee
shall authenticate and deliver to the Depositary for such Global Note, without
service charge, a new Global Note in a denomination equal to and in exchange
for the unredeemed portion of the principal of the Global Note so surrendered.
In the case of a Note providing appropriate space for such notation, at the
option of the Holder thereof, the Trustee, in lieu of delivering a new Note or
Notes as aforesaid, may make a notation on such Note of the payment of the
redeemed portion thereof.
SECTION 13.08. Repayment of Notes at Holder's Option. If so
provided pursuant to Section 3.01, a Holder may require the repayment by the
Company of its Notes on the optional repayment dates, at the repayment prices
and in accordance with the procedures established pursuant to Section 3.01 and
set forth in such Notes.
Upon receipt of notice of exercise of the option for repayment and
the Notes to be repaid as set forth in such Notes, the Trustee shall give
notice to the Company not less than 20 days prior to each optional repayment
date of such optional repayment date and of the principal amount of Notes to
be repaid on such date.
On or prior to any optional repayment 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
12.03) an amount of money in Dollars (or, if applicable, the Designated
Currency specified pursuant to Section 3.01) an amount of money sufficient to
pay the optional repayment price, and accrued interest (and premium, if any)
thereon to such date, of all the Notes or portions thereof which are to be
repaid on such date. The Trustee will use such money to repay such Notes
pursuant to the terms set forth in such Notes. The provisions of Section
13.07 hereof shall apply to Notes repaid in part.
ARTICLE XIV
Sinking Funds
SECTION 14.01. Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of Notes of
a series except as otherwise specified pursuant to Section 3.01 for Notes of
such series.
The minimum amount of any sinking fund payment provided for by the
terms of Notes of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for
by the terms of Notes of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Notes of any series,
the amount of any cash sinking fund payment may be subject to reduction as
provided in Section 14.02. Each sinking fund payment shall be applied to the
redemption of Notes of any series as provided for by the terms of Notes of
such series.
SECTION 14.02. Satisfaction of Mandatory Sinking Fund Payments
with Notes. In lieu of making all or any part of a mandatory sinking fund
payment with respect to any Notes of a series in cash, the Company may at its
option, at any time no more than sixteen months and no less than 45 days prior
to the date on which such sinking fund payment is due, deliver to the Trustee
Notes of such series theretofore purchased or otherwise acquired by the
Company, except Notes of such series that have been redeemed through the
application of mandatory or optional sinking fund payments pursuant to the
terms of the Notes of such series, accompanied by a Company Order instructing
the Trustee to credit such obligations and stating that the Notes of such
series were originally issued by the Company by way of bona fide sale or other
negotiation for value; provided that such Notes shall not have been previously
so credited. Such Notes shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Notes for redemption
through operation of the sinking fund and the amount of such mandatory sinking
fund payment shall be reduced accordingly.
SECTION 14.03. Redemption of Notes for Sinking Fund. Not less
than 60 days prior to each sinking fund payment date for any series of Notes
(unless a shorter period shall be satisfactory to the Trustee), the Company
will deliver to the Trustee an Officers' Certificate specifying the amount of
the next ensuing sinking fund payment for that series pursuant to the terms of
that series, the portion thereof, if any, that is to be satisfied by payment
of money in Dollars (or, if applicable, the Designated Currency specified
pursuant to Section 3.01) and the portion thereof, if any, that is to be
satisfied by delivering and crediting Notes of such series pursuant to Section
14.02 and whether the Company intends to exercise its rights to make a
permitted optional sinking fund payment with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. In the case of the
failure of the Company to deliver such certificate (or, as required by this
Indenture, the Notes specified in such certificate), the sinking fund payment
due on the next succeeding sinking fund payment date for such series shall be
paid entirely in cash and shall be sufficient to redeem the principal amount
of the Notes of such series subject to a mandatory sinking fund payment
without the right to deliver or credit Notes as provided in Section 14.02 and
without the right to make any optional sinking fund payment with respect to
such series at such time.
Any sinking fund payment or payments (mandatory or optional) made
in cash plus any unused balance of any preceding sinking fund payments made
with respect to the Notes of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent)
on the sinking fund payment date on which such payment is made (or, if such
payment is made before a sinking fund payment date, on the sinking fund
payment date immediately following the date of such payment) to the redemption
of Notes of such series at the Redemption Price specified in such Notes with
respect to the sinking fund. Any sinking fund moneys not so applied or
allocated by the Trustee (or by the Company if the Company is acting as its
own Paying Agent) to the redemption of Notes shall be added to the next
sinking fund payment received by the Trustee (or if the Company is acting as
its own Paying Agent, segregated and held in trust as provided in Section
12.03) for such series and, together with such payment (or such amount so
segregated) shall be applied in accordance with the provisions of this Section
14.03. Any and all sinking fund moneys with respect to the Notes of any
particular series held by the Trustee (or if the Company is acting as its own
Paying Agent, segregated and held in trust as provided in Section 12.03) on
the last sinking fund payment date with respect to Notes of such series and
not held for the payment or redemption of particular Notes of such series
shall be applied by the Trustee (or by the Company if the Company is acting as
its own Paying Agent), together with other moneys, if necessary, to be
deposited (or segregated) sufficient for the purpose, to the payment of the
principal of the Notes of such series at Maturity.
The Trustee shall select or cause to be selected the Notes to be
redeemed upon such sinking fund payment date in the manner specified in
Section 13.03 and the Company shall cause notice of the redemption thereof to
be given in the manner provided in Section 13.04. Such notice having been
duly given, the redemption of such Notes shall be made upon the terms and in
the manner stated in Section 13.06.
On or before each sinking fund payment date, the Company shall pay
to the Trustee (or, if the Company is acting as its own Paying Agent, the
Company shall segregate and hold in trust as provided in Section 12.03) in
cash a sum in Dollars (or, if applicable, the Designated Currency specified
pursuant to Section 3.01) equal to the principal and any interest accrued to
the Redemption Date for Notes or portions thereof to be redeemed on such
sinking fund payment date pursuant to this Section.
Neither the Trustee nor the Company shall redeem any Notes of a
series with sinking fund moneys or mail any notice of redemption of Notes of
such series by operation of the sinking fund for such series during the
continuance of a Default in payment of interest, if any, on any Notes of such
series or of any Event of Default (other than an Event of Default occurring as
a consequence of this paragraph) with respect to the Notes of such series,
except that, if the notice of redemption shall have been provided in
accordance with the provisions hereof, the Trustee (or the Company if the
Company is then acting as its own Paying Agent) shall redeem such Notes if
cash sufficient for that purpose shall be deposited with the Trustee (or
segregated by the Company) for that purpose in accordance with the terms of
this Article. Except as aforesaid, any moneys in the sinking fund for such
series at the time when any such Default or Event of Default shall occur and
any moneys thereafter paid into such sinking fund shall, during the
continuance of such Default or Event of Default, be held as security for the
payment of the Notes of such series; provided, however, that in case such
Default or Event of Default shall have been cured or waived as provided
herein, such moneys shall thereafter be applied on the next sinking fund
payment date for the Notes of such series on which such moneys may be applied
pursuant to the provisions of this Section.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the day and year first above written.
FINANCIAL FEDERAL CREDIT INC.
By
Name:
Title:
By
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By
Name:
Title:
96
<PAGE>
Exhibit 10.24
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT, made as of the 1st day of January, 1998, by and
between Financial Federal Corporation (the "Company") and Clarence Y. Palitz,
Jr. (the "Employee");
W I T N E S S E T H :
WHEREAS, Employee is an employee of the Company; and
WHEREAS, the Employee and the Company desire to set forth in
writing herein the terms and conditions of their agreement with respect to the
payment to Employee, on a deferred basis, of some of the Employee's salary for
his services to the Company for the months of January, 1998 through December,
1998.
NOW, THEREFORE, the parties hereto agree as follows:
1. Certain amounts of salary earned by the Employee for each of
the months of January 1998 through December 1998, shall be deferred and, in
lieu of current payment thereof, the Company shall pay to the Employee the sum
of $100,000.00 on each February 1 commencing in 2007 and terminating in 2011,
and $71,500.00 on February 1, 2012. The amounts so deferred are shown on
Exhibit 1 to this Agreement. In the event the Employee's employment is
terminated for any reason whatsoever during this period, the amount payable to
the Employee pursuant to this paragraph shall be proportionately reduced (in
the same proportion as the number of days or portions thereof from the date of
such termination of employment to the end of this period bears to the entire
period), and any payment provided for in paragraphs "2", "3", "5" or "7" of
this Agreement shall be further discounted as described in paragraph "4" of
this Agreement.
2. In the event of i). Employee's death, ii). Employee's
retirement from the Company and its affiliates (and employment is not obtained
with another company in substantially the same types of business as the
Company is engaged) or iii). Employee's leave of absence owing to a bona fide
disability (which shall be defined as the incapacity to perform any employment
which would be appropriate given the prior physical status, intellectual
ability and experience of the Employee, due to a mental or physical disability
which shall have been certified by an independent physician and which has
lasted or can be expected to last for a continuous period of not less than
twelve months), then, in the Company's sole discretion, either a). the Company
shall pay the amount specified in paragraph "1" on the date there specified or
b). all amounts payable pursuant to paragraph "1" of this Agreement shall be
re-computed as described in paragraph "4" of this Agreement and shall be paid
in total on the first day of the first month 30 days after the date of the
death, retirement or disability. Payments of amounts due pursuant to the
terms of this paragraph shall be made first to the Employee, if living, then
to the Employee's Beneficiary, Anka K. Palitz, the Employee's wife, or if she
is not then alive, to the Employee's Estate.
3. Except for the events specified in paragraph "2" of this
Agreement, in the event of termination of Employee's employment by the Company
for any other reason whatsoever (other than a transfer to employment with an
affiliate of the Company), or in the event the Employee terminates his
employment with the Company and its affiliates, then, in either such event,
the amount payable pursuant to paragraph "1" of this Agreement shall be paid
to Employee on the first day of the first month following such termination of
employment in an amount calculated as set forth in paragraph "4" of this
Agreement.
4. If, pursuant to paragraphs "2", "3", "5" or "7" of this
Agreement, payment of any amount provided for in paragraph "1" of this
Agreement is to be made earlier than the due date set forth in such paragraph
"1", the amount to be paid is the amount as provided in paragraph "1" of this
Agreement, discounted at the rate of 5.86% per annum, compounded monthly, from
the date any such payments would have been due (as set forth in paragraph "1"
of the Agreement) to the actual date of payment. For purposes of
illustration, a payment of $500.00 would be due with respect to a $633.87
payment which would have been due and payable forty-eight (48) months later.
5. If any federal, state or other tax law or regulation or any
determination by any taxing authority with respect to the Employee would cause
any amounts due pursuant to this Agreement to become taxable to the Employee
before payment thereof, except for taxes owing due to FICA, FUTA, or other
employment taxes, then the Employee, irrespective and notwithstanding any
other provisions of this Agreement, shall have the right, upon written notice
to the Company, to require payment of any of the installments or portions
thereof specified in paragraph "1" of this Agreement. The notice shall
specify a date within ninety (90) days of such notice when payment is to be
made. The payment shall be made in an amount calculated as set forth in
paragraph "4" of this Agreement.
6. Employee shall have no right to pledge, hypothecate, assign
or otherwise dispose of any amounts due or to become due hereunder.
Employee's right to receive payments under this Agreement shall be no greater
than those of any other unsecured creditor of the Company.
7. Should, at any time, more than 50 percent of the combined
voting power of the Company's then outstanding voting securities be held by
any person, entity or group of persons, directly or indirectly, within the
meaning of section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended ("Act"), other than those persons, entities or groups of persons
owning over 14 percent of the combined voting power as of the date hereof, or
a liquidation or dissolution of the Company or of the sale of all or
substantially all of the Company's assets, then a). the Company may, upon 30
days notice, pay to Employee the amount payable pursuant to paragraph "1" of
this Agreement on the first day of the first month following such notice in an
amount calculated as set forth in paragraph "4" of this Agreement, OR b).
Employee may, upon 30 days notice, require that the Company pay to Employee
the amount payable pursuant to paragraph "1" of this Agreement on the first
day of the first month following such notice in an amount calculated as set
forth in paragraph "4" of this Agreement.
8. During the term of this Agreement, the Company shall furnish
to Employee, no later than the 30th day of each fiscal year, a schedule
setting forth in reasonable detail the changes occurring during the preceding
year and the balance as at the end of the preceding year with respect to the
amount accrued by the Company on account of all sums payable hereunder to
Employee.
9. Employee shall have the right at any time, by written notice
to the Company, to change the Beneficiary named in paragraph "2" hereof, with
such notice acknowledged in writing by the Company.
10. This Agreement contains the entire understanding of the
parties hereto relating to the payments described herein; however, this
Agreement shall not affect any other salary nor any other benefit that
Employee may be or may become entitled to, except as required by law. This
written agreement represents the entire final agreement between the parties
relating to the payments described herein and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties. This
agreement cannot be amended, modified or changed except by a writing signed by
both parties. Only an officer of the Company with the title of Senior Vice
President or a more senior officer may accept this agreement or agree to any
amendments, modifications or changes.
11. This Agreement shall be governed and construed in accordance
with the laws of the State of New York. If any provision of this Agreement is
rendered or declared invalid, illegal or ineffective by any existing or
subsequently enacted legislation or decision of a court of competent
jurisdiction, such legislation or decision shall only invalidate such
provision to the extent so rendered or declared invalid, illegal or
ineffective in such jurisdiction only and shall not impair, invalidate or
nullify the remainder of this Agreement which shall remain in full force and
effect.
12. Any controversy or claim arising out of or relating to this
Agreement or any alleged breach thereof shall be settled by arbitration in New
York City in accordance with the rules of the American Arbitration Association
governing contract disputes and judgment upon the award rendered by any
arbitrator(s) may be entered in any court of appropriate jurisdiction; the
Federal Arbitration Act and the applicable laws of the State of New York shall
govern.
IN WITNESS WHEREOF, Company has caused this Agreement to be
executed by its duly authorized officers and Employee has hereunto set his
hand on the day and year first above written.
FINANCIAL FEDERAL CORPORATION
BY:
(Title)
EMPLOYEE:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES AS
OF JANUARY 31, 1998 AND THE RELATED CONSOLIDATED STATEMENT OF OPERATIONS AND
RETAINED EARNINGS FOR THE SIX MONTH PERIOD THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> JAN-31-1998
<CASH> 2110
<SECURITIES> 0
<RECEIVABLES> 660347
<ALLOWANCES> 11701
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 652214
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 7404
<OTHER-SE> 106402
<TOTAL-LIABILITY-AND-EQUITY> 652214
<SALES> 0
<TOTAL-REVENUES> 33991
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1425
<INTEREST-EXPENSE> 15316
<INCOME-PRETAX> 12954
<INCOME-TAX> 5030
<INCOME-CONTINUING> 7924
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7924
<EPS-PRIMARY> .54
<EPS-DILUTED> .48
<FN>
<F1>THE FINANCIAL STATEMENTS INCLUDE A NONCLASSIFIED BALANCE SHEET
</FN>
</TABLE>
