SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-27314
CITYSCAPE FINANCIAL CORP.
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Delaware 11-2994671
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
565 Taxter Road, Elmsford, New York 10523-5200
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(Address of principal executive offices, including zip code)
(914) 592-6677
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year if changed since
last report)
Indicate by check 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
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APPLICABLE ONLY TO CORPORATE ISSUERS:
14,757,028 shares $.01 par value, of
Common Stock, as of May 8, 1996
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CITYSCAPE FINANCIAL CORP.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31, 1996
Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statement of Financial Condition at March 31, 1996 2
Consolidated Statements of Operations for the three months ended
March 31, 1996 and 1995 3
Consolidated Statements of Cash Flows for the three months ended
March 31, 1996 and 1995 4
Notes to Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-12
Part II - OTHER INFORMATION 13-19
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CITYSCAPE FINANCIAL CORP.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
March 31, 1996
(Unaudited)
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Assets
Cash and cash equivalents $ 3,660,401
Cash held in escrow 10,743,814
Prepaid commitment fees 37,525,000
Mortgage servicing receivables 43,955,434
Interest-only and residual certificates 25,174,355
Mortgages held for sale, net 61,133,898
Mortgages held for investment, net 1,467,419
Real estate owned, net 141,266
Equipment and leasehold improvements, net 2,794,752
Goodwill 18,764,217
Other assets 6,433,003
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Total assets $ 211,793,559
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Liabilities
Warehouse financing facilities $ 66,187,217
Accounts payable and other liabilities 16,764,210
Income taxes payable 7,585,529
Standby financing facility 7,966,292
Notes and loans payable 47,000,000
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Total liabilities 145,503,248
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Stockholders' Equity
Preferred stock, $.01 par value, 5,000,000 shares authorized;
no shares issued and outstanding --
Common stock, $.01 par value, 50,000,000 shares
authorized; 14,472,128 issued and outstanding 144,721
Additional paid-in capital 45,015,242
Foreign currency translation adjustment (120,111)
Retained earnings 21,250,459
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Total stockholders' equity 66,290,311
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Commitments and contingencies
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Total liabilities and stockholders' equity $ 211,793,559
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See accompanying notes to consolidated financial statements.
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CITYSCAPE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended March 31,
1996 1995
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Revenues
Gain on sale of loans $24,092,738 $ 3,879,410
Mortgage origination income 836,096 619,160
Interest 3,017,683 1,065,832
Servicing income 560,704 24,749
Earnings from partnership 150,000 234,361
Other 121,847 12,540
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Total revenues 28,779,068 5,836,052
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Expenses
Salaries and employee benefits 5,382,345 1,802,204
Interest expense 1,698,045 939,989
Selling expenses 1,362,967 310,430
Other operating expenses 4,044,398 1,034,702
Amortization of goodwill 493,794 --
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Total expenses 12,981,549 4,087,325
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Earnings before income taxes 15,797,519 1,748,727
Provision for income taxes 6,524,375 699,491
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Net earnings $ 9,273,144 $ 1,049,236
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Earnings per share of common stock $ 0.62 0.10
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Weighted average number of shares outstanding
and common stock equivalents 14,902,960 10,289,368
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See accompanying notes to consolidated financial statements.
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CITYSCAPE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
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Three Months Ended March 31,
1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 9,272,338 $ 1,049,236
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,059,098 51,190
Income taxes payable 6,380,726 (80,802)
Earnings from partnership interest (150,000) (234,361)
Increase in mortgage servicing receivables (21,896,327) (2,805,455)
Increase in interest-only and residual certificates (9,602,900) --
Net changes in operating assets and liabilities:
Increase in accrued interest receivable (692,461) (16,577)
(Increase) decrease in mortgages receivable 12,646,280 (1,552,063)
Decrease in other assets 474,899 188,950
Increase (decrease) in accounts payable & other liabilities (4,470,319) 374,893
Other, net 362,133 639,269
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Net cash used in operating activities (6,616,533) (2,385,720)
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Cash flows from investing activities:
Net purchases of equipment (504,485) (101,137)
Net distributions from partnership 145,912 177,889
Increase in mortgages held for investment (443,215) --
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Net cash provided by (used in) investing activities (801,788) 76,752
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Cash flows from financing activities:
Increase (decrease) in warehouse financings (8,714,758) 2,574,456
Increase in standby financing facility 7,194,931 1,638,562
Increase in notes and loans payable 9,000,000 --
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Net cash provided by financing activities 7,480,173 4,213,018
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Net increase in cash and cash equivalents 61,852 1,904,050
Cash and cash equivalents at beginning of period 3,598,549 950,453
============ ============
Cash and cash equivalents at end of period $ 3,660,401 $ 2,854,503
============ ============
Supplemental disclosure of cash flow information:
Income taxes paid during the period $ 92,528 $ 780,293
============ ============
Interest paid during the period $ 512,829 $ 851,357
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
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CITYSCAPE FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(Unaudited)
1. Organization
Cityscape Financial Corp. ("Cityscape" or the "Company") is a consumer
finance company that, through its wholly-owned subsidiary, Cityscape Corp.
("CSC"), engages in the business of originating, purchasing, selling and
servicing mortgage loans secured primarily by one-to four-family residences. The
majority of the Company's loans are made to owners of single family residences
who use the loan proceeds for such purposes as debt consolidation, financing of
home improvements and educational expenditures, among others. In the United
States, the Company is licensed to do business in 35 states and the District of
Columbia. The Company commenced operations in the United Kingdom in May 1995
with the formation of City Mortgage Corporation Limited ("CSC-UK"), an English
corporation that originates, sells and services loans in England, Scotland and
Wales in which the Company initially held a 50% interest and subsequently
purchased the remaining 50% in September 30, 1995 (See Note 3). CSC-UK had no
operations and no predecessor prior to May 1995.
2. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and do not include all
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments consisting of normal recurring accruals, considered necessary for a
fair presentation of the results for the interim period have been included.
Operating results for the three months ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1996. The accompanying consolidated financial statements and the information
included under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" should be read in conjunction with the
consolidated financial statements and related notes of the Company for the year
ended December 31, 1995.
The consolidated financial statements of the Company include the accounts
of CSC and its wholly-owned subsidiaries and beginning in May 1995, CSC-UK. All
significant intercompany balances and transactions have been eliminated in
consolidation. The CSC Acquisition and the UK Acquisition (as such terms are
defined below) have been accounted for under the purchase method of accounting
and, more specifically with respect to the CSC Acquisition only, a "reverse
acquisition" as described in Note 3 below.
Certain amounts in the statements have been reclassified to conform with the
1996 classifications.
3. Acquisitions
On April 27, 1994, Mandi of Essex, Ltd., ("Essex") acquired all of the
capital stock of CSC in an acquisition in which the shareholders of CSC acquired
beneficial ownership of 8,280,000 shares or 92% of Essex's common stock (the
"CSC Acquisition"). In connection with the CSC Acquisition, Essex changed its
name to Cityscape Financial Corp. From the date of its formation through the
date of the CSC Acquisition, Essex's activities were limited to (i) the sale of
initial shares in connection with its organization, (ii) a registered public
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offering of securities and (iii) the pursuit of a combination, by merger or
acquisition. The CSC Acquisition was effective as of January 1, 1994, for
financial reporting purposes.
The CSC Acquisition and the issuance of common stock to the former CSC
shareholders resulted in the former shareholders of CSC obtaining a majority
voting interest in the Company. Generally accepted accounting principles require
that the company whose shareholders retain the majority interest in a combined
business be treated as the acquirer for accounting purposes. As a consequence,
the CSC Acquisition has been accounted for as a "reverse acquisition" for
financial reporting purposes and CSC is deemed to have acquired a 100% interest
in the Company, as of the date of the acquisition.
In January 1994, CSC acquired Astrum Funding Corp. ("Astrum") in exchange for
6.25% of the outstanding shares of the Company. This transaction was accounted
for using the purchase method of accounting. The Astrum acquisition resulted in
the Company acquiring net assets of $1,185 and obtaining licenses to act as a
mortgage banker in 11 states in which it had not previously been licensed. No
additional fair market value was assigned to the net assets received. Although
the Company acquired the new licenses earlier than if it had applied for
licensing on its own, the Company assigned no value to such licenses because
they could have been obtained independently. Further, the Company determined
that due to the illiquidity of the Company's stock as well as the relatively
minimal interest granted to the Astrum shareholders, the Company's stock had no
fair value in excess of the net assets received in the acquisition.
In May 1995, the Company and three principals of a privately held United
Kingdom based mortgage banker formed CSC-UK. CSC-UK operates in the United
Kingdom (excluding Northern Ireland, the "UK"), and lends to individuals who are
unable to obtain mortgage financing from conventional mortgage sources such as
banks and building societies because of impaired or unsubstantiated credit
histories and/or unverifiable income. On September 29, 1995, the Company entered
into an agreement with the three other shareholders of CSC-UK to acquire their
50% interest in CSC-UK not then owned by the Company through the issuance of
1,800,000 shares of the Company's Common Stock valued at $21.6 million (the "UK
Acquisition"). The UK Acquisition was completed as of September 30, 1995. The UK
Acquisition resulted in the recognition of $19.7 million of goodwill. In
addition to the goodwill, the Company acquired assets of $9.0 million consisting
primarily of mortgage servicing receivables and assumed $4.1 million of
liabilities. The UK Acquisition was accounted for as a purchase transaction. No
additional fair market value was assigned to the net assets received in the UK
Acquisition.
4. New Accounting Pronouncement
On January 1, 1996, the Company adopted Statement of Financial Accounting
Standard ("SFAS") No. 123 "Accounting for Stock-Based Compensation". This SFAS
encourages the adoption of a new accounting method for employee stock-based
compensation plans and applies to all arrangements whereby an employee receives
stock or other equity instruments of an employer based on the price of an
employer's stock. These arrangements include restricted stock options and stock
appreciation rights. The SFAS also permits the retention of the Company's
current method of accounting for these plans under Accounting Principles Board
Opinion No. 25. The Company will continue its current method of accounting for
stock based compensation and therefore, pro forma disclosures in footnotes will
be provided on an annual basis. The adoption of this SFAS had no impact on the
Company's results of operations or its financial condition.
5. Earnings per Share
Earnings per share are based on the net earnings applicable to common stock
divided by the weighted average number of common shares and common stock
equivalents outstanding during the period, after giving effect to a 100% stock
dividend declared on September 29, 1995.
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PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
General
The Company is a consumer finance company engaged in the business of
originating, purchasing, selling and servicing mortgage loans secured primarily
by one-to four-family residences. The Company primarily generates income from
gains recognized from premiums on loans sold through whole loan sales to
institutional purchasers, gain on securitization from loans sold through
securitizations, interest earned on loans held for sale, origination fees
received as part of the loan application process and fees earned on loans
serviced. Gain on sale of loans includes (i) gain on securitization which
represents the fair value of the interest-only and residual certificate that the
Company receives upon the sale of loans through securitizations, (ii) premiums
which represent the sales price in excess of loan acquisition and related costs
from whole loan sales and (iii) mortgage servicing, which represents the excess
of the interest rate payable by an obligor on a loan over the interest rate
passed through to the purchaser acquiring an interest in such loan, less
applicable recurring fees. Through September 30, 1995 applicable recurring fees
included the Company's normal servicing fees. Gain on sale of loans constituted
approximately 85.6% of total revenues for the three months ended March 31, 1996
and 66.9% of total revenues for the three months ended March 31, 1995. The
Company completed its first public domestic securitization of $109.7 million in
loans in the first quarter of 1996, and its first UK securitization of
approximately $50.0 million in loans in the first quarter of 1996. The Company
anticipates that it will continue to sell loans through securitizations in
addition to whole loan sales to institutional purchasers.
Results of Operations
Three Months Ended March 31, 1996 Compared to Three Months Ended March
31, 1995
Total revenues increased $23.0 million or 396.6% to $28.8 million for the
three months ended March 31, 1996 from $5.8 million for the comparable period in
1995. This increase was primarily the combined result of higher gains on sale of
loans resulting from the increased loan origination and purchase volume and
volume of loans sold compared to the prior period, the inclusion of the
operating results of CSC-UK, not in existence in the first quarter of 1995, an
increase in net mortgage origination income due to an increased loan origination
volume and an increase in servicing income.
Gain on sale of loans increased $20.2 million or 517.9% to $24.1 million for
the three months ended March 31, 1996 from $3.9 million for the comparable
period in 1995. This increase was a result of (i) the inclusion of CSC-UK's
premium on whole loan sales of $12.2 million representing a 44.5% premium on the
$27.4 million of whole loan sales during the period, (ii) the increased volume
of loans sold through securitizations as well as higher average premiums earned
on securitizations during the three months ended March 31, 1996 ($109.7 million
of loans securitized) at a weighted average gain of 8.8% ($9.7 million) as
compared to $32.8 million of loans sold through securitizations at a weighted
average gain of 8.5% ($2.8 million) during the three months ended March 31, 1995
and (iii) the increased volume of US whole loan sales at lower average premiums
during the three months ended March 31, 1996 ($66.2 million of whole loan sales
at a weighted average premium of 3.3% ($2.2 million) as compared to $23.9
million of whole loan sales at a weighted average premium of 4.6% ($1.1 million)
during the three months ended March 31, 1995).
Net mortgage origination income increased $216,936 or 35.0% to $836,096 for
the three months ended March 31, 1996 from $619,160 for the comparable period in
1995. This increase was primarily a result of the increase in US loan
origination and purchase volume to $166.7 million for the three months ended
March 31, 1996 from $60.8 million for the comparable period in 1995, partially
offset by lower average origination fees earned. It is anticipated that the
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Company's origination fees as a percentage of loans originated will continue to
decrease in the future.
Interest income increased $1.9 million or 172.7% to $3.0 million for the
three months ended March 31, 1996 from $1.1 million for the comparable period in
1995. This increase was due primarily to the increased balance of loans held for
sale during the period resulting from the increased loan origination and
purchase volume in excess of loans sold during the period.
Servicing income increased $535,955 or 2,165.6% to $560,704 for the three
months ended March 31, 1996 from $24,749 for the comparable period in 1995. This
increased income was due primarily to an increase in the average balances of
loans serviced to $461.9 million at March 31, 1996 from $96.5 million at March
31, 1995.
Earnings from partnership interest decreased $84,361 or 36.0% to $150,000 for
the three months ended March 31, 1996 from $234,361 for the comparable period in
1995 as a result of lower earnings recognized from the equity interest in
Industry Mortgage Company, L.P.
Total expenses increased $8.9 million or 217.1% to $13.0 million for the
three months ended March 31, 1996 from $4.1 million for the comparable period in
1995. This increase was a result of increased salaries, selling expenses and
operating expenses related to increased loan origination and purchase volume
during the period, as well as inclusion of the operating results of CSC-UK, as
compared to the three months ended March 31, 1995. Total expenses as a
percentage of total revenues decreased to 45.1% for the three months ended March
31, 1996 from 70.0% for the comparable period in 1995. During the three months
ended March 31, 1996, amortization of goodwill related to the UK Acquisition
totaled $493,794.
Salaries and employee benefits increased $3.6 million or 200.0% to $5.4
million for the three months ended March 31, 1996 from $1.8 million for the
comparable period in 1995. This increase was primarily due to increased staffing
levels to 334 US employees at March 31, 1996 compared to 152 US employees for
the comparable period in 1995 in connection with the Company's growth in loan
origination and purchase volume and geographic expansion, as well as an increase
in loans serviced, and the inclusion of $1.0 million in salaries and employee
benefits associated with the inclusion of the CSC-UK operating results for the
period ended March 31, 1996.
Interest expense increased $758,056 or 80.6% to $1.7 million for the three
months ended March 31, 1996 from $939,989 for the comparable period in 1995. The
increase was attributable to the interest costs associated with a larger balance
of loans held pending sale during the three months ended March 31, 1996
resulting from the increased loan origination and purchase volume during the
period.
Other expenses increased $4.1 million or 315.4% to $5.4 million for the three
months ended March 31, 1996 from $1.3 million for the comparable period in 1995.
This increase was primarily a result of increased selling costs of $1.1 million
or 339.1% to $1.4 million for the three months ended March 31, 1996 from
$310,430 for the comparable period in 1995, and increased professional fees,
travel and entertainment and occupancy costs incurred to support the increased
loan origination and purchase volume and the inclusion of the operating results
of CSC-UK during the period.
Net earnings increased $8.3 million or 830.0% to $9.3 million for the three
months ended March 31, 1996 from $1.0 million for the comparable period in 1995.
The growth in net earnings was due primarily to the inclusion of CSC-UK's
earnings of $5.5 million, after taxes, increased revenues resulting from an
increase in loan origination and purchase volume and volume of loans sold during
the three months ended March 31, 1996 as the Company expanded its geographic
base to 35 states and the District of Columbia and further penetrated existing
markets.
Earnings per share increased to $0.62 on weighted average common shares
outstanding and common stock equivalents of 14,902,960 for the three months
ended March 31, 1996 compared to $0.10 on weighted average common shares and
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common stock equivalents outstanding of 10,289,368 for the comparable period in
1995. Earnings per share increased 520.0% for the period ended March 31, 1996
from the comparable period in 1995. All share and per share amounts reflect the
100% stock dividend declared on September 29, 1995.
Financial Condition
March 31, 1996 Compared to December 31, 1995
Cash and cash equivalents increased $61,852 or 1.7% to $3.7 million at March
31, 1996 from $3.6 million at December 31, 1995.
Prepaid commitment fees were recorded as an asset at March 31, 1996 as the
result of the New Greenwich Facility (as defined in the Liquidity and Capital
Resources section) entered into by CSC-UK and Greenwich International Ltd.
("Greenwich") in March 1996. There was no corresponding asset at December 31,
1995.
Mortgage servicing receivables increased $22.0 million or 100% to $44.0
million at March 31, 1996 from $22.0 million at December 31, 1995 primarily due
to the increase of loans sold with servicing retained, partially offset by
amortization expenses.
Interest-only and residual certificates increased $9.6 million or 61.5% to
$25.2 million at March 31, 1996 from $15.6 million at December 31, 1995 as a
result of the $109.7 million US securitization completed in March 1996.
Mortgage loans held for sale, net decreased $13.1 million or 17.7% to $61.1
million at March 31, 1996 from $74.2 million at December 31, 1995 due primarily
to US loan sale volume exceeding the volume of loans originated in the first
three months of 1996.
Mortgage loans held for investment, net increased $443,215 or 44.3% to $1.5
million at March 31, 1996 from $1.0 million at December 31, 1995. This increase
was a result of the Company's increased loan origination and purchase volume. As
a percentage of total assets, mortgage loans held for investment remained
constant at 0.7% at March 31, 1996 and at December 31, 1995.
Goodwill and other intangibles net of amortization decreased $493,794 or 2.6%
to $18.8 million at March 31, 1996 from $19.3 million at December 31, 1995 as a
result of amortization during the period.
Warehouse financing facilities outstanding decreased $8.7 million or 11.6% to
$66.2 million at March 31, 1996 from $74.9 million at December 31, 1995
primarily as a result of increased loans sold in excess of loan origination and
purchase volume.
Accounts payable and other liabilities increased $8.7 million or 51.2% to
$25.7 million at March 31, 1996 from $17.0 million at December 31, 1995. This
was primarily the result of the inclusion of CSC-UK and increased escrow
balances associated with the increased loan servicing portfolio.
Notes and loans payable totaled $47.0 million at March 31, 1996 representing
the $38.0 million note payable recorded in connection with the New Greenwich
Facility and $9.0 million of short-term borrowings from The First National Bank
of Boston ("Bank of Boston"). The Bank of Boston short-term borrowings were
consolidated into the $30.0 million term loan entered into by the Company in
April 1996 (see Liquidity and Capital Resources section).
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Stockholders' equity increased $9.2 million or 16.1% to $66.3 million at
March 31, 1996 from $57.1 million at December 31, 1995 primarily as a result of
net earnings of $9.3 million for the three months ended March 31, 1996, offset
by a foreign currency translation adjustment of $120,111.
Liquidity and Capital Resources
The Company uses its cash flow from whole loan sales, loans sold through
securitizations, pre-funding mechanisms through its securitizations, loan
origination fees, processing fees, net interest income and borrowings under its
warehouse facility, US purchase facility, standby facility and UK purchase
facility to meet its working capital needs. The Company's cash requirements
include the funding of loan originations and purchases, payment of interest
expenses, funding the over-collateralization requirements for securitizations,
operating expenses, income taxes and capital expenditures.
Adequate credit facilities and other sources of funding, including the
ability of the Company to sell loans, are essential to the continuation of the
Company's ability to originate and purchase loans. As a result of increased loan
originations and purchases and its growing securitization program, the Company
has operated, and expects to continue to operate, on a negative cash flow basis.
During the three month periods ended March 31, 1996 and 1995, the Company used
cash of approximately $6.6 million and $2.4 million, respectively. The Company's
sale of loans through securitizations has resulted in a gain on securitization
recognized by the Company. The recognition of this gain on securitization has a
negative impact on the cash flow of the Company because significant costs are
incurred upon closing of the transactions giving rise to such gain and the
Company is required to pay state and federal income taxes on the gain on
securitization in the period recognized, although the Company does not receive
the cash representing the gain until later periods as the related loans are
repaid or otherwise collected. During the same periods, the Company received
cash of $7.5 million and $4.2 million, respectively. The Company borrows funds
on a short-term basis to support the accumulation of loans prior to sale. These
short-term borrowings are made under a warehouse line of credit with a group of
banks for which CoreStates Bank, N.A. ("CoreStates") serves as agent (the
"Warehouse Facility"). Pursuant to the Warehouse Facility, the Company has
available a secured revolving credit line of $72.0 million to finance the
Company's origination or purchase of loans, pending sale to investors or for
holding certain loans in its own portfolio (the "Revolving Credit Line"). The
Revolving Credit Line is settled on a revolving basis in conjunction with
ongoing loan sales and bears interest at a variable rate (7.91% at March 31,
1996) based on (i) 25 basis points over the higher of either the prime rate or
the federal funds rate plus 50 basis points or (ii) LIBOR (A) divided by the
result of one minus the stated maximum rate at which reserves are required to be
maintained by Federal Reserve System member banks, (B) plus 175 basis points, as
periodically elected by the Company. The outstanding balance of this portion of
the Warehouse Facility was $63.2 million at March 31, 1996. The Revolving Credit
Line extends through June 1997. In addition, the Warehouse Facility provides for
a secured revolving working capital credit line of up to $3.0 million to be used
by the Company for general corporate purposes (the "Working Capital Credit
Line"). The Working Capital Credit Line operates as a revolving facility until
January 1, 1997 at which time any outstanding balance under the Working Capital
Credit Line converts to a term loan. The Working Capital Credit Line bears
interest at a variable rate (9.25% at March 31, 1996) based on 100 basis points
over the higher of either the prime rate or the federal funds rate plus 50 basis
points. The outstanding balance under the Working Capital Credit Line was $3.0
million at March 31, 1996. The Working Capital Credit Line terminates on
December 31, 1998.
The Warehouse Facility also permits the Company to use up to $10.0 million of
the Revolving Credit Line to provide subwarehouse lines of credit to certain
loan correspondents from whom the Company purchases loans. In July 1995, the
Company began lending funds on a short-term basis to assist in the funding of
loans originated by certain of the Company's loan correspondents. Each borrowing
under these subwarehouse credit lines has a term of not more than 30 days. The
Company requires personal guarantees of the credit line from the principals of
the related loan correspondents. At March 31, 1996, the aggregate balance of
loans outstanding under this program was $1.6 million, with applications pending
for an additional $11.7 million of loans.
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The Company has a $50.0 million loan purchase agreement (the "US Purchase
Facility") with ContiTrade Services Corporation ("ContiTrade") whereby the
Company originates and then sells loans and retains the rights to repurchase
loans at a future date for whole loan sales to institutional investors or for
sales through securitizations. This agreement extends through June 1999. The
aggregate principal balance of loans sold to and retained by ContiTrade at March
31, 1996 under the US Purchase Facility was $13.5 million. The Company also has
a standby financing arrangement with ContiTrade (the "Standby Facility") whereby
ContiTrade provides the Company a $10.0 million line of credit which is secured
by the interest-only and residual certificates the Company receives upon loan
sales through securitizations. As of March 31, 1996, the Company had $2.0
million available under the Standby Facility. The Standby Facility bears
interest at a variable rate based on LIBOR plus 200 basis points (7.51% at March
31, 1996) and the agreement extends through June 1999.
In May 1995, CSC-UK and Greenwich entered into a mortgage loan purchase
agreement that included a working capital facility with respect to the funding
of fixed and variable rate, residential mortgage loans originated or purchased
by CSC-UK in the UK (the "Old Greenwich Facility"). Pursuant to the Old
Greenwich Facility, CSC-UK sold all of the loans it originated during 1995 to
Greenwich which was required to buy such loans. After the deduction of certain
fees and expenses of CSC-UK, Greenwich received under the terms of the Old
Greenwich Facility a significant participation in the excess cash flows
associated with such 1995 loans, which participation with respect to such loans
was purchased by CSC-UK prior to 1995 year end. The aggregate principal balance
of loans sold to Greenwich at December 31, 1995 under the Old Greenwich Facility
was $41.4 million. Outstanding amounts under the working capital facility
portion of the Old Greenwich Facility accrued interest at a rate of LIBOR plus
250 basis points (9.11% at December 31, 1995). The outstanding balance under
this working capital facility was (British Pounds Sterling) 1.8 million ($2.8
million) at December 31, 1995.
In March 1996, CSC-UK and Greenwich entered into a new mortgage loan purchase
agreement effective as of January 1, 1996 that includes a working capital
facility with respect to the funding of variable rate, residential mortgage
loans originated or purchased by CSC-UK in the UK (the "New Greenwich Facility")
and terminated the Old Greenwich Facility. Pursuant to the New Greenwich
Facility and with certain exceptions, CSC-UK sells all of the loans it
originates to Greenwich which must buy such loans. CSC-UK and/or Greenwich will
subsequently resell these loans through whole loan sales or securitizations. The
New Greenwich Facility includes a working capital facility pursuant to which
CSC-UK is advanced amounts based on a percentage of the principal balance of
loans originated or purchased by CSC-UK and sold to Greenwich, which advance may
not exceed (British Pounds Sterling) 10.0 million in the aggregate outstanding
at any time. Outstanding amounts under this working capital facility bear
interest at a rate of LIBOR plus 255 basis points (8.82% at March 31, 1996). The
outstanding balance under this working capital facility was (British Pounds
Sterling) 2.8 million ($4.3 million) at March 31, 1996. This agreement expires
on December 31, 2015. Both CSC-UK and Greenwich are prohibited from entering
into substantially similar transactions with other parties. CSC-UK agreed to pay
a fee to Greenwich in connection with the New Greenwich Facility in the
aggregate amount of $38.0 million payable in installments of $13.0 million on
December 15, 1996 and $25.0 million on December 15, 1997. Such fee will be
amortized over the life of the New Greenwich Facility.
During the three months ended March 31, 1996, the Company received $9.0
million in short-term borrowings from the Bank of Boston which were consolidated
into the $30.0 million term loan entered into by the Company in April 1996. The
term loan matures on December 31, 1996 and bears interest at a rate of 12.25%
per annum. In connection with the acquisition of J&J Securities Limited ("J&J")
in April 1996, the Company drew down the entire amount of this facility. The
Company has repaid all amounts outstanding under this loan with proceeds from
its offering of $143.8 million of 6% Convertible Subordinated Debentures due
2006 completed in May 1996.
11
<PAGE>
The Company is required to comply with various operating and financial
covenants as defined in the agreements described above. The continued
availability of funds provided to the Company under these agreements is subject
to the Company's continued compliance with these covenants.
The Company's business requires continual access to short- and long-term
sources of debt and equity capital. While management believes that it has
sufficient funds to finance its operations and will be able to refinance or
otherwise repay its debt in the normal course of business, there can be no
assurance that existing lines can be extended or refinanced or that funds
generated from operations will be sufficient to satisfy such obligations. Future
financing may involve the issuance of additional debt or equity securities.
The Company's cash requirements may be significantly influenced by possible
acquisitions or strategic alliances, although no particular acquisition or
strategic alliance has been agreed upon or become the subject of any letter of
intent or agreement in principle other than the acquisition of J&J completed in
April 1996.
The Company anticipates that it will need to arrange for additional cash
resources prior to the end of 1996 through additional debt or equity financing
or additional bank borrowings. The Company has no commitments for additional
bank borrowings or additional debt or equity financing and there can be no
assurance that the Company will be successful in consummating any such financing
transaction in the future on terms the Company would consider to be favorable.
All references herein to "$" are to United States dollars; all references
to "Pounds" are to British Pounds Sterling. Unless otherwise specified,
translation of amounts from British Pounds Sterling to United States dollars for
the convenience of the reader has been made herein at British Pounds
Sterling1.00 = $1.52.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to various routine legal proceedings arising out of
the ordinary course of its business. Management believes that none of these
actions, individually or in the aggregate, will have a material adverse effect
on the results of operations or financial condition of the Company.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description of Exhibit
------ ----------------------
3.1 Certificate of Incorporation of the Company, as amended, incorporated
by reference to Exhibit 3.1 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
3.2 Bylaws of the Company, as amended, incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
4.1 Purchase and Sale Agreement, dated as of June 24, 1994, between CSC
and ContiTrade incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
4.2* Indenture, dated as of May 7, 1996, between the Company and The Chase
Manhattan Bank, N.A.
4.3* Registration Rights Agreement, dated as of April 26, 1996, among
the Company, NatWest Securities Limited, Bear, Stearns & Co.
Inc., CIBC Wood Gundy Securities Corp. and Wasserstein Perella
Securities, Inc.
10.1 Lease Agreement, dated as of September 30, 1993, between CSC and
Taxter Park Associates, as amended by the First Amendment to Lease,
dated as of April 19, 1994, and the Second Amendment to Lease, dated
as of May 12, 1995, incorporated by reference to Exhibit 10.1 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.2 Sublease Agreement between KLM Royal Dutch Airlines and CSC, dated as
of December 5, 1994, incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.3 Employment Agreement, dated as of January 1, 1995, between CSC and
Robert Grosser, incorporated by reference to Exhibit 10.3 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.4 Employment Agreement, dated as of January 1, 1995, between CSC and
Robert C. Patent, incorporated by reference to Exhibit 10.4 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.5 Employment Agreement, dated as of November 1, 1992, between CSC and
Robert M. Stata, as amended by the Amendment Agreement, dated as of
January 1, 1994, incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.6 Employment Agreement, dated as of July 1, 1995, between CSC and Cheryl
P. Carl, incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
13
<PAGE>
10.7 Employment Agreement, dated as of July 1, 1995, between CSC and Eric
S. Goldstein, incorporated by reference to Exhibit 10.7 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.8 Employment Agreement, dated as of July 1, 1995, between CSC and Steven
Weiss, incorporated by reference to Exhibit 10.8 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.9 Letter agreement, dated as of August 18, 1994, between CSC and Tim S.
Ledwick, incorporated by reference to Exhibit 10.9 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.10 Employment Agreement, dated as of July 1, 1995, between CSC and Jonah
L. Goldstein, incorporated by reference to Exhibit 10.10 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.11 Agreement of Limited Partnership of Industry Mortgage Company, L.P.,
dated as of July 1, 1993, between Industry Mortgage Corporation and
the Limited Partners of Industry Mortgage Company, L.P., including
CSC, as amended by the First Amended and Restated Agreement of Limited
Partnership of Industry Mortgage Company, L.P., dated as of January 1,
1994, by the First Amendment to First Amended and Restated Agreement
of Limited Partnership of Industry Mortgage Company, L.P., dated as of
March, 1994, and the Second Amendment to First Amended and Restated
Agreement of Limited Partnership of Industry Mortgage Company, L.P.,
dated as of July 1994, incorporated by reference to Exhibit 10.11 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.12 Master Agreement for Sale and Purchase of Mortgages, dated as of July
1, 1993, between CSC and Industry Mortgage Company L.P., incorporated
by reference to Exhibit 10.12 to the Company's Registration Statement
on Form S-1 as declared effective by the Commission on December 20,
1995.
10.13 Master Agreement for Sale and Purchase of Mortgage Loans, dated as of
March 11, 1994, between CSC and The First National Bank of Boston,
incorporated by reference to Exhibit 10.13 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.14 ContiMortgage Wholesale Second Mortgage Program Master Agreement for
Sale and Purchase of Mortgages, dated as of August 23, 1991, between
CSC and ContiMortgage Corporation, as amended by the First Amendment
to Master Agreement for Purchase and Sale, dated as of November 22,
1993, by the Second Amendment to Master Agreement for Purchase and
Sale, dated as of January 28, 1994 and by the Third Amendment, dated
as of November 9, 1994, incorporated by reference to Exhibit 10.14 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.15 Standby Financing and Investment Banking Services Agreement, dated as
of June 24, 1994, between CSC and ContiTrade, incorporated by
reference to Exhibit 10.15 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
14
<PAGE>
10.16 Ongoing Agreement of Purchase and Sale of Mortgage Loans, dated as of
November 12, 1993, between CSC and NationsCredit Financial Services
Corporation of America, incorporated by reference to Exhibit 10.16 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.17 Letter agreement, dated as of December 15, 1994, from NationsCredit
Corporation and CSC, incorporated by reference to Exhibit 10.17 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.18 Promissory Note, dated as of December 9, 1993, between CSC and Center
Capital Corporation, incorporated by reference to Exhibit 10.18 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.19 Revolving Credit, Security, and Term Loan Agreement, dated as of June
30, 1995 among CSC, the Company, CoreStates Bank, N.A., Harris Trust
and Savings Bank, NBD Bank and NatWest Bank N.A., as amended by
Amendment No. 1 to the Revolving Credit Agreement, dated as of August
30, 1995, incorporated by reference to Exhibit 10.19 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.20 The Company's 1995 Stock Option Plan, incorporated by reference to
Exhibit 10.20 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.21 The Company's 1995 Non-Employee Directors Stock Option Plan,
incorporated by reference to Exhibit 10.21 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.22 Pooling and Servicing Agreement, dated as of March 10, 1995, among
CSC, ContiTrade and Chemical Bank, incorporated by reference to
Exhibit 10.22 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.23 Indemnification Agreement, dated as of March 30, 1995, among CSC,
ContiTrade and Municipal Bond Investors Assurance Corporation,
incorporated by reference to Exhibit 10.23 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.24 Insurance Agreement, dated as of March 10, 1995, among CSC, Chemical
Bank and Municipal Bond Investors Assurance Corporation, incorporated
by reference to Exhibit 10.24 to the Company's Registration Statement
on Form S-1 as declared effective by the Commission on December 20,
1995.
10.25 Purchase Price Letter, dated as of March 30, 1995, between CSC and
ContiTrade, incorporated by reference to Exhibit 10.25 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.26 Pooling and Servicing Agreement, dated as of July 31, 1995, between
CSC and Harris Trust and Savings Bank, incorporated by reference to
Exhibit 10.26 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
15
<PAGE>
10.27 Indemnification Agreement, dated as of August 24, 1995, between CSC,
ContiFinancial Services Corporation and Financial Security Assurance
Inc., incorporated by reference to Exhibit 10.27 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.28 Insurance and Indemnity Agreement, dated as of July 31, 1995, between
CSC and Financial Security Assurance Inc., incorporated by reference
to Exhibit 10.28 to the Company's Registration Statement on Form S-1,
as amended as declared effective by the Commission on December 20,
1995.
10.29+ Mortgage Loan Purchase Agreement, dated as of May 26, 1995, between
CSC-UK and Greenwich, incorporated by reference to Exhibit 10.29 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.30+ Letter, dated as of May 26, 1995, from Greenwich to CSC-UK regarding
purchase commitment with respect to first and second mortgage loans
located in the United Kingdom, incorporated by reference to Exhibit
10.30 to the Company's Registration Statement on Form S-1 as declared
effective by the Commission on December 20, 1995.
10.31+ Servicing Agreement, dated as of May 26, 1995, among CSC-UK, City
Mortgage Servicing Limited and Greenwich, incorporated by reference to
Exhibit 10.31 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on
December 20, 1995.
10.32 Stock Purchase Agreement, dated as of September 29, 1995, among the
Company, David Steene, Martin Brand and Gerald Epstein, incorporated
by reference to Exhibit 10.32 to the Company's Registration Statement
on Form S-1 as declared effective by the Commission on December 20,
1995.
10.33 Service Agreement, dated as of April 5, 1995, between CSC-UK and David
Steene, incorporated by reference to Exhibit 10.33 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.34 Service Agreement, dated as of April 5, 1995, between CSC-UK and
Martin Brand, incorporated by reference to Exhibit 10.34 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.35 Service Agreement, dated as of April 5, 1995, between CSC-UK and
Gerald Epstein, incorporated by reference to Exhibit 10.35 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.36 Agreement, dated as of May 1, 1995, between CSC-UK and J.L.B.
Equities, Inc., incorporated by reference to Exhibit 10.36 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.37 Lease, dated as of August 2, 1995, among The Standard Life Assurance
Company, City Mortgage Servicing Limited and CSC-UK, incorporated by
reference to Exhibit 10.37 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
10.38 Agreement and Plan of Reorganization, dated as of April 12, 1994,
among Essex, CSC and Shareholders of CSC, incorporated by reference to
Exhibit 10.38 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
16
<PAGE>
10.39 Stock Purchase Agreement, dated November 15, 1993, between CSC and
Spectrum Financial Consultants, Inc., incorporated by reference to
Exhibit 10.39 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.40 Pooling and Servicing Agreement, dated as of November 27, 1995, among
CSC, ContiTrade Services L.L.C. and Harris Trust and Savings Bank,
incorporated by reference to Exhibit 10.40 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.41 Insurance and Indemnity Agreement, dated as of November 27, 1995,
between CSC and Financial Security Assurance Inc., incorporated by
reference to Exhibit 10.41 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
10.42 Indemnification Agreement, dated as of December 6, 1995, among CSC,
Financial Security Assurance Inc. and ContiFinancial Services
Corporation, incorporated by reference to Exhibit 10.42 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.43 Purchase Price Letter, dated as of December 6, 1995, between CSC and
ContiTrade Services L.L.C., incorporated by reference to Exhibit 10.43
to the Company's Registration Statement on Form S-1 as declared
effective by the Commission on December 20, 1995.
10.44 Stock Option Agreement, dated as of March 6, 1996, by and among the
Company, CSC-UK and Messrs. Jaye and Johnson, incorporated by
reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
filed with the Commission on March 14, 1996.
10.45 Asset Purchase Agreement, dated March 6, 1995, by and among CSC-UK,
J&J, UK Credit Corporation Limited ("UK Credit") and certain
shareholders of UK Credit, incorporated by reference to Exhibit 2.2 to
the Company's Current Report on Form 8-K filed with the Commission on
March 14, 1996.
10.46++ Letter Agreement, dated as of March 28, 1996, from Greenwich
International, Ltd. to CSC-UK regarding purchase commitment with
respect to first and second mortgage loans located in the United
Kingdom, incorporated by reference to Exhibit 10.46 to the Company's
Annual Report on Form 10-K filed with the Commission on April 1,
1996.
10.47 Letter Agreement, dated March 28, 1996, between Greenwich and CSC-UK
regarding termination of prior agreement, incorporated by reference to
Exhibit 10.46 to the Company's Annual Report on Form 10-K filed with
the Commission on April 1, 1996.
10.48* Subscription Agreement, dated April 26, 1996, among the Company,
NatWest Securities Limited, Bear, Stearns & Co. Inc., CIBC Wood
Gundy Securities Corp. and Wasserstein Perella Securities, Inc.
27.1* Financial Data Schedule
- ---------------
* Filed herewith
+ Confidential treatment granted
++ Confidential treatment requested
17
<PAGE>
(b) Reports on Form 8-K:
1. Form 8-K dated March 13, 1996 reporting that the Company entered
into agreements relating to the acquisition of J&J and the
acquisition of certain assets of UK Credit Corporation Limited.
2. Form 8-K dated April 18, 1996 revising the Company's results for the
year ended December 31, 1995.
3. Form 8-K dated May 2, 1996 reporting the Company's first quarter
1996 results.
4. Form 8-K dated May 2, 1996 reporting the Company's acquisition of
J&J.
5. Form 8-K dated May 2, 1996 reporting the Company's offering of its
6% Convertible Subordinated Debentures due 2006.
18
<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.
Cityscape Financial Corp.
Date: May 14, 1996 By /s/Tim S. Ledwick
------------ -------------------
Tim S. Ledwick
Title: Chief Financial Officer
(as chief accounting officer and
on behalf of the registrant)
19
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Consecutive
Number Description of Exhibit Page No.
------ ---------------------- --------
<S> <C> <C>
3.1 Certificate of Incorporation of the Company, as amended, incorporated
by reference to Exhibit 3.1 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
3.2 Bylaws of the Company, as amended, incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
4.1 Purchase and Sale Agreement, dated as of June 24, 1994, between CSC
and ContiTrade incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
4.2* Indenture, dated as of May 7, 1996, between the Company and The Chase
Manhattan Bank, N.A.
4.3* Registration Rights Agreement, dated as of April 26, 1996, among the
Company, NatWest Securities Limited, Bear, Stearns & Co. Inc., CIBC
Wood Gundy Securities Corp. and Wasserstein Perella Securities, Inc.
10.1 Lease Agreement, dated as of September 30, 1993, between CSC and
Taxter Park Associates, as amended by the First Amendment to Lease,
dated as of April 19, 1994, and the Second Amendment to Lease, dated
as of May 12, 1995, incorporated by reference to Exhibit 10.1 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.2 Sublease Agreement between KLM Royal Dutch Airlines and CSC, dated as
of December 5, 1994, incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.3 Employment Agreement, dated as of January 1, 1995, between CSC and
Robert Grosser, incorporated by reference to Exhibit 10.3 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.4 Employment Agreement, dated as of January 1, 1995, between CSC and
Robert C. Patent, incorporated by reference to Exhibit 10.4 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
</TABLE>
20
<PAGE>
<TABLE>
<S> <C> <C>
10.5 Employment Agreement, dated as of November 1, 1992, between CSC and
Robert M. Stata, as amended by the Amendment Agreement, dated as of
January 1, 1994, incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.6 Employment Agreement, dated as of July 1, 1995, between CSC and Cheryl
P. Carl, incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.7 Employment Agreement, dated as of July 1, 1995, between CSC and Eric
S. Goldstein, incorporated by reference to Exhibit 10.7 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.8 Employment Agreement, dated as of July 1, 1995, between CSC and Steven
Weiss, incorporated by reference to Exhibit 10.8 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.9 Letter agreement, dated as of August 18, 1994, between CSC and Tim S.
Ledwick, incorporated by reference to Exhibit 10.9 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.10 Employment Agreement, dated as of July 1, 1995, between CSC and Jonah
L. Goldstein, incorporated by reference to Exhibit 10.10 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.11 Agreement of Limited Partnership of Industry Mortgage Company, L.P.,
dated as of July 1, 1993, between Industry Mortgage Corporation and
the Limited Partners of Industry Mortgage Company, L.P., including
CSC, as amended by the First Amended and Restated Agreement of Limited
Partnership of Industry Mortgage Company, L.P., dated as of January 1,
1994, by the First Amendment to First Amended and Restated Agreement
of Limited Partnership of Industry Mortgage Company, L.P., dated as of
March, 1994, and the Second Amendment to First Amended and Restated
Agreement of Limited Partnership of Industry Mortgage Company, L.P.,
dated as of July 1994, incorporated by reference to Exhibit 10.11 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.12 Master Agreement for Sale and Purchase of Mortgages, dated as of July
1, 1993, between CSC and Industry Mortgage Company L.P., incorporated
by reference to Exhibit 10.12 to the Company's Registration Statement
on Form S-1 as declared effective by the Commission on December 20,
1995.
</TABLE>
21
<PAGE>
<TABLE>
<S> <C> <C>
10.13 Master Agreement for Sale and Purchase of Mortgage Loans, dated as of
March 11, 1994, between CSC and The First National Bank of Boston,
incorporated by reference to Exhibit 10.13 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.14 ContiMortgage Wholesale Second Mortgage Program Master Agreement for
Sale and Purchase of Mortgages, dated as of August 23, 1991, between
CSC and ContiMortgage Corporation, as amended by the First Amendment
to Master Agreement for Purchase and Sale, dated as of November 22,
1993, by the Second Amendment to Master Agreement for Purchase and
Sale, dated as of January 28, 1994 and by the Third Amendment, dated
as of November 9, 1994, incorporated by reference to Exhibit 10.14 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.15 Standby Financing and Investment Banking Services Agreement, dated as
of June 24, 1994, between CSC and ContiTrade, incorporated by
reference to Exhibit 10.15 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
10.16 Ongoing Agreement of Purchase and Sale of Mortgage Loans, dated as of
November 12, 1993, between CSC and NationsCredit Financial Services
Corporation of America, incorporated by reference to Exhibit 10.16 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
10.17 Letter agreement, dated as of December 15, 1994, from NationsCredit
Corporation and CSC, incorporated by reference to Exhibit 10.17 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December
20, 1995.
10.18 Promissory Note, dated as of December 9, 1993, between CSC and Center
Capital Corporation, incorporated by reference to Exhibit 10.18 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December
20, 1995.
10.19 Revolving Credit, Security, and Term Loan Agreement, dated as of June
30, 1995 among CSC, the Company, CoreStates Bank, N.A., Harris Trust
and Savings Bank, NBD Bank and NatWest Bank N.A., as amended by
Amendment No. 1 to the Revolving Credit Agreement, dated as of August
30, 1995, incorporated by reference to Exhibit 10.19 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.20 The Company's 1995 Stock Option Plan, incorporated by reference to
Exhibit 10.20 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
</TABLE>
22
<PAGE>
<TABLE>
<S> <C> <C>
10.21 The Company's 1995 Non-Employee Directors Stock Option Plan,
incorporated by reference to Exhibit 10.21 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.22 Pooling and Servicing Agreement, dated as of March 10, 1995, among
CSC, ContiTrade and Chemical Bank, incorporated by reference to
Exhibit 10.22 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.23 Indemnification Agreement, dated as of March 30, 1995, among CSC,
ContiTrade and Municipal Bond Investors Assurance Corporation,
incorporated by reference to Exhibit 10.23 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.24 Insurance Agreement, dated as of March 10, 1995, among CSC, Chemical
Bank and Municipal Bond Investors Assurance Corporation, incorporated
by reference to Exhibit 10.24 to the Company's Registration Statement
on Form S-1 as declared effective by the Commission on December 20,
1995.
10.25 Purchase Price Letter, dated as of March 30, 1995, between CSC and
ContiTrade, incorporated by reference to Exhibit 10.25 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.26 Pooling and Servicing Agreement, dated as of July 31, 1995, between
CSC and Harris Trust and Savings Bank, incorporated by reference to
Exhibit 10.26 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.27 Indemnification Agreement, dated as of August 24, 1995, between CSC,
ContiFinancial Services Corporation and Financial Security Assurance
Inc., incorporated by reference to Exhibit 10.27 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.28 Insurance and Indemnity Agreement, dated as of July 31, 1995, between
CSC and Financial Security Assurance Inc., incorporated by reference
to Exhibit 10.28 to the Company's Registration Statement on Form S-1,
as amended as declared effective by the Commission on December 20,
1995.
10.29+ Mortgage Loan Purchase Agreement, dated as of May 26, 1995, between
CSC-UK and Greenwich, incorporated by reference to Exhibit 10.29 to
the Company's Registration Statement on Form S-1 as declared effective
by the Commission on December 20, 1995.
</TABLE>
23
<PAGE>
<TABLE>
<S> <C> <C>
10.30+ Letter, dated as of May 26, 1995, from Greenwich to CSC-UK regarding
purchase commitment with respect to first and second mortgage loans
located in the United Kingdom, incorporated by reference to Exhibit
10.30 to the Company's Registration Statement on Form S-1 as declared
effective by the Commission on December 20, 1995.
10.31+ Servicing Agreement, dated as of May 26, 1995, among CSC-UK, City
Mortgage Servicing Limited and Greenwich, incorporated by reference to
Exhibit 10.31 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.32 Stock Purchase Agreement, dated as of September 29, 1995, among the
Company, David Steene, Martin Brand and Gerald Epstein, incorporated
by reference to Exhibit 10.32 to the Company's Registration Statement
on Form S-1 as declared effective by the Commission on December 20,
1995.
10.33 Service Agreement, dated as of April 5, 1995, between CSC-UK and David
Steene, incorporated by reference to Exhibit 10.33 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.34 Service Agreement, dated as of April 5, 1995, between CSC-UK and
Martin Brand, incorporated by reference to Exhibit 10.34 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.35 Service Agreement, dated as of April 5, 1995, between CSC-UK and
Gerald Epstein, incorporated by reference to Exhibit 10.35 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.36 Agreement, dated as of May 1, 1995, between CSC-UK and J.L.B.
Equities, Inc., incorporated by reference to Exhibit 10.36 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.37 Lease, dated as of August 2, 1995, among The Standard Life Assurance
Company, City Mortgage Servicing Limited and CSC-UK, incorporated by
reference to Exhibit 10.37 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
10.38 Agreement and Plan of Reorganization, dated as of April 12, 1994,
among Essex, CSC and Shareholders of CSC, incorporated by reference to
Exhibit 10.38 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
10.39 Stock Purchase Agreement, dated November 15, 1993, between CSC and
Spectrum Financial Consultants, Inc., incorporated by reference to
Exhibit 10.39 to the Company's Registration Statement on Form S-1 as
declared effective by the Commission on December 20, 1995.
</TABLE>
24
<PAGE>
<TABLE>
<S> <C> <C>
10.40 Pooling and Servicing Agreement, dated as of November 27, 1995, among
CSC, ContiTrade Services L.L.C. and Harris Trust and Savings Bank,
incorporated by reference to Exhibit 10.40 to the Company's
Registration Statement on Form S-1 as declared effective by the
Commission on December 20, 1995.
10.41 Insurance and Indemnity Agreement, dated as of November 27, 1995,
between CSC and Financial Security Assurance Inc., incorporated by
reference to Exhibit 10.41 to the Company's Registration Statement on
Form S-1 as declared effective by the Commission on December 20, 1995.
10.42 Indemnification Agreement, dated as of December 6, 1995, among CSC,
Financial Security Assurance Inc. and ContiFinancial Services
Corporation, incorporated by reference to Exhibit 10.42 to the
Company's Registration Statement on Form S-1 as declared effective by
the Commission on December 20, 1995.
10.43 Purchase Price Letter, dated as of December 6, 1995, between CSC and
ContiTrade Services L.L.C., incorporated by reference to Exhibit 10.43
to the Company's Registration Statement on Form S-1 as declared
effective by the Commission on December 20, 1995.
10.44 Stock Option Agreement, dated as of March 6, 1996, by and among the
Company, CSC-UK and Messrs. Jaye and Johnson, incorporated by
reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
filed with the Commission on March 14, 1996.
10.45 Asset Purchase Agreement, dated March 6, 1995, by and among CSC-UK,
J&J, UK Credit Corporation Limited ("UK Credit") and certain
shareholders of UK Credit, incorporated by reference to Exhibit 2.2 to
the Company's Current Report on Form 8-K filed with the Commission on
March 14, 1996.
10.46++ Letter Agreement, dated as of March 28, 1996, from Greenwich
International, Ltd. to CSC-UK regarding purchase commitment with
respect to first and second mortgage loans located in the United
Kingdom, incorporated by reference to Exhibit 10.46 to the Company's
Annual Report on Form 10-K filed with the Commission on April 1,
1996.
10.47 Letter Agreement, dated March 28, 1996, between Greenwich and CSC-UK
regarding termination of prior agreement, incorporated by reference to
Exhibit 10.46 to the Company's Annual Report on Form 10-K filed with
the Commission on April 1, 1996.
10.48* Subscription Agreement, dated April 26, 1996, among the Company,
NatWest Securities Limited, Bear, Stearns & Co. Inc., CIBC Wood Gundy
Securities Corp. and Wasserstein Perella Securities, Inc.
27.1* Financial Data Schedule
</TABLE>
25
<PAGE>
- -------------
* Filed herewith
+ Confidential treatment granted
++ Confidential treatment requested
26
EXHIBIT 4.2
Execution Copy
--------------------
CITYSCAPE FINANCIAL CORP.
Issuer,
and
THE CHASE MANHATTAN BANK, N.A.,
Trustee
--------------------
INDENTURE
--------------------
Up To
U.S.$143,750,000
6% Convertible Subordinated Debentures due 2006
--------------------
Dated as of May 7, 1996
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions..............................................1
SECTION 1.2. Incorporation by Reference of TIA........................9
SECTION 1.3. Rules of Construction...................................10
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating.........................................11
SECTION 2.2. Execution and Authentication............................13
SECTION 2.3. Registrar and Paying Agent..............................14
SECTION 2.4. Paying Agent to Hold Assets in Trust....................15
SECTION 2.5. Securityholder Lists....................................15
SECTION 2.6. Transfer and Exchange; Restrictions on Transfer.........15
SECTION 2.7. Exchange................................................22
SECTION 2.8. Replacement Securities..................................24
SECTION 2.9. Outstanding Securities..................................25
SECTION 2.10. Treasury Securities.....................................25
SECTION 2.11. Temporary Securities....................................25
SECTION 2.12. Cancellation............................................26
SECTION 2.13. Payment.................................................26
SECTION 2.14. Defaulted Interest......................................28
SECTION 2.15. Computation of Interest.................................28
ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption.....................................29
SECTION 3.2. Effect of Notice of Redemption..........................31
SECTION 3.3. Deposit of Redemption Price.............................31
SECTION 3.4. Securities Redeemed in Part.............................32
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities...................................32
SECTION 4.2. Maintenance of Office or Agency.........................32
SECTION 4.3. Corporate Existence.....................................34
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SECTION 4.4. Payment of Taxes and Other Claims.......................34
SECTION 4.5. Maintenance of Properties and Insurance.................34
SECTION 4.6. Compliance Certificate; Notice of Default...............35
SECTION 4.7. Reports.................................................35
SECTION 4.8. Waiver of Stay, Extension or Usury Laws.................36
SECTION 4.9. Rule 144A Information Requirement.......................36
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.............37
SECTION 5.2. Successor Corporation Substituted.......................37
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.......................................38
SECTION 6.2. Acceleration of Maturity Date; Rescission and
Annulment.............................................39
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement
by Trustee............................................40
SECTION 6.4. Trustee May File Proofs of Claim........................41
SECTION 6.5. Trustee May Enforce Claims Without Possession of
Securities............................................42
SECTION 6.6. Priorities..............................................42
SECTION 6.7. Limitation on Suits.....................................42
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
Premium, Interest and Additional Amounts..............43
SECTION 6.9. Rights and Remedies Cumulative..........................43
SECTION 6.10. Delay or Omission Not Waiver............................43
SECTION 6.11. Control by Holders......................................44
SECTION 6.12. Waiver of Past Default..................................44
SECTION 6.13. Undertaking for Costs...................................44
SECTION 6.14. Restoration of Rights and Remedies......................45
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee.......................................46
SECTION 7.2. Rights of Trustee.......................................47
SECTION 7.3. Individual Rights of Trustee............................48
SECTION 7.4. Trustee's Disclaimer....................................48
SECTION 7.5. Notice of Default.......................................48
SECTION 7.6. Reports by Trustee to Holders...........................48
SECTION 7.7. Compensation and Indemnity..............................49
SECTION 7.8. Replacement of Trustee..................................50
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<PAGE>
SECTION 7.9. Successor Trustee by Merger, Etc........................51
SECTION 7.10. Eligibility; Disqualification...........................51
SECTION 7.11. Preferential Collection of Claims Against Company.......51
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1. Satisfaction and Discharge of Indenture.................52
SECTION 8.2. Repayment to the Company................................52
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders......53
SECTION 9.2. Amendments, Supplemental Indentures and Waivers
with Consent of Holders...............................53
SECTION 9.3. Compliance with TIA.....................................54
SECTION 9.4. Revocation and Effect of Consents.......................54
SECTION 9.5. Notation on or Exchange of Securities...................55
SECTION 9.6. Trustee to Sign Amendments, Etc.........................55
ARTICLE X
MEETINGS
SECTION 10.1. Meetings and Votes of Holders...........................56
SECTION 10.2. Action by Holders.......................................59
ARTICLE XI
AGENTS
SECTION 11.1. Offices, Resignation, Successors, Etc. of Agents; Paying,
Conversion and Transfer Agencies......................60
ARTICLE XII
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Indebtedness..........62
SECTION 12.2. No Payment on Securities in Certain Circumstances.......62
SECTION 12.3. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or
Reorganization........................................64
SECTION 12.4. Securityholders to Be Subrogated to Rights of
Holders of Senior Indebtedness........................65
SECTION 12.5. Obligations of the Company Unconditional................65
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<PAGE>
SECTION 12.6. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice....................................66
SECTION 12.7. Application by Trustee of Assets Deposited with It.....66
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness.....67
SECTION 12.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities..........................67
SECTION 12.10. Right of Trustee to Hold Senior Indebtedness...........67
SECTION 12.11. Article XII Not to Prevent Events of Default...........68
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness.........................................68
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.1. Conversion Privilege...................................69
SECTION 13.2. Exercise of Conversion Privilege.......................69
SECTION 13.3. Fractional Interests...................................70
SECTION 13.4. Adjustment of Conversion Price.........................71
SECTION 13.5. Notice of Certain Events...............................71
SECTION 13.6. Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation
or Sale of Assets....................................72
SECTION 13.7. Taxes on Conversion....................................73
SECTION 13.8. Company to Provide Common Stock........................73
SECTION 13.9. Disclaimer of Responsibility for Certain Matters.......74
SECTION 13.10. Return of Funds Deposited for Redemption of
Converted Securities.................................74
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. TIA Controls...........................................75
SECTION 14.2. Notices................................................75
SECTION 14.3. Communications by Holders with Other Holders...........76
SECTION 14.4. Certificate and Opinion as to Conditions Precedent.....76
SECTION 14.5. Statements Required in Certificate or Opinion..........76
SECTION 14.6. Rules by Trustee, Paying Agent, Registrar..............77
SECTION 14.7. Legal Holidays.........................................77
SECTION 14.8. Taxes..................................................77
SECTION 14.9. Governing Law..........................................78
SECTION 14.10. Agent for Service of Process...........................78
SECTION 14.11. No Adverse Interpretation of Other Agreements..........78
SECTION 14.12. No Recourse Against Others.............................78
SECTION 14.13. Successors.............................................79
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<PAGE>
SECTION 14.14. Duplicate Originals....................................79
SECTION 14.15. Severability...........................................79
SECTION 14.16. Table of Contents, Headings, Etc.......................79
SECTION 14.17. Qualification of Indenture.............................79
SECTION 14.18. Registration Rights....................................79
EXHIBITS
Exhibit A - Form of Security.........................................A-1
Exhibit B - Form of Regulation S Global Security.....................B-1
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<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
310(a)(1) .................................................. 7.10
(a)(2) .................................................. 7.10
(a)(3) .................................................. N.A.
(a)(4) .................................................. N.A.
(a)(5) .................................................. 7.10
(b) .................................................. 7.10
(c) .................................................. N.A.
311(a) .................................................. 7.11
(b) .................................................. 7.11
(c) .................................................. N.A.
312(a) .................................................. 2.5
(b) .................................................. 14.3
(c) .................................................. 14.3
313(a) .................................................. 7.6
(b)(1) .................................................. N.A.
(b)(2) .................................................. 7.6
(c) .................................................. 7.6
(d) .................................................. 7.6
314(a) .................................................. 4.6
(b) .................................................. N.A.
(c)(1) .................................................. 14.4
(c)(2) .................................................. 14.4
(c)(3) .................................................. N.A.
(d) .................................................. N.A.
(e) .................................................. 14.5
(f) .................................................. N.A.
315(a) .................................................. N.A.
(b) .................................................. 6.2
(c) .................................................. 7.1, 7.5
(d) .................................................. 7.1
(e) .................................................. 6.13
316 (a) (last sentence)....................................... N.A.
(a) (1) (A) .................................................. N.A.
(a) (1) (B) .................................................. 6.12
(a) (2) .................................................. N.A.
(b) .................................................. 6.8
(c) .................................................. N.A.
317(a) (1) .................................................. 6.2
(a) (2) .................................................. 6.4
(b) .................................................. 6.3
318(a) .................................................. 14.1
N.A. means not applicable.
- ---------------------
* This Cross-Reference Table is not part of the Indenture.
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<PAGE>
INDENTURE, dated as of May 7, 1996, between CITYSCAPE FINANCIAL CORP., a
Delaware corporation (the "Company"), and THE CHASE MANHATTAN BANK, N.A., as
Trustee.
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Company's 6%
Convertible Subordinated Debentures due 2006 and the Coupons:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.2.
"Accredited Investor Securities" shall have the meaning specified in
Section 2.1(b).
"Additional Amounts" shall have the meaning specified in Section 2 of the
form of Registered Security and Bearer Security attached hereto as Exhibit A.
"Affiliate" means (i) any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, (ii)
any spouse, immediate family member, or other relative who has the same
principal residence of any person described in clause (i) above, and (iii) any
trust in which any person described in clause (i) or (ii) above has a beneficial
interest. For purposes of this definition, the term "control" means the power to
direct the management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise.
"Agent" shall have the meaning set forth in Section 2.3.
"Authorized Newspaper" means a leading newspaper, in an official language
of the country of publication or in the English language, customarily published
on each Business Day whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. If by reason of the temporary
or permanent suspension of publication of any newspaper or by reason of any
other cause it shall be impossible to make publication of such notice in an
Authorized Newspaper as herein provided, then such publication or other notice
in lieu thereof as shall be made by the Trustee at the written direction of the
Company shall constitute sufficient publication of such notice, if such
publication or other notice shall, so far as may be possible, approximate the
terms and conditions of the publication in lieu of which it is given.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal, state
or foreign law for the relief of debtors.
<PAGE>
"Bearer Securities" shall have the meaning set forth in Section 2.1(c).
"Board of Directors" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such person.
"Board Resolution" means, with respect to any person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such person
to have been duly adopted by the Board of Directors or any authorized committee
thereof and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means, with respect to any act to be performed hereunder or
under the Securities, each Monday, Tuesday, Wednesday, Thursday or Friday that
is not a day on which banking institutions in the place where such act is to
occur are authorized or obligated by applicable law, regulation or executive
order to close.
"Capitalized Lease Obligation" means rental obligations under a lease that
are required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligations shall
be the capitalized amount of such obligations, as determined in accordance with
GAAP.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Cash" means such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts.
"Cedel" means Cedel Bank, societe anonyme.
"Change of Control" means (i) any merger or consolidation of the Company
with or into any person or any sale, transfer or other conveyance, whether
direct or indirect, of all or substantially all of the assets of the Company, on
a consolidated basis, in one transaction or a series of related transactions,
if, immediately after giving effect to such transaction, any "person" or "group"
(as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) is or becomes the "beneficial owner," directly
or indirectly, of more than 50% of the total voting power in the aggregate
normally entitled to vote in the election of directors, managers, or trustees,
as applicable, of the transferee or surviving entity other than any such person
or group that held such voting power as of the date hereof, (ii) when any
"person" or "group" (as such terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act, whether or not applicable) is or becomes the
"beneficial owner," directly or indirectly, of more than 50% of the total voting
power in the aggregate normally entitled to vote in the election of directors of
the Company, or (iii) when during any period of 12 consecutive months after the
Closing Date, individuals who at the beginning
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<PAGE>
of any such 12-month period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board or whose
nomination for election by the stockholders of the Company was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved), cease for any reason to constitute a
majority of the Board of Directors of the Company then in office. For purposes
of this definition, (i) the terms "person" and "group" shall have the meanings
used for purposes of Rules 13d-3 and 13d-5 of the Exchange Act as in effect on
the Closing Date, whether or not applicable; and (ii) the term "beneficial
owner" shall have the meaning used in Rules 13d-3 and 13d-5 under the Exchange
Act as in effect on the Closing Date, where or not applicable, except that a
"person" shall not be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time or upon the occurrence of certain
events.
"Change of Control Notice Date" shall have the meaning specified in
Section 3.1.
"Closing Date" means at 3:00 p.m., London time, on May 7, 1996, or such
other time on the same or such other date as may be agreed upon by the Company
and the Managers.
"Closing Price" means for any day the last reported sales price of the
Common Stock, regular way, or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices for the Common
Stock, regular way, in either case on the New York Stock Exchange, Inc. or, if
the Common Stock is not listed or admitted to trading on such exchange, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, the closing sale price quoted on the Nasdaq National
Market, or if not so quoted, as determined by the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Common Depositary" means The Chase Manhattan Bank, N.A. (London Office),
as depositary for Cedel and the Euroclear Operator.
"Common Stock" means the Company's common stock, par value $0.01 per
share, or as such stock may be reconstituted from time to time.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture, and thereafter means such
successor.
"Conversion Agent" means The Chase Manhattan Bank, N.A., in its capacity
as Conversion Agent pursuant to its appointment as such under Section 2.3, and
its successor or successors as such conversion agent qualified and appointed in
accordance with Section 11.1.
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<PAGE>
"Conversion Price" shall have the meaning specified in Section 13.1.
"Conversion Shares" shall have the meaning specified in Section 13.1.
"Coupon" means any interest coupon appertaining to any security.
"Current Market Price" means, on any date, the average of the Closing
Prices for the 15 consecutive Trading Days during which the principal trading
market for the Common Stock is open commencing 25 Trading Days before the day in
question.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event or condition that is, or after notice or passage
of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section 2.14.
"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the person specified in Section 2.3 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"DTC" means The Depository Trust Company.
"Euroclear Operator" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
"Event of Default" shall have the meaning specified in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission thereunder.
"Exchange Date" shall have the meaning specified in Section 2.7(d).
"GAAP" means United States generally accepted accounting principles 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 ("FASB") or in such
other statements by such other entity as approved by a significant segment of
the accounting profession which are in effect in the United States; provided,
however, that for purposes of determining compliance with covenants in this
Indenture, "GAAP" means such generally accepted accounting principles which are
in effect as of the Closing Date.
-4-
<PAGE>
"Holder" or "Securityholder" means, with respect to a Registered Security,
the person in whose name a Registered Security is registered on the Registrar's
books and, with respect to a Bearer Security, the bearer of such Bearer Security
and, with respect to a Coupon, the bearer thereof.
"Holder Redemption Date" means a date not less than 30 nor more than 60
days after a Change of Control Notice Date (except as otherwise required by
law).
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such person, (i) in
respect of borrowed money, (ii) evidenced by bonds, notes, debentures, loan
agreements or similar instruments or agreements, (iii) representing the balance
deferred and unpaid of the purchase price of any property or services, except
such as would constitute trade payables to trade creditors in the ordinary
course of business that are not more than 90 days past their original due date,
(iv) evidenced by bankers' acceptances or similar instruments issued or accepted
by banks, (v) for the payment of money relating to a Capitalized Lease
Obligation, or (vi) evidenced by a letter of credit or a reimbursement
obligation of such person with respect to any letter of credit; (b) all net
obligations of such person under Interest Swap and Hedging Obligations; (c) all
liabilities of others of the kind described in the preceding clauses (a) or (b)
that such person has guaranteed or that is otherwise its legal liability and all
obligations to purchase, redeem or acquire any Capital Stock; and (d) any and
all deferrals, renewals, extensions, refinancings, refunding (whether direct or
indirect) of any liability of the kind described in any of the preceding clauses
(a), (b) or (c), or this clause (d), whether or not between or among the same
parties.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Interest Payment Date" means the stated due date of an installment of
interest on the Securities.
"Interest Record Date" means an Interest Record Date specified in the
Securities whether or not such Interest Record Date is a Business Day.
"Interest Swap and Hedging Obligation" means any obligation of any person
pursuant to any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate exchange agreement, currency
exchange agreement or any other agreement or arrangement designed to protect
against fluctuations in interest rates or currency values, including, without
limitation, any arrangement whereby, directly or indirectly, such person is
entitled to receive from time to time periodic payments calculated by applying
either a fixed or floating rate of interest on a stated notional amount in
exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Junior Securities" of any Person means any Capital Stock and any
Indebtedness of such Person that by its terms or the terms of the instrument
creating or evidencing it is stated to be (i)
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<PAGE>
subordinated in right of payment to the Securities and has no scheduled
installment of principal due, by redemption, sinking fund payment or otherwise,
on or prior to the Stated Maturity of the Securities and (ii) subordinated in
right of payment to all Senior Indebtedness at least to the same extent as the
Securities.
"Lien" means any mortgage, lien, pledge, charge, security interest or
other encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement and any lease deemed to constitute a security interest and
any option or other agreement to give any security interest).
"London Office" shall have the meaning specified in Section 2.3.
"Managers" means NatWest Securities Limited, Bear, Stearns & Co. Inc.,
CIBC Wood Gundy Securities Corp. and Wasserstein Perella Securities, Inc. and
the subscribers named on Schedule I to the Subscription Agreement.
"Notice of Default" shall have the meaning specified in Section 6.1(d).
"Obligations" means any principal, premium, interest, penalties, fees,
indemnifications, costs, enforcement expenses, collateral protection expenses,
reimbursements, damages and other liabilities payable under the documentation
governing any Senior Indebtedness.
"Officer" means, with respect to the Company, the Chief Executive Officer,
the President, any Executive Vice President, Senior Vice President or Vice
President, the Chief Financial Officer, the Treasurer, the Controller, or the
Secretary of the Company.
"Officers' Certificate" means, with respect to the Company, a certificate
signed by one or more Officers or one or more Officers and an Assistant
Secretary of the Company and otherwise complying with the requirements of
Sections 14.4 and 14.5, if applicable.
"Opinion of Counsel" means a written opinion from legal counsel (who,
unless otherwise specified, may be an employee of the Company) who is reasonably
acceptable to the Trustee and which complies with the requirements of Sections
14.4 and 14.5, if applicable.
"Paying Agent" means The Chase Manhattan Bank, N.A., in its capacity as
Paying Agent pursuant to its appointment as such under Section 2.3, and its
successor or successors as such paying agent qualified and appointed in
accordance with Section 11.1, Chase Manhattan Bank Luxembourg, S.A. in its
capacity as Paying Agent pursuant to its appointment as such under Section
4.2(a), and any additional Paying Agents appointed by the Company as described
in Section 2.3.
"Payment Blockage Period" means the period ending 179 days after the
Payment Notice is delivered as set forth in Section 12.2(b).
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"Payment Default" shall have the meaning specified in Section 12.2.
"Payment Notice" shall have the meaning specified in Section 12.2.
"Person" or "person" means any corporation, individual, limited liability
company, joint stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state or political
subdivision thereof, trust, municipality or other entity.
"Principal" of any Indebtedness means the principal of such Indebtedness
plus, without duplication, any applicable premium on such Indebtedness.
"Principal Corporate Trust Office" shall have the meaning specified in
Section 2.3.
"Property" means any right or interest in or to property or assets of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"QIBs" shall have the meaning specified in Section 2.1(b).
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to Article III of this
Indenture and Section 3 in the form of Security.
"Redemption Price," when used with respect to any Security to be redeemed,
means the redemption price for such redemption pursuant to Section 3 in the form
of Security, which shall include, without duplication, in each case, accrued and
unpaid interest and Additional Amounts, if any, to and including the Redemption
Date.
"Registered Accredited Investor Securities" shall have the meaning
specified in Section 2.1(e).
"Registered Regulation S Securities" shall have the meaning specified in
Section 2.1(c).
"Registered Securities" shall have the meaning specified in Section
2.1(c).
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of April 26 , 1996, by and among the Company and the persons listed on
Schedule I thereto, as such agreement may be amended, modified or supplemented
from time to time in accordance with the terms thereof.
"Regulation S Global Security" shall have the meaning specified in Section
2.1(c).
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"Resale Restriction Termination Date" shall have the meaning specified in
Section 2.6(i).
"Restricted Common Stock" shall have the meaning specified in Section
13.6(b).
"Restricted Security" shall have the meaning specified in Section 2.1(f).
"Rule 144A Global Security" shall have the meaning specified in Section
2.1(d).
"Rule 144A Securities" shall have the meaning specified in Section 2.1(b).
"Securities" means, collectively, the 6% Convertible Subordinated
Debentures due 2006, as supplemented from time to time in accordance with the
terms hereof, issued under this Indenture and "Security" means any of the
Securities.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to the
Securities in global form, or any successor entity thereto.
"Security Register" shall have the meaning specified in Section 2.3.
"Senior Indebtedness" of the Company means any principal, premium, if any,
and interest on, and fees, costs, enforcement expenses, collateral protection
expenses or other obligations with respect to any Indebtedness of the Company
other than the Securities and Indebtedness that by its terms or the terms of the
instrument creating or evidencing it is stated to be not superior in right of
payment to the Securities, but including guarantees given by the Company,
whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed or guaranteed. In no event shall Senior Indebtedness include
(a) indebtedness of the Company owed or owing to any subsidiary of the Company
or any officer, director or employee of the Company or any subsidiary thereof or
(b) any liability for taxes owed or owing by the Company.
"Significant Subsidiary" shall have the meaning assigned to that term
under Regulation S-X promulgated by the Commission, as in effect on the date of
this Indenture.
"Stated Maturity," when used with respect to any Security, means May 1,
2006.
"Subscription Agreement" means that certain Subscription Agreement, dated
April 26, 1996, by and among the Company and the Managers named in Schedule I
thereto, as such agreement may be amended, modified or supplemented from time to
time in accordance with the terms thereof.
"Subsidiary" with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power normally entitled to vote in
the election of directors is at the time, directly
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or indirectly, owned by such person, by such person and one or more Subsidiaries
of such person or by one or more Subsidiaries of such person, (ii) a partnership
in which such person or a Subsidiary of such person is, at the time, a general
partner, or (iii) any other person (other than a corporation) in which such
person, one or more Subsidiaries of such person, or such person and one or more
Subsidiaries of such person, directly or indirectly, at the date of
determination thereof has at least majority ownership interest.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the New York Stock
Exchange (or, if the Common Stock is not listed or admitted to trading thereon,
on the principal national securities exchange on which the Common Stock is
listed or admitted to trading).
"Transfer Agent" shall have the meaning specified in Section 4.2(b).
"Transfer Notice" means the certification set forth on the reverse of each
Security.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
administration (or any successor group) of the Trustee or any other officer of
the Trustee customarily performing functions similar to those performed by the
Persons who at that time shall be such officers, and also means, with respect to
a particular corporate trust matter, any other officer of the Trustee to whom
such trust matter is referred because of such person's knowledge of and
familiarity with the particular subject.
"U.S. Government Obligations" means direct noncallable obligations of, or
noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
SECTION 1.2. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
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"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Indenture securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and words in the plural
include the singular;
(e) provisions apply to successive events and transactions;
(f) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision;
(g) including shall be deemed to mean "including, without limitation,";
and
(h) references to Sections or Articles refer to such Section or Article in
this Indenture, unless stated otherwise.
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ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating.
(a) The Company has, by a Subscription Agreement, dated April 26, 1996
(the "Subscription Agreement"), by and among the Company and the several
managers named in Schedule I thereto (the "Managers"), agreed to issue and sell
to the Managers up to U.S.$143,750,000 aggregate principal amount of its 6%
Convertible Subordinated Debentures due 2006.
(b) Pursuant to the Subscription Agreement, the Managers may resell the
Securities to (i) persons who are not "U.S. Persons" (as such term is defined in
Regulation S promulgated by the Commission pursuant to the Securities Act) in
transactions that meet the requirements of Regulation S, (ii) "qualified
institutional buyers" (as such term is defined in Rule 144A promulgated by the
Commission pursuant to the Securities Act and hereinafter referred to as "QIBs")
in reliance on Rule 144A (the Securities that are resold by the Managers
pursuant to Rule 144A being hereinafter referred to as the "Rule 144A
Securities"), and (iii) institutional "accredited investors" (within the meaning
of Rule 501(a)(1), (2), (3) or (7) promulgated by the Commission pursuant to the
Securities Act) (the Securities that are resold by the Managers to institutional
"accredited investors" being hereinafter referred to as the "Accredited Investor
Securities").
(c) The Securities will initially be issued in the form of a temporary
global debenture in bearer form without coupons or conversion rights in the
aggregate principal amount of the entire issue of Securities less the aggregate
principal amount of the Rule 144A Securities and Accredited Investor Securities
concurrently issued, substantially in the form of Exhibit B hereto (the
"Regulation S Global Security"). As hereinafter provided, the Regulation S
Global Security may subsequently be exchanged for Securities in printed
definitive form either as (i) bearer Securities ("Bearer Securities") in
denominations of U.S.$1,000 and U.S.$10,000 and with interest Coupons attached
thereto, representing the semi-annual interest payable thereon, or (ii) fully
registered Securities ("Registered Regulation S Securities") in denominations of
U.S.$1,000 and integral multiples thereof, without interest Coupons attached
thereto. Bearer Securities shall be substantially in the form of Exhibit A
hereto, including the Coupons set forth therein but excluding the bracketed
legends, the bracketed schedule and the information appearing therein that
relates to the Registered Securities only. Registered Regulation S Securities
shall be substantially in the form of Exhibit A hereto excluding the bracketed
legends. The Securities which are not Bearer Securities or the Regulation S
Global Security are hereinafter collectively referred to as the "Registered
Securities."
(d) The Rule 144A Securities will initially be issued in the form of a
global security in the aggregate principal amount of the Rule 144A Securities,
which security shall be in substantially the form of Exhibit A hereto, including
the bracketed legends relating to clearance and settlement through The
Depository Trust Company and restrictions on transfer imposed under the
Securities Act and including the bracketed schedule but excluding the Coupons,
and is hereinafter referred to as the "Rule 144A Global Security."
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(e) The Accredited Investor Securities will initially be issued in fully
registered form in denominations of U.S.$1,000 and integral multiples thereof,
which Securities shall be in substantially the form of Exhibit A hereto,
excluding the bracketed legend relating to clearance and settlement through The
Depository Trust Company, including the bracketed legend relating to
restrictions on transfer imposed under the Securities Act, and excluding the
Coupons and the bracketed schedule, and are hereinafter collectively referred to
as "Registered Accredited Investor Securities."
(f) During the period beginning on the Closing Date and ending on the date
which is three years after the Closing Date (or such shorter period as shall be
permitted as a result of an amendment to the rules under the Securities Act in
respect thereof), all Rule 144A Securities and all Accredited Investor
Securities, and all Securities issued upon registration of transfer of or in
exchange for such Securities, shall be "Restricted Securities" and shall be
subject to the restrictions on transfer in Section 2.6 hereof; provided,
however, that the term "Restricted Securities" shall not include (i) Registered
Securities which are issued upon transfer of or in exchange for either Bearer
Securities or Registered Regulation S Securities or (ii) Registered Securities
as to which such restrictions on transfer have been terminated in accordance
with Section 2.6(i) hereof. All Restricted Securities shall bear the legend
required by Section 2.6(h) hereof.
(g) The Registered Securities, the Bearer Securities and the Regulation S
Global Security shall contain such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistent herewith, be
determined by the officer of the Company executing such Securities, as evidenced
by his execution of such Securities.
(h) The Company in issuing the Securities shall use CUSIP numbers, and the
Trustee may use such CUSIP numbers in any notice of redemption with respect to
the Securities. The Company shall obtain one CUSIP number for the Rule 144A
Securities and one for the Registered Securities that are not Restricted
Securities. In addition, the Company shall obtain an ISIN number and a Common
Code for the Regulation S Global Security, the Bearer Securities and the
Registered Regulation S Securities.
(i) In compliance with United States tax laws and regulations, Bearer
Securities may not be offered or sold during the 40-day period beginning on the
Closing Date, or at any time if part of a Manager's unsold allotment, to a
person who is within the United States or to a United States person other than
(a) foreign branches of United States financial institutions if such
institutions agree in writing to comply with the requirements of Section
165(j)(3)(A), (B), or (C) of the Code, and the regulations thereunder, (b)
United States offices of exempt distributors, or (c) United States offices of
international organizations or foreign central banks. United States tax laws and
regulations also require that Bearer Securities not be delivered within the
United States.
(j) The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the forms included in Exhibits A and
B hereto, as applicable. The Securities may
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have notations, legends or endorsements required by law, stock exchange rule or
usage. The Company shall approve the forms of the Securities and any notation,
legend or endorsement on them. Any such notations, legends or endorsements not
contained in the forms of Securities attached as Exhibits A and B hereto shall
be delivered in writing to the Trustee. Each Security shall be dated the date of
its authentication, except that Bearer Securities shall be dated May 7, 1996.
(k) The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
SECTION 2.2. Execution and Authentication.
An authorized Officer of the Company shall sign each Security and each
Coupon for the Company by manual or facsimile signature. The Company's seal
shall be impressed, affixed, imprinted or reproduced on the Securities and may
be in facsimile form.
If an Officer whose signature is on a Security or a related Coupon was an
Officer at the time of such execution but no longer holds that office at the
time the Trustee authenticates the Security, the Security and such Coupon shall
be valid nevertheless and the Company shall nevertheless be bound by the terms
of the Securities, the Coupons and this Indenture.
A Security and the related Coupons shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of authentication on the
Security but such signature shall be conclusive evidence that the Security has
been authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate the Securities for original issue in the
aggregate principal amount of up to U.S.$143,750,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of Securities to be authenticated and the date on which the
Securities are to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed U.S.$143,750,000, except as otherwise
provided herein. Upon the written order of the Company in the form of an
Officers' Certificate, the Trustee shall authenticate Securities in substitution
of Securities originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent. An authenticating agent has the
same rights as an Agent to deal with the Company or its Subsidiaries.
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SECTION 2.3. Registrar and Paying Agent.
The Company hereby appoints The Chase Manhattan Bank, N.A., at present
having its principal corporate trust office at 4 Chase MetroTech Center, Third
Floor, Brooklyn, New York 11245 (together with such other offices as the Trustee
may designate for such purposes, the "Principal Corporate Trust Office"), as its
Trustee in respect of the Securities upon the terms and subject to the
conditions herein set forth (The Chase Manhattan Bank, N.A. and its successor or
successors as such Trustee qualified and appointed in accordance with Section
7.8 hereof are herein called the "Trustee"). The Trustee shall have the powers
and authority granted to and conferred upon it herein and in the Securities, and
such further powers and authority, acceptable to it, to act on behalf of the
Company as the Company may hereafter grant to or confer upon it in writing.
The Company hereby appoints the Principal Corporate Trust Office of The
Chase Manhattan Bank, N.A. in The City of New York and the London office of The
Chase Manhattan Bank, N.A. located at Woolgate House, Coleman Street, London
EC2P 2HD, England (together with such other offices as the Trustee may designate
for such purposes, the "London Office"), as its Paying Agent in respect of the
Securities upon the terms and subject to the conditions herein set forth. The
Paying Agent shall have the powers and authority granted to and conferred upon
it herein and in the Securities, and such further powers and authority,
acceptable to it, to act on behalf of the Company as the Company may hereafter
grant to or confer upon it in writing. The Company may appoint one or more
additional Paying Agents from time to time and may authorize the Paying Agent to
cooperate with one or more additional Paying Agents. As used herein, "paying
agencies" shall mean paying agencies maintained by the Company as provided in
Section 4.2 hereof.
The Company hereby appoints the Principal Corporate Trust Office of The
Chase Manhattan Bank, N.A. and the London Office of The Chase Manhattan Bank,
N.A. (together with such other offices as the Trustee may designate for such
purposes) as its Conversion Agent in respect of the Securities upon the terms
and subject to the conditions herein set forth, and the Registrar, the Paying
Agent, the Conversion Agent, the Transfer Agents (as defined in Section 4.2
hereof) and the Trustee are sometimes herein referred to severally as an "Agent"
and, collectively, as the "Agents"). The Conversion Agent shall have the powers
and authority granted to and conferred upon it herein and in the Securities, and
such further powers and authority, acceptable to it, to act on behalf of the
Company as the Company may hereafter grant to or confer upon it in writing. As
used herein, "conversion agencies" shall mean conversion agencies maintained by
the Company as provided in Section 4.2 hereof.
The Company shall cause to be kept at the Principal Corporate Trust Office
of the Trustee a register (the register maintained in such office being herein
referred to as the "Security Register") in which, subject to such reasonable
regulations as the Trustee may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Trustee is hereby appointed Registrar ("Registrar") for the purpose of
registering Registered Securities and transfers of Registered Securities as
herein provided. The Company may have one or more co-Registrars.
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The Company shall enter into an appropriate written agency agreement with
any Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Rule 144A Global Securities.
The Company initially appoints the Trustee to act as Securities Custodian
with respect to the Rule 144A Global Securities.
SECTION 2.4. Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, premium, if any, interest on or Additional Amounts with respect
to, the Securities (whether such assets have been distributed to it by the
Company or any other obligor on the Securities), and shall notify the Trustee in
writing of any Default in making any such payment. The Company at any time may
require a Paying Agent to distribute all assets held by it to the Trustee and
account for any assets disbursed and the Trustee may at any time during the
continuance of any Payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent, the
Paying Agent (if other than the Company or an Affiliate of the Company) shall
have no further liability for such assets.
SECTION 2.5. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of Registered Securities. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee on or before the third Business Day
preceding each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee
reasonably may require of the names and addresses of Holders of Registered
Securities.
SECTION 2.6. Transfer and Exchange; Restrictions on Transfer.
(a) Upon surrender for registration of transfer of any Registered Security
at any office or agency designated for such purpose by the Company pursuant to
Section 4.2 hereof, the Company shall execute, and the Trustee or an agent
thereof shall authenticate, register and deliver, in the name of the designated
transferee or transferees, one or more new Registered Securities of any
authorized
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denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture; provided, however,
that, with respect to any Registered Security that is a Restricted Security, the
Trustee shall not register the transfer of such Security unless the conditions
in Section 2.6(b) hereof shall have been satisfied. The Holder of each
Restricted Security, by such Holder's acceptance thereof, agrees to be bound by
the transfer restrictions set forth herein and in the legend on such Restricted
Security.
(b) Whenever any Restricted Security is presented or surrendered for
registration of transfer or exchange for a Registered Security registered in a
name other than that of the Holder, no registration of transfer or exchange
shall be made unless:
(i) The registered holder presenting such Restricted Security for
transfer shall have certified to the Trustee in writing that the
registered holder is transferring the Restricted Security to the Company;
(ii) The registered holder presenting such Restricted Security for
transfer shall have certified to the Trustee in writing that the
registered holder is transferring the Restricted Security pursuant to a
Registration Statement that has been declared effective under the
Securities Act;
(iii) The registered holder presenting such Restricted Security for
transfer shall have certified to the Trustee in writing that such
registered holder is transferring such Restricted Security to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in
compliance with the exemption from registration under the Securities Act
provided by Rule 144A thereunder (or a successor provision);
(iv) The registered holder presenting such Restricted Security for
transfer shall have certified to the Trustee in writing that the
registered holder is transferring such Restricted Security outside the
United States in a transaction meeting the requirements of Rule 904 of
Regulation S under the Securities Act;
(v) (A) The registered holder presenting such Restricted Security
for transfer shall have certified to the Trustee in writing that such
registered holder is transferring such Restricted Security to an
institutional "accredited investor" (within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) in a transaction not involving
any general solicitation or general advertising; and (B) a broker or
dealer registered under Section 15 of the Exchange Act shall have
certified to the Trustee in writing that: (x) each person who will become
a beneficial owner of the Restricted Security upon transfer is an
institutional "accredited investor" (as such term is defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act); (y) no general
solicitation or general advertising was made or used by such broker or
dealer in connection with the offer and sale of such Restricted Security
to such person(s); and (z) such institutional accredited investor has been
informed that the Securities
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have not been registered under the Securities Act and are subject to the
restrictions on transfer set forth in the Securities and this Indenture;
or
(vi) The registered holder presenting such Restricted Security for
transfer shall have delivered an opinion of counsel acceptable in form and
substance to the Company, that the transfer is being made pursuant to
another available exemption from, or a transaction not otherwise subject
to, the registration requirements of the Securities Act.
For purposes of this Section 2.6(b), any such certification to the Trustee
in writing shall be in the form of the Transfer Notice set forth on the reverse
of such Security. In the case of a transfer pursuant to the foregoing clauses
(iv), (v) or (vi) above, the Company may require that the registered holder
deliver an opinion of counsel, certifications or other information acceptable to
it in form and substance.
(c) Bearer Securities may, at the option of the holder thereof, be
exchanged for an equal aggregate principal amount of Registered Regulation S
Securities in denominations of $1,000 and integral multiples thereof without
Coupons and/or Bearer Securities of authorized denominations, upon surrender of
the Bearer Securities to be exchanged at any office or agency outside the United
States designated for such purpose by the Company pursuant to Section 4.2
hereof, with all unmatured Coupons and all matured Coupons in default thereto
appertaining. If such Holder is unable to produce any such unmatured Coupon or
Coupons or matured Coupon or Coupons in default, such exchange may be effected
if the Bearer Securities are accompanied by payment in funds acceptable to the
Company in an amount equal to the face amount of such missing Coupon or Coupons
or the surrender of such missing Coupon or Coupons may be waived by the Company
if there be furnished to it and the Trustee such security or indemnity as it may
require to save it, the Trustee, the Paying Agent and any paying agency
harmless. If thereafter the Holder of such Security shall surrender to any
paying agency any such missing Coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment from the Company; provided, however, that, except as otherwise provided
in the form of Bearer Security set forth in Exhibit A hereto, interest
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons outside of the United States, its territories and its possessions.
Bearer Securities and Coupons are transferable upon delivery.
(d) Registered Securities may, at the option of the holder thereof, be
exchanged for Registered Securities of any other authorized denominations and of
a like aggregate principal amount, upon surrender of the Registered Securities
to be exchanged at any office or agency designated for such purpose by the
Company pursuant to Section 4.2 hereof. Registered Securities shall not be
exchangeable for Bearer Securities. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the holder making the
exchange is entitled to receive. If the Registered Security so surrendered for
exchange is a Registered Accredited Investor Security and the Holder thereof
requests in writing that such Registered Accredited Investor Security be
exchanged for an interest in the Rule 144A Global Security, such Registered
Accredited Investor
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Security will be exchangeable into an equal aggregate principal amount of
beneficial interests in the Rule 144A Global Security; provided, however, that,
if such Registered Accredited Investor Security is a Restricted Security, such
exchange may only be made if such Holder certifies to the Trustee in writing
that such Holder is a QIB by completing the Transfer Notice on the reverse of
such Security. Upon any exchange as provided in the immediately preceding
sentence, the Trustee shall cancel such Registered Accredited Investor Security
and cause, or direct any custodian for the Rule 144A Global Security to cause,
in accordance with the standing instructions and procedures existing between the
Depositary and any such custodian, the aggregate principal amount of Securities
represented by the Rule 144A Global Security to be increased accordingly. If no
Rule 144A Global Securities are then outstanding, the Company shall issue and
the Trustee shall authenticate a new Rule 144A Global Security in the
appropriate principal amount.
(e) Any person having a beneficial interest in a Rule 144A Global Security
may upon request exchange such beneficial interest for a Registered Security
only as provided in this paragraph. Upon receipt by the Company and the Trustee
of (i) written instructions (or such other form of instructions as is customary)
on behalf of any person having a beneficial interest in a Rule 144A Global
Security and (ii) in the case of a Restricted Security, the following additional
information and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the person
designated as being the beneficial owner, a certification to that effect
from such person; or
(B) if such beneficial interest is being transferred to a person
other than the person designated as being the beneficial owner, a
certification from such person that the provisions of Section 2.6(b)
hereof have been satisfied;
in which case the Trustee or any custodian for the Rule 144A Global Security, at
the direction of the Trustee shall, in accordance with the standing instructions
and procedures existing between the Depositary and such custodian, cause the
aggregate principal amount of the Rule 144A Global Security to be reduced
accordingly and, following such reduction, the Company shall execute and the
Trustee or an agent thereof shall authenticate and deliver to the transferee a
Registered Security in the appropriate principal amount and, if such Registered
Security is a Restricted Security, including the appropriate legend. Registered
Securities issued in exchange for a beneficial interest in the Rule 144A Global
Security pursuant to this paragraph shall be registered in such names and in
such authorized denominations as the Trustee shall be instructed in writing. The
Trustee shall deliver such Registered Securities to the persons in whose names
such Securities are so registered.
(f) Notwithstanding any other provision of this Indenture (other than the
provisions set forth in Section 2.6(e) hereof), the Rule 144A Global Security
may not be transferred as a whole except 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.
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(g) If at any time either (i) the Depositary for the Rule 144A Global
Security notifies the Company and the Company notifies the Trustee in writing
that the Depositary is unwilling or unable to continue as Depositary for the
Rule 144A Global Security and a successor Depositary for the Rule 144A Global
Security is not appointed by the Company within 90 days after delivery of such
notice, or (ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Registered Securities under this
Indenture, then the Company shall execute, and the Trustee shall authenticate
and deliver, Registered Securities in an aggregate principal amount equal to the
principal amount of the Rule 144A Global Security in exchange for such Rule 144A
Global Security (registered in the names and denominations specified by the
Depositary).
(h) Each certificate evidencing Restricted Securities shall bear a legend
in substantially the following form:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS,
ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE COMPANY THAT: (I) IT HAS
ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS
SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS (OR SUCH SHORTER PERIOD
AS SHALL BE PERMITTED AS A RESULT OF AN AMENDMENT TO THE RULES UNDER THE
SECURITIES ACT IN RESPECT THEREOF) AFTER THE LATER OF THE DATE OF ORIGINAL
ISSUANCE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED
PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") EXCEPT (A)
TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
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REGULATION S UNDER THE SECURITIES ACT PURSUANT TO AND IN COMPLIANCE WITH
REGULATION S, (E) IN A TRANSACTION ARRANGED BY A BROKER OR DEALER
REGISTERED UNDER THE UNITED STATES SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE MEANING OF
SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT) THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE
JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE
RESTRICTIONS SET FORTH IN (II) ABOVE. IF ANY RESALE OR OTHER TRANSFER OF
THIS SECURITY IS PROPOSED TO BE MADE PURSUANT TO CLAUSE II(E) ABOVE PRIOR
TO THE DATE WHICH IS THREE YEARS (OR SUCH SHORTER PERIOD AS SHALL BE
PERMITTED AS A RESULT OF AN AMENDMENT TO THE RULES UNDER THE SECURITIES
ACT IN RESPECT THEREOF) AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF, THE
TRANSFEROR SHALL DELIVER A LETTER FROM THE TRANSFEREE CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY. ANY OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE
FOREGOING CLAUSES (II)(D), (E) AND (F) IS SUBJECT TO THE RIGHT OF THE
ISSUER OF THIS SECURITY AND THE TRUSTEE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM
IN FORM AND SUBSTANCE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
(i) The restrictions imposed by Section 2.6(b) upon the transferability of
any particular Restricted Security shall cease and terminate (i) when such
Restricted Security has been (x) sold pursuant to an effective registration
statement under the Securities Act or (y) transferred pursuant to Rule 144 under
the Securities Act (or any successor provisions thereto), unless the Holder is
an affiliate of the Company within the meaning of said Rule 144 (or such
successor provision) or (ii) upon the date which is three years (or such shorter
period as shall be permitted as a result of an amendment to the rules under the
Securities Act in respect thereof) after the later of the date of original issue
and the last date on which the Company or any Affiliate of the Company was the
owner of such Restricted Security (or any predecessor security)(the "Resale
Restriction Termination Date"). Any Restricted Security as to which such
restrictions on transfer shall have expired in accordance with their terms or
shall have terminated may, upon surrender of such Restricted Security
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for exchange to the Trustee in accordance with the provisions of this Section
2.6(i) (accompanied, in the event that such restrictions on transfer have
terminated by reason of a transfer pursuant to Rule 144 (or any successor
provision), by an opinion of counsel reasonably acceptable to the Company,
addressed to the Company and the Trustee and in form and scope satisfactory to
the Company, to the effect that the transfer of such Restricted Security has
been made in compliance with Rule 144 (or such successor provision)), be
exchanged for a new Registered Security, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by Section 2.6(h)
hereof. The Company shall promptly inform the Trustee in writing of the
effective date of any registration statement registering the Securities under
the Securities Act.
(j) The transfer and exchange of the Rule 144A Global Security or
beneficial interest therein shall be effected through the Depositary, in
accordance with this Indenture and the procedures of the Depositary therefor,
which shall include restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act.
(k) At such time as all beneficial interests in the Rule 144A Global
Security have either been exchanged for Registered Securities, redeemed,
repurchased or canceled, the Rule 144A Global Security shall be returned to or
retained and canceled by the Trustee. At any time prior to such cancellation, if
any beneficial interest in the Rule 144A Global Security is exchanged for
Registered Securities, redeemed, repurchased or canceled, the principal amount
of Securities represented by the Rule 144A Global Security shall be reduced
accordingly and an endorsement shall be made on the Rule 144A Global Security,
by the Trustee or any custodian therefor, at the direction of the Trustee, to
reflect such reduction.
(l) All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
obligations, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
(m) Every Registered Security presented for registration of transfer or
surrendered for exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Trustee and the
Transfer Agent to which such Security is presented or surrendered and the
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing. All such instruments shall comply with the applicable provisions of
this Section 2.6. The registration of the transfer of a Registered Security by
the Registrar shall be deemed to be the written acknowledgment of such transfer
on behalf of the Company.
(n) No service charge shall be made for any registration of transfer or
exchange, but the Company or the Transfer Agent may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 2.7 hereof or not involving any registration
of transfer.
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(o) Neither the Company nor the Trustee nor any of the offices or agencies
designated for the purposes specified in Section 4.2 hereof nor any Transfer
Agent shall be required (i) to exchange Bearer Securities for Registered
Securities during the period between the close of business on any Interest
Record Date and the opening of business on the next succeeding Interest Payment
Date, (ii) to exchange any Bearer Security (or portion thereof) for a Registered
Security if the Company shall determine and inform the Trustee in writing that,
as a result thereof, the Company may incur adverse consequences under the
federal income tax laws and regulations (including proposed regulations) of the
United States in effect or proposed at the time of such exchange, or (iii) in
the event of a redemption in part, (A) to register the transfer or exchange of
Registered Securities or to exchange any Bearer Securities for Registered
Securities during a period of 15 days immediately preceding the date notice is
given pursuant to Section 3.1 hereof and Section 3(e) of the Registered
Securities and the Bearer Securities identifying the serial numbers of any
Securities to be redeemed, or (B) to register the transfer or exchange of any
Registered Security so selected for redemption in whole or in part, except
portions not being redeemed of Securities being redeemed in part, or (C) to
exchange any Bearer Security called for redemption; provided, however, that a
Bearer Security called for redemption may be exchanged, on the terms and
conditions set forth above, for a Registered Security that is simultaneously
surrendered, with written instruction for payment on the Redemption Date, unless
the Redemption Date is between the close of business on any Interest Record Date
and the close of business on the next succeeding Interest Payment Date, in which
case such exchange may only be made prior to the Interest Record Date
immediately preceding the Redemption Date.
SECTION 2.7. Exchange.
(a) At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company in
accordance with this Indenture to the Trustee for authentication together with
an Officers' Certificate of the Company directing such authentication, and the
Trustee shall thereupon authenticate and make such Securities available for
delivery upon and in accordance with the written order of the Company. No
Security shall be valid or enforceable for any purpose unless and until the
certificate of authentication thereon shall have been manually signed by a duly
authorized signatory of the Trustee or an agent thereof and such duly executed
certificate of authentication on any Security shall be conclusive evidence that
the Security has been duly authenticated and delivered hereunder.
(b) The Regulation S Global Security, the Rule 144A Global Security and
the Registered Accredited Investor Securities will be issued upon payment in
full of the purchase price to the Company or its order in United States dollars
by wire transfer to a United States dollar account designated by the Company, at
3:00 p.m., London time, on the "Closing Date." Such payment will be made (i)
upon authorization from the Managers, (ii) against delivery as provided in
Section 2.7(c) hereof of the amount, if any, of Rule 144A Securities and
Accredited Investor Securities as the Managers may request and as they shall
direct, and (iii) against the delivery of the Regulation S Global Security for
the balance of the Securities to the Common Depositary. The Regulation S Global
Security shall be held on deposit with the Common Depositary for the accounts of
the Euroclear Operator and Cedel, for credit to the Managers' respective
Securities Clearance Accounts
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(or to such other accounts as NatWest Securities Limited may have specified)
with the Euroclear Operator or Cedel.
(c) On the Closing Date, the Company shall execute and deliver to (i) the
Managers, at the offices of Gibson, Dunn & Crutcher, LLP in The City of New
York, temporary Registered Accredited Investor Securities (which shall have been
duly authenticated by the Trustee and which may be in typewritten form) in
respect of the Accredited Investor Securities and (ii) the Depositary, at its
office in New York, the Rule 144A Global Security (which shall have been duly
authenticated by the Trustee and which may be in typewritten form) in respect of
the Rule 144A Securities. On or before the Exchange Date (as defined in Section
2.7(d)), the Company will execute and deliver to the Trustee at the Principal
Corporate Trust Office, Registered Accredited Investor Securities in the
aggregate principal amount of the Registered Accredited Investor Securities
outstanding. At the request of a Holder of temporary Registered Accredited
Investor Securities, the Trustee shall deliver to such Holder Registered
Accredited Investor Securities in exchange for an equal aggregate principal
amount of temporary Registered Accredited Investor Securities.
(d) On or before the Exchange Date, the Company will execute and deliver
to The Chase Manhattan Bank Luxembourg, S.A., definitive Registered Regulation S
Securities and Bearer Securities in the aggregate principal amount outstanding
in the Regulation S Global Security and in such proportion of Registered
Regulation S Securities to Bearer Securities as the Trustee may specify.
"Exchange Date" means the date following the expiration of the 40-day period
commencing on the Closing Date. On or after the Exchange Date, the Regulation S
Global Security may be surrendered to The Chase Manhattan Bank Luxembourg, S.A.
to be exchanged, as a whole or in part, for definitive Bearer Securities without
charge, and the Trustee or an agent thereof shall authenticate and deliver, in
exchange for such Regulation S Global Security or the portions thereof to be
exchanged, an equal aggregate principal amount of definitive Bearer Securities,
but only upon presentation to the Trustee at its London Office of a certificate
of the Euroclear Operator or Cedel with respect to the Regulation S Global
Security or portions thereof being exchanged, to the effect that it has received
a certificate or certificates satisfactory to it with respect to Non-U.S. Person
beneficial ownership on the part of the Holders of the Securities accepted for
clearance through Euroclear or Cedel, as appropriate, dated no earlier than 15
days prior to the Exchange Date and signed by the person appearing in its
records as the owner of the Regulation S Global Security or portions thereof
being exchanged. Similarly, after the Exchange Date, portions of the Regulation
S Global Security may be exchanged for an equal aggregate principal amount of
definitive Registered Regulation S Securities upon presentation to The Chase
Manhattan Bank Luxembourg, S.A. of a request for such exchange accompanied by a
certification of Non-U.S. beneficial ownership.
(e) The definitive Securities and Coupons shall be printed, lithographed
or engraved or produced by any combination of these methods or may be produced
in any other manner permitted by the rules of any securities exchange on which
the Securities may be listed, all as determined by the Officers executing such
Securities and Coupons, as evidenced by such execution.
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(f) Bearer Securities and Registered Securities may only be issued in
exchange for interests in the Temporary Regulation S Global Security upon
receipt of certification of non-U.S. beneficial ownership and undertakings not
to resell the related security in the United States or in contravention of
restrictions on resale to U.S. Persons. Bearer Securities will be delivered only
outside the United States, its territories or its possessions.
(g) The delivery to the Trustee by the Euroclear Operator or Cedel of any
certificate referred to above may be relied upon by the Company and the Trustee
as conclusive evidence that a corresponding certificate or certificates has or
have been delivered to the Euroclear Operator or Cedel pursuant to the terms of
this Indenture.
(h) Upon any such exchange of a portion of the Regulation S Global
Security for a definitive Bearer Security or Securities or a definitive
Registered Regulation S Security or Securities, the Regulation S Global Security
shall be endorsed by the Trustee or an agent thereof to reflect the reduction of
its principal amount by an amount equal to the aggregate principal amount of
such definitive Security or Securities. Until so exchanged in full for
definitive Securities, the Regulation S Global Security shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder, except that neither the Holder thereof
nor the beneficial owners of the Regulation S Global Security shall be entitled
to receive payment of interest thereon or exercise conversion rights with
respect thereto.
SECTION 2.8. Replacement Securities.
If a mutilated Security or a Security with a mutilated Coupon appertaining
thereto is surrendered to the Trustee or if the Holder of a Security or Coupon
claims and submits to the Trustee an affidavit or other evidence, satisfactory
to the Trustee, to the effect that the Security or Coupon has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate and deliver, in lieu of any such lost, destroyed or wrongfully
taken Security or in exchange for the Security to which a lost, destroyed or
wrongfully taken Coupon appertains (with all appurtenant Coupons not lost,
destroyed or wrongfully taken) a replacement Security with Coupons corresponding
to the Coupons, if any, appertaining to such lost, destroyed or wrongfully taken
Security or to the Security to which such lost, destroyed or wrongfully taken
Coupon appertains, if the Trustee's requirements are met. If required by the
Trustee or the Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Security or Coupon is replaced. The Company may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a Security or
Coupon.
In case any such lost, destroyed or wrongfully taken Security or Coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security or Coupon; provided,
however, that principal of, premium, if any, and interest on Bearer Securities
shall, except as otherwise provided in the Bearer Securities, be payable only at
an office or agency located outside the United States and its possessions.
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Every replacement Security or Coupon is an additional obligation of the
Company.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or Coupons.
SECTION 2.9. Outstanding Securities.
Securities outstanding at any time are all the Securities that have been
authenticated by the Trustee (including any Security represented by a Rule 144A
Global Security or a Regulation S Global Security) except those canceled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Security effected by the Trustee hereunder and those described in this
Section 2.9 as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security, except as
provided in Section 2.10 hereof.
If a Security is replaced pursuant to Section 2.8 hereof (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.8
hereof.
If on a Redemption Date the Paying Agent (other than the Company or an
Affiliate of the Company) holds Cash or U.S. Government Obligations sufficient
to pay all of the principal and interest due on the Securities payable on that
date in accordance with Section 3.3 hereof and payment of the Securities called
for redemption is not otherwise prohibited pursuant to Article XII hereof or
otherwise, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.10. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or an Affiliate of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that the Trustee actually knows are so owned
shall be disregarded.
SECTION 2.11. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee or an agent thereof shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company reasonably and in
good faith considers appropriate for temporary Securities. Without unreasonable
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delay, the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as permanent Securities authenticated and delivered
hereunder, except as provided in Section 2.7(h) hereof.
SECTION 2.12. Cancellation.
The Company at any time may deliver Securities or Coupons to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities or Coupons surrendered to them for transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or an Affiliate of the Company), and no one
else, shall cancel and, at the written direction of the Company, shall dispose
of all Securities or Coupons surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.8 hereof, the Company may not issue new
Securities or Coupons to replace Securities or Coupons that have been paid or
delivered to the Trustee for cancellation. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section 2.12, except as expressly permitted in the form of Securities and as
permitted by this Indenture.
SECTION 2.13. Payment.
(a) The Company will pay or cause to be paid to the Paying Agent the
amounts, at the times and for the purposes, set forth herein and in the text of
the Securities, and the Company hereby authorizes and directs the Paying Agent
to make payment of the principal of, premium, if any, and interest on and
Additional Amounts, if any, on the Securities from such payments.
(b) At least 15 days prior to the date on which any payment of Additional
Amounts shall be required to be made pursuant to Section 2 of the Securities,
the Company will furnish the Paying Agent, each other paying agency of the
Company and the Trustee with a certificate of one of its duly authorized
officers instructing the Paying Agent and each other paying agency of the
Company as to the amounts required (i) to be deducted or withheld for or on
account of any taxes described in Section 2 of the Securities from a payment to
be made on that date and (ii) to be paid to each Holder of Securities or Coupons
as Additional Amounts pursuant to that paragraph. If the foregoing amounts are
not uniform for all Holders, then the Company's certificate shall specify by
country of residence or other factor the amounts required to be deducted or
withheld and to be paid as Additional Amounts for each Holder or class of
Holders of the Securities or Coupons. In the absence of its receipt of any such
certificate from the Company, the Paying Agent may make payment without
deduction or withholding. The Company hereby agrees to indemnify the Paying
Agent, each other paying agency of the Company and the Trustee for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence or willful misconduct on their part, arising out of or in
connection with actions taken or omitted by any of them in reliance on any
certificate furnished pursuant to this Section.
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(c) Interest on any Registered Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security is registered at the close of business on the
Interest Record Date even if such Registered Security is canceled after such
Interest Record Date. In case a Bearer Security is surrendered for exchange for
a Registered Security after the close of business on any Interest Record Date
and before the opening of business on the next succeeding Interest Payment Date,
the Trustee shall not be required to perform such transfer or exchange of such
Security.
(d) If a Registered Security is converted after the close of business on
an Interest Record Date and before the opening of business on the next
succeeding Interest Payment Date, the interest due on such Interest Payment Date
shall be paid on such Interest Payment Date to the person in whose name that
Security is registered at the close of business on that Interest Record Date.
(e) In order to provide for the payment of the principal of, premium, if
any, and interest on the Securities (and Additional Amounts, if any, with
respect thereto) as the same shall become due and payable, the Company shall pay
to the Paying Agent to accounts specified by the Paying Agent, in same day
funds, the following amounts (and the Company shall give notice to the Trustee
at least one full Business Day prior to the date payment is due to the Paying
Agent as to the means of such payment), to be held and applied by the Paying
Agent as hereinafter set forth:
(i) The Company shall pay to the Paying Agent by 12:00 noon (New
York time) on the Business Day immediately prior to each Interest Payment
Date an amount sufficient to pay the interest due on (and Additional
Amounts, if any, on) all the Securities outstanding on such Interest
Payment Date, and the Paying Agent shall apply the amounts so paid to it
to the payment of such interest (and Additional Amounts, if any) on such
Interest Payment Date. On the second business day prior to the due date
for any payment, the Company shall confirm, by facsimile notice, that such
payment will be made.
(ii) If the Company shall elect, or shall be required, to redeem all
or any part of the Securities in accordance with Section 3.1 hereof, the
Company will pay to the Paying Agent (other than the Company or an
Affiliate of the Company) on the Business Day immediately prior to the
Redemption Date thereof an amount sufficient (with any amount then held by
the Paying Agent and available for the purpose) to pay the Redemption
Price of the Securities called for redemption or entitled to be redeemed,
together with accrued interest thereon (and Additional Amounts, if any,
with respect thereto) to the Redemption Date fixed for redemption and not
paid pursuant to subsection (e)(i) of Section 2.13, and the Paying Agent
shall apply such amount to the payment of the Redemption Price and accrued
interest (and Additional Amounts, if any) in accordance with the terms of
Article III hereof.
(iii) On the Business Day immediately prior to the Stated Maturity
of the Securities, the Company shall pay to the Paying Agent an amount
which, together with any amounts then held by the Paying Agent, and
available for payment thereof, shall be equal to the entire amount of
principal and interest (and Additional Amounts, if any) to be due on
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such maturity date on all the Securities then outstanding, and the Paying
Agent shall apply such amount to the payment of the principal of and
interest on (and Additional Amounts, if any, on) the Securities in
accordance with the terms of the Securities.
SECTION 2.14. Defaulted Interest.
Any interest on any Registered Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus, to the
extent lawful, any interest payable on the defaulted interest (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
holder on the relevant Interest Record Date, and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in subsection (a)
or (b) below:
(a) The Company may make payment of any Defaulted Interest to the Holder
of a Registered Security on a subsequent record date established by notice given
by mail by or on behalf of the Company to such Holder not less than 15 days
preceding such subsequent record date, such record date to be not less than 10
days preceding the date of payment of such Defaulted Interest.
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner shall be deemed reasonably
practicable by the Trustee.
Any Defaulted Interest payable in respect of any Bearer Security shall be
payable pursuant to such procedures as may be satisfactory to the Trustee in
such manner that there is no discrimination between the Holders of Registered
Securities and Bearer Securities, and notice of the payment date therefor shall
be given by the Trustee, in the name and at the expense of the Company, in the
manner provided in Section 14.2 hereof.
Subject to the foregoing provisions of this Section 2.14, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 2.15. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
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ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption.
If, under the circumstances described in Section 3 of the Registered
Securities and Bearer Securities, the Company shall elect or be required to
redeem the outstanding Securities, the following provisions shall be applicable:
(a) Except in the case of redemption pursuant to Section 3(d) of the
Registered Securities and the Bearer Securities (in which case notice shall be
given by the Company as provided in subsection (c) of this Section 3.1), the
Company shall, at least 75 days (or such shorter period as shall be reasonably
acceptable to the Trustee) before the date designated for such redemption, give
written notice to the Agents of its election to redeem the outstanding
Securities on the Redemption Date specified in such notice and state in such
notice that the conditions precedent to such redemption have occurred and
describe them, and shall request the Trustee to arrange for publication and
mailing of the notice specified in subsection (b) below.
(b) In the case the Company shall give notice to the Agents of its
election to redeem the Securities, the Trustee shall cause to be given to
Holders on behalf of and at the expense of the Company a notice of redemption in
accordance with Section 14.2 hereof. The Trustee shall send a copy of such
notice of redemption to the Company, the Paying Agent (if different from the
Trustee) and each other paying agency of the Company. In the case of a
redemption in whole, notice will be given once not more than 60 nor less than 30
days prior to the Redemption Date. In the case of a partial redemption, notice
will be given twice, the first such notice to be given not more than 60 nor less
than 45 days prior to the Redemption Date and the second such notice to be given
not more than 45 and not less than 30 days prior to the Redemption Date. The
Trustee shall notify the Company promptly of the portions of outstanding
Securities to be called for redemption as determined pursuant to Section 3(a) of
the Registered Securities and Bearer Securities.
(c) Under the circumstances described in Section 3(d) of the Registered
Securities and Bearer Securities concerning the redemption of outstanding
Securities at the option of the Holders thereof, the following provisions shall
be applicable:
(i) The Company shall give notice to the Trustee of the occurrence
of a Change of Control immediately upon the occurrence of such Change of
Control or, if later, immediately upon learning of the occurrence of such
Change of Control (provided, that the Company shall be deemed to have
knowledge of any information contained in any Statement on Schedule 13D or
13G filed with the Commission). Such notice shall state:
A. The Holder Redemption Date in respect of such Change of
Control;
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B. The Redemption Price as set forth in Section 3(d) of the
Registered Securities and Bearer Securities;
C. The place or places of payment of the Registered Securities
and Bearer Securities; and
D. Such other information as the Company shall deem advisable.
(ii) The Trustee shall cause to be given to the Holders on behalf of
the Company a notice of entitlement to redeem in accordance with the
provisions of Section 14.2 hereof. Such notice shall be given on behalf
and at the expense of the Company and shall be given not later than 30
days after the later of the Exchange Date, the date of the occurrence of a
Change of Control or the date of receipt of notice by the Trustee from the
Company of such Change of Control (the date on which such notice is given
by the Trustee shall be the "Change of Control Notice Date").
(iii)Upon the deposit of any of the Registered Securities or Bearer
Securities with the agency designated by the Company as the place for
payment of the Registered Securities and Bearer Securities together with a
duly signed and completed Redemption Notice in the form set forth on the
reverse of the Bearer Securities and Registered Securities, all in
accordance with the provisions of Section 3 of the Registered Securities
and Bearer Securities, the Holder of such Registered Security and Bearer
Security shall be entitled to receive a non-transferable receipt
evidencing such deposit.
(iv) The Trustee shall notify the Company on each Business Day in
the five Business Days prior to the Holder Redemption Date for outstanding
Securities to be redeemed under this Section 3.1(c) of the amount required
to redeem such Securities.
(d) Notices relating to the redemption of Securities whether at the option
of the Company or the Holder thereof shall specify: the Redemption Date or the
Holder Redemption Date, as the case may be; the Redemption Price; the place or
places of payment; that payment will be made upon presentation and surrender of
the Securities to be redeemed, together, in the case of a Bearer Security, with
all appurtenant Coupons, if any, maturing subsequent to the Redemption Date;
that interest accrued to the Redemption Date will be paid as specified in such
notice; that on and after said date interest thereon will cease to accrue; that
the Holder will have the right to convert such Holder's Securities until the
close of business on the fifth day (or if such day is not a Business Day, the
next succeeding Business Day) preceding the related Redemption Date or Holder
Redemption Date, as the case may be; and such other information as the Company
may wish to include. In the case of a redemption by the Company at the option of
the Holder of a Security, the notices given by the Trustee informing a Holder of
such Holder's entitlement to redeem shall also specify that a Holder electing
redemption will be entitled to revoke its election by delivering a written
notice of such revocation, together with the Holder's nontransferable receipt
for such Security, to the agency designated by the Company as the place for the
payment of the Securities to be so redeemed not later
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than the Holder Redemption Date in the case of a redemption pursuant to Section
3(d) of the Registered Securities and Bearer Securities. In the case of a
redemption in part at the option of the Company, notices shall specify the
aggregate principal amount of Securities to be redeemed and the aggregate
principal amount of Securities outstanding after such partial redemption. The
first notice shall specify the last date on which exchanges or transfers of
Securities may be made (in accordance with Section 2.6(o) hereof), and the
second notice shall specify the serial numbers of the Securities and the
portions thereof called for redemption. In the case of a redemption in whole or
in part by the Company, notices shall specify the date the conversion privilege
expires in accordance with Section 4(a) of the Registered Securities and Bearer
Securities. Such notices shall also state that the conditions precedent, if any,
to such redemption have occurred and, in the case of a redemption pursuant to
Section 3(d) of the Registered Securities and Bearer Securities, the last day
for surrender of the Securities being redeemed.
SECTION 3.2. Effect of Notice of Redemption.
Once notice of redemption is made in accordance with Section 3.1 hereof,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued and unpaid interest and
Additional Amounts, if any, to the Redemption Date. Upon surrender to the
Trustee or Paying Agent, such Securities called for redemption shall be paid at
the Redemption Price, including accrued and unpaid interest and Additional
Amounts, if any, to the Redemption Date; provided that if the Redemption Date is
after a regular Interest Record Date and on or prior to the corresponding
Interest Payment Date, the accrued interest to the Redemption Date and
Additional Amounts, if any, shall be payable on the Redemption Date to the
Holder of the redeemed Securities registered on the relevant Interest Record
Date; and provided, further, that if a Redemption Date is not a Business Day,
payment shall be made on the next succeeding Business Day and no interest or
Additional Amounts shall accrue for the period from such Redemption Date to such
succeeding Business Day.
SECTION 3.3. Deposit of Redemption Price.
By 12:00 noon, New York time, on the Business Day immediately prior to the
Redemption Date, the Company shall deposit with the Paying Agent (other than the
Company or an Affiliate of the Company) Cash sufficient to pay the Redemption
Price of, including accrued and unpaid interest on, and Additional Amounts with
respect to, all Securities to be redeemed on such Redemption Date (other than
Securities or portions thereof called for redemption on that date that have been
delivered by the Company to the Trustee for cancellation). The Paying Agent
shall promptly return to the Company any Cash so deposited which is not required
for that purpose upon the written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not prohibited under Article XII hereof or otherwise, interest and
Additional Amounts on the Securities to be redeemed will cease to accrue on the
applicable Redemption Date, whether or not such Securities are presented for
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payment. Notwithstanding anything herein to the contrary, if any Security
surrendered for redemption in the manner provided in the Securities shall not be
so paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest and Additional Amounts shall
continue to accrue and be paid from the Redemption Date until such payment is
made on the unpaid principal, and, to the extent lawful, on any interest not
paid on such unpaid principal, in each case at the rate and in the manner
provided in Section 4.1 hereof and the Security.
SECTION 3.4. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the Company
shall execute and the Trustee or an agent thereof shall authenticate and deliver
to the Holder, without service charge to the Holder, a new Security or
Securities equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities.
The Company shall punctually pay the principal of, premium, if any,
interest on, and Additional Amounts, if any, with respect to, the Securities on
the dates and in the manner provided in the Securities, as applicable. An
installment of principal of, premium, if any, interest on, or Additional
Amounts, if any, with respect to, the Securities shall be considered paid on the
date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds for the benefit of the Holders on that date Cash
deposited and designated for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
SECTION 4.2. Maintenance of Office or Agency.
(a) So long as any of the Registered Securities remain outstanding or
until monies for the payment of all principal of, premium, if any, and interest
on (and Additional Amounts, if any, with respect to) all outstanding Securities
shall have been made available at the office of the Paying Agent and shall have
been returned to the Company as provided in Section 8.2 hereof, the Company will
maintain in The City of New York, an office or agency where the Registered
Securities may be presented or surrendered for payment, an office or agency
where the Securities may be surrendered for conversion as provided in this
Indenture and an office or agency where notices and demands to or upon the
Company with respect to the Registered Securities or this Indenture may be
served, in each case which office or agency shall be a bank or trust company
organized, in good standing and
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doing business under the laws of the United States of America or of any State of
the United States of America. So long as any Bearer Securities remain
outstanding or until monies for the payment of all principal of, premium, if
any, and interest on (and Additional Amounts, if any, with respect to) all
outstanding Bearer Securities shall have been made available at the office of
the Paying Agent and shall have been returned to the Company as provided in
Section 8.2 hereof, the Company will maintain, in at least one city in Western
Europe, which shall be Luxembourg so long as the Securities are listed on the
Luxembourg Stock Exchange, an office or agency where Bearer Securities may be
surrendered for payment or conversion pursuant to Section 2.6 hereof and where
notices and demands to or upon the Company in respect of the Bearer Securities
of that series or of this Indenture may be served. The Company hereby appoints
Chase Manhattan Bank Luxembourg, S.A., 5 Rue Plaetis, L-2338 Luxembourg, as
Paying Agent in respect of the Bearer Securities. The Company now intends to
maintain additional agencies (subject to applicable laws and regulations) where
Bearer Securities and Coupons may be surrendered for payment, where Registered
Securities may be surrendered for payment and where Securities may be
surrendered for conversion in London, England, and during such period to keep
the Agents advised of the names and locations of such agencies. Unless the
Company shall otherwise notify each of the Agents in writing, the sole such
paying agencies and conversion agencies shall be the agencies specified in the
Securities.
(b) So long as there shall be Securities outstanding or until monies for
the payment of all principal of, premium, if any, and interest on (and
Additional Amounts, if any, with respect to) all outstanding Securities shall
have been made available at the office of the Paying Agent and shall have been
returned to the Company as provided in Section 8.2 hereof, the Company shall
maintain a Security Registrar and additional transfer agencies (each, a
"Transfer Agent" and, collectively, the "Transfer Agents") (i) where Registered
Securities may be surrendered for registration of transfer or for exchange for
Registered Securities in The City of New York and (ii) in at least one city in
Western Europe, which shall be Luxembourg so long as the Securities are listed
on the Luxembourg Stock Exchange, where Registered Securities may be surrendered
for purposes of such transfer or exchange, and where Bearer Securities may be
delivered in exchange for Bearer Securities or for Registered Securities.
Consistent with applicable laws and regulations, including the provisions of the
federal income tax laws of the United States, such agencies may be the same
agencies as or different agencies from those maintained by the Company pursuant
to Section 4.2(a). The Company hereby appoints the London Office of The Chase
Manhattan Bank, N.A. and Chase Manhattan Bank Luxembourg, S.A., 5 Rue Plaetis,
L-2338 Luxembourg, as Transfer Agents for such transfers and exchanges. The
registration of transfer or exchange of Registered Securities shall only be made
by the Trustee in The City of New York.
(c) The Company will give to the Trustee written notice of the locations
of such offices or agencies and of any change in the locations thereof. If at
any time the Company shall fail to maintain any such offices or agencies or
shall fail to give such notice of the location or of any change in the locations
thereof, presentations, surrenders, notices and demands in respect of Registered
Securities may be made or served at the principal corporate trust office of the
Trustee in The City of New York and in respect of Bearer Securities may be made
or served at the principal office of the
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Trustee in London, England at which at any particular time its corporate trust
business shall be administered.
SECTION 4.3. Corporate Existence.
Subject to Article V hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate or other existence of each of its Significant
Subsidiaries in accordance with the respective organizational documents of each
of them and the rights (charter and statutory) and corporate franchises of the
Company and each of its Significant Subsidiaries; provided, however, that the
Company shall not be required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Significant Subsidiaries, any such
existence, right or franchise, if (a) the Board of Directors of the Company
shall reasonably determine (evidenced by a Board Resolution certified by the
Secretary of the Company and delivered to the Trustee) that the preservation
thereof is no longer desirable in the conduct of the business of such entity and
(b) the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 4.4. Payment of Taxes and Other Claims.
Except with respect to immaterial items, the Company shall, and shall
cause each of its Significant Subsidiaries to, pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Company
or any of its Significant Subsidiaries or any of their respective properties and
assets and (b) all lawful claims, whether for labor, materials, supplies,
services or anything else, which have become due and payable and which by law
have or may become a Lien upon the property and assets of the Company or any of
its Significant Subsidiaries; provided, however, that neither the Company nor
any Significant Subsidiary shall be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which disputed amounts adequate reserves have been
established in accordance with GAAP.
SECTION 4.5. Maintenance of Properties and Insurance.
The Company shall cause all material properties used or useful to the
conduct of its business and the business of each of its Significant Subsidiaries
to be maintained and kept in good condition, repair and working order
(reasonable wear and tear excepted) and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in their reasonable judgment may be
necessary, so that the business carried on in connection therewith may be
properly conducted at all times; provided, however, that nothing in this Section
4.5 shall prevent the Company or any Significant Subsidiary from discontinuing
any operation or maintenance of any of such properties, or disposing of any of
them, if such discontinuance or disposal is (a), in the reasonable judgment of
the Board of Directors of the
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Company (evidenced by a Board Resolution certified by the Secretary of the
Company and delivered to the Trustee), desirable in the conduct of the business
of such entity and (b) not disadvantageous in any material respect to the
Holders.
The Company shall provide, or cause to be provided, for itself and each of
its Significant Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of the Company is adequate and appropriate for the conduct of the business of
the Company and such Significant Subsidiaries in a prudent manner, with (except
for self-insurance) reputable insurers or with the government of the United
States of America or an agency or instrumentality thereof, in such amounts, with
such deductibles, and by such methods as shall be customary, in the reasonable,
good faith opinion of the Company and adequate and appropriate for the conduct
of the business of the Company and such Significant Subsidiaries in a prudent
manner for entities similarly situated in the industry, unless failure to
provide such insurance (together with all other such failures) would not have a
material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries, taken as a whole.
SECTION 4.6. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee within 120 days after the end
of its fiscal year an Officers' Certificate complying with Section 314(a)(4) of
the TIA and stating that a review of its activities and the activities of its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture and further stating, as to each such Officer signing such certificate,
whether or not the signer knows of any failure by the Company or any Significant
Subsidiary of the Company to comply with any conditions or covenants in this
Indenture and, if such signor does know of such a failure to comply, the
certificate shall describe such failure with particularity. The Officers'
Certificate shall also notify the Trustee should the relevant fiscal year end on
any date other than the current fiscal year end date.
(b) The Company shall, so long as any of the Securities are outstanding,
deliver to the Trustee, promptly upon becoming aware of any Default, Event of
Default or fact which would prohibit the making of any payment to or by the
Trustee in respect of the Securities, an Officers' Certificate specifying such
Default, Event of Default or fact and what action the Company is taking or
proposes to take with respect thereto. The Trustee shall not be deemed to have
knowledge of any Default, any Event of Default or any such fact unless one of
its Trust Officers receives written notice thereof from the Company or any of
the Holders.
SECTION 4.7. Reports.
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder identified to the Company within 15 days after it is
or would have been required to file such with the Commission, annual and
quarterly consolidated financial statements substantially equivalent to
financial
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statements that would have been included in reports filed with the Commission if
the Company was subject to the requirements of Section 13 or 15(d) of the
Exchange Act, including, with respect to annual information only, a report
thereon by the Company's certified independent public accountants as such would
be required in such reports to the Commission and, in each case, together with a
management's discussion and analysis of financial condition and results of
operations which would be so required.
SECTION 4.8. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law which would prohibit or forgive the Company from paying all or any
portion of the principal of, premium of, interest on, or Additional Amounts with
respect to, the Securities as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 4.9. Rule 144A Information Requirement.
The Company shall furnish to the Holders or beneficial holders of the
Securities or the underlying Common Stock and prospective purchasers of
Securities or the underlying Common Stock designated by the Holders of
Securities or the underlying Common Stock, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act
until such time as the Securities are no longer "restricted securities" within
the meaning of Rule 144 under the Securities Act.
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ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.
(a) The Company shall not, directly or indirectly, consolidate with or
merge with or into another Person or sell, lease, convey or transfer all or
substantially all of its assets (computed on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person or
group of affiliated Persons, unless (i) either (A) in the case of a merger or
consolidation, the Company is the surviving entity or (B) the resulting,
surviving or transferee entity is a corporation organized under the laws of the
United States, any state thereof or the District of Columbia and expressly
assumes by supplemental indenture all of the obligations of the Company in
connection with the Securities and this Indenture; (ii) no Default or Event of
Default shall exist or shall occur immediately before or after giving effect on
a pro forma basis to such transaction; and (iii) the Company has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and, if a supplemental indenture is
required, such supplemental indenture comply with this Indenture and that all
conditions precedent relating to such transactions have been satisfied.
(b) For purposes of subsection (a) of this Section 5.1, the sale, lease,
conveyance, assignment, transfer, or other disposition of all or substantially
all of the properties and assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.2. Successor Corporation Substituted.
Upon any consolidation or merger or any sale, lease, conveyance or
transfer of all or substantially all of the assets of the Company in accordance
with the foregoing, the successor corporation formed by such consolidation or
into which the Company is merged or to which such sale, lease, conveyance or
transfer 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 therein as the Company, and when
a successor corporation duly assumes all of the obligations of the Company
pursuant hereto and pursuant to the Securities, the predecessor (except in the
case of a lease) shall be released from such obligations (except with respect to
any obligations that arise from or as a result of such transaction).
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) the failure by the Company to pay any installment of interest
on, or Additional Amounts (as described in Section 2 of the Securities)
with respect to, any of the Securities as and when due and payable and the
continuance of any such failure for a period of 30 days after the date
when due;
(b) the failure by the Company to pay all or any part of the
principal, or premium, if any, on the Securities when and as the same
becomes due and payable at maturity or upon redemption, by acceleration or
otherwise;
(c) the failure by the Company to perform any conversion of the
Securities required under this Indenture and the continuance of such
failure for a period of 60 days;
(d) the failure by the Company duly to perform or observe any other
term, covenant or agreement contained in any of the Securities or in this
Indenture for a period of 60 days after the date on which written notice
of such failure, requiring the Company to remedy the same and stating that
such notice is a "Notice of Default" hereunder, shall first have been
given to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in aggregate principal amount of the
Securities at the time outstanding; provided, however, that, in the event
the Company shall within the aforesaid period of 60 days commence legal
action in a court of competent jurisdiction seeking a determination that
the Company had not failed to duly perform or observe the term or terms,
covenant or covenants or agreement or agreements specified in the
aforesaid notice, such failure shall not be an Event of Default unless the
same continues for a period of 10 days after the date of any final
determination to the effect that the Company had failed to duly perform or
observe one or more of such terms, covenants or agreements;
(e) the entry, by a court having jurisdiction in the premises, of a
decree or order for relief in respect of the Company or any Significant
Subsidiary of the Company in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Company or
such subsidiary or for any substantial part of the property of either of
them or ordering the winding-up or
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liquidation of the affairs of its and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
(f) the commencement by the Company or a Significant Subsidiary of
the Company of a voluntary case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect, or its consent to the entry of an order for relief in
an involuntary case under any such law or to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or similar official) of the Company or such subsidiary or
any substantial part of its property, or its making of any general
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts as they become due; or
(g) the Company shall default in the payment of the principal of,
premium, if any, or interest when due on any Indebtedness of the Company
or any of its Significant Subsidiaries that extends beyond any applicable
grace period with respect thereto, or an acceleration so that the same
shall be or become due and payable prior to the date on which the same
would otherwise have become due and payable of any Indebtedness of the
Company or any of its Significant Subsidiaries with an aggregate principal
balance in excess of U.S. $25,000,000, and such failure to pay shall not
have been remedied or cured by the Company or such Significant Subsidiary
or waived by the holders of such Indebtedness.
Notwithstanding the 60-day period and notice requirement contained in
Section 6.1(d) above, with respect to a default under Section 3(d) of the
Securities the 60-day period referred to in Section 6.1(d) shall be deemed to
have begun as of the date the Change of Control notice is required to be sent in
the event that the Company has not complied with the provisions of Section 3 of
the Securities and the Trustee or Holders of at least 25% in principal amount of
the outstanding Securities thereafter give the Notice of Default referred to in
Section 6.1(d) to the Company and, if applicable, the Trustee.
SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment.
If an Event of Default occurs and is continuing, then within five Business
Days after the Company becomes aware of such Event of Default the Company will
provide written notice to the Trustee describing such Event of Default and the
date on which it occurred. The Trustee will give notice of such Event of Default
to the Holders of the Securities within 90 days after its receipt of written
notice thereof from the Company. If an Event of Default occurs and is
continuing, unless the principal of all of the Securities shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of then outstanding Securities, by a notice in
writing to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all of the principal of the Securities,
including in each case accrued interest thereon and Additional Amounts, if any,
with respect thereto, to be due and payable immediately. If an Event of Default
specified in Section 6.1(e) or (f) relating to the Company or any Significant
Subsidiary occurs, all principal, accrued interest thereon and Additional
Amounts, if any, with
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respect thereto will be immediately due and payable on all outstanding
Securities without any declaration or other act on the part of the Trustee or
the Holders.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not less
than a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(a) the Company has paid or deposited with the Trustee Cash sufficient
to pay:
(i) all overdue interest on, and Additional Amounts, if any, with
respect to, all Securities;
(ii) the principal of (and premium, if any, applicable to) any
Securities which would then be due otherwise than by such
declaration of acceleration, and interest thereon at the rate
borne by the Securities;
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest and Additional Amounts, if any,
at the rate borne by the Securities; and
(iv) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default, other than the non-payment of the principal
of, premium, if any, interest on and Additional Amounts, if any,
with respect to Securities that have become due solely by such
declaration of acceleration, have been cured or waived as provided
in Section 6.12 hereof, including, if applicable, any Event of
Default relating to the covenants contained in Section 3(d) of the
Registered Securities and the Bearer Securities.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall
be effective against any Holder for any Event of Default or Default with respect
to any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Security affected thereby, unless all
such affected Holders agree, in writing, to waive such Event of Default or other
event. No such waiver shall cure or waive any subsequent Default or Event of
Default or impair any right consequent thereon.
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
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The Company covenants that if an Event of Default in payment of principal,
premium, interest or Additional Amounts specified in Section 6.1(a) or (b)
occurs and is continuing, the Company shall, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Securities, the whole amount then due
and payable on such Securities for principal, premium (if any), interest,
Additional Amounts and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal (and premium, if any),
Additional Amounts and on any overdue interest, at the rate borne by the
Securities, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including compensation to, and
expenses, disbursements and advances of, the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities 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 the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective 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 6.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, interest or Additional
Amounts) shall be entitled and empowered, by intervention in such proceeding or
otherwise to take any and all actions under the TIA, including:
(a) to file and prove a claim for the whole amount of principal (and
premium, if any), interest and Additional Amounts owing and unpaid in respect of
the Securities and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each
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Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 6.6. Priorities.
Subject to Article XII hereof, any money collected by the Trustee pursuant
to this Article VI 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, premium (if any), interest or Additional Amounts, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to Section
7.7 hereof;
SECOND: To the Holders in payment of the amounts then due and unpaid for
principal of, premium, if any, interest on and Additional Amounts, if any, with
respect to, the Securities in respect or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal, premium, if
any, interest and Additional Amounts, respectively; and
THIRD: To whosoever may be lawfully entitled thereto, the remainder, if
any.
The Trustee may fix a record date and payment date for any payment by it
to Holders pursuant to this Section.
SECTION 6.7. Limitation on Suits.
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No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless: (a) such Holder has previously given written notice to
the Trustee of a continuing Event of Default; (b) the Holders of not less than
25% in principal amount of then outstanding Securities shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder; (c) such Holder or Holders have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities to be incurred or reasonably probable to be incurred in
compliance with such request; (d) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute any such
proceeding; and (e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of then outstanding Securities; it being understood and
intended that no one or more 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 Holders, or to obtain or to seek to
obtain priority or preference over any other Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all the Holders.
SECTION 6.8. Unconditional Right of Holders to Receive Principal, Premium,
Interest and Additional Amounts.
Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of, premium if any, interest on and Additional Amounts,
if any, with respect to, such Security when due (including, in the case of
redemption, the Redemption Price on the applicable Redemption Date) and to
institute suit for the enforcement of any such payment after such respective
dates, and such rights shall not be impaired without the consent of such Holder.
SECTION 6.9. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in Section 2.8 hereof, 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 6.10. Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Security to
exercise any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event of
Default. Every right and remedy given by this Article
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VI 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 6.11. Control by Holders.
The Holder or Holders of no less than a majority in aggregate principal
amount of then outstanding Securities 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 upon the Trustee, provided,
that (a) such direction shall not be in conflict with any rule of law or with
this Indenture, (b) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Holders not taking part in such direction
or would subject the Trustee to any liability, and (c) the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction.
SECTION 6.12. Waiver of Past Default.
Subject to Section 6.8 hereof, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Securities may, on
behalf of all Holders, prior to the declaration of acceleration of the maturity
of the Securities, waive any past default hereunder and its consequences, except
a default (a) in the payment of the principal of, premium, if any, interest on,
or Additional Amounts, if any, with respect to, any Security not yet cured as
specified in Section 6.1(a) or (b), or (b) in respect of a covenant or provision
hereof which, under Article IX hereof, cannot be modified or amended without the
consent of the Holder of each outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair the exercise of any right arising therefrom.
SECTION 6.13. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken 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, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 6.13 shall not apply to any suit instituted
by the Company, 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
aggregate principal amount of then outstanding Securities, or to any suit
instituted by any Holder for enforcement of the payment of principal of, premium
if any, interest on
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or Additional Amounts, if any, with respect to, any Security on or after the
Stated Maturity of such Security (including, in the case of redemption, on or
after the Redemption Date).
SECTION 6.14. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 6.15. Enforcement of Rights of Conversion by Holders.
Anything in this Indenture to the contrary notwithstanding, the Holder of
any Security, without reference to and without the consent of either the Trustee
or the Holder of any other Security, in his own behalf and for his own benefit
may enforce, and may institute and maintain any proceedings suitable to enforce,
his right to convert his Security into Common Stock as provided in Article XIII.
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ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed.
SECTION 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall 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.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no others, and no covenants or
obligations shall be implied in or read into this Indenture
which are adverse to the Trustee.
(ii) In the absence of willful misconduct 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. However, the
Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) This paragraph (c) does not limit the effect of paragraph (b)
of this Section 7.1.
(ii) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.11 hereof.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or to take or omit to take any action under this
Indenture or at the request, order or direction of the
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Holders 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.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets received by
it except as the Trustee may agree in writing with the Company. Assets held in
trust by the Trustee need not be segregated from other assets except to the
extent required by law.
SECTION 7.2. Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate or an Opinion of Counsel, which
shall conform to Sections 14.4 and 14.5 hereof, if applicable. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such certificate or the written advice of counsel.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, 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.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders, pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby.
(g) Unless otherwise specifically provided for in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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(h) The Trustee shall have no duty to inquire as to the performance of the
Company's covenants in Article IV hereof. In addition, the Trustee shall not be
deemed to have knowledge of any Default or Event of Default except (i) any Event
of Default occurring pursuant to Section 6.1(a) or (b), or (ii) any Default or
Event of Default of which a Trust Officer of the Trustee shall have received
written notification from the Company or any Holder or obtained actual
knowledge.
SECTION 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company, any of its
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.4. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities and it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities, other than the Trustee's certificate of
authentication, or the use or application of any funds received by a Paying
Agent other than the Trustee.
SECTION 7.5. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall give to Securityholders in
accordance with Section 14.2 notice of the uncured Default or Event of Default
within 90 days after such Default or Event of Default occurs. Except in the case
of a Default or an Event of Default in payment of principal of, or premium, if
any, interest on or Additional Amounts, if any, with respect to, any Security
(including the payment of the Redemption Price on the Redemption Date), the
Trustee may withhold the notice if and so long as a Trust Officer in good faith
determines that withholding the notice is in the interest of the
Securityholders.
SECTION 7.6. Reports by Trustee to Holders.
Within 60 days after each December 31 beginning with December 31, 1996,
the Trustee shall, if required by Section 313(a) of the TIA, transmit to the
Holders a brief report dated as of such June 30 that complies with Section
313(a) of the TIA. The Trustee also shall comply with Section 313(b) and 313(c)
of the TIA. The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system. A
copy of each report at the time of its mailing to Securityholders shall be
mailed to the Company and filed with the Commission and each stock exchange, if
any, on which the Securities are listed. Reports pursuant to this Section 7.6
shall be transmitted by mail: (a) to all holders of Registered Securities as the
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names and addresses of such Holders appear in the Security Register; and (b) to
other Holders of Securities as have, within the two years preceding such
transmission, filed their names and addresses with the Trustee for such purpose.
SECTION 7.7. Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (with interest on such advances at a rate per annum equal to the
cost to the Trustee of funding the amount paid out) incurred or made by it. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents, accountants, experts and counsel.
The Company agrees to indemnify the Trustee and each of its officers,
directors, attorneys-in-fact and agents for, and hold it harmless against, any
claim, demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel), loss or
liability incurred by it without negligence or willful misconduct on its part,
arising out of or in connection with the administration of this trust and its
rights or duties hereunder including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for which
it may seek indemnity. The Company shall defend the claim and the Trustee shall
provide reasonable cooperation at the Company's expense in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel; provided, that the Company will not be required to
pay such fees and expenses if it assumes the Trustee's defense and in the
Trustee's sole reasonable determination there is no conflict of interest between
the Company and the Trustee in connection with such defense. The Company need
not pay for any settlement made without its written consent. The Company need
not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith or willful
misconduct. To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust prior to any Event of Default to pay principal of, premium, if any, or
interest on, or Additional Amounts, if any, with respect to, particular
Securities. Without limiting any of the rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(e) or (f) hereof occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Company's obligations pursuant to Article VIII of this Indenture and any
rejection or termination of this Indenture under any Bankruptcy Law.
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SECTION 7.8. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing. The Holder
or Holders of a majority in principal amount of then outstanding Securities may
remove the Trustee by so notifying the Company and the Trustee in writing and
may appoint a successor trustee with the Company's consent. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, custodian, or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in principal amount of then outstanding Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that and provided
that all sums owing to the retiring Trustee provided for in Section 7.7 have
been paid, the retiring Trustee shall transfer all property held by it as
trustee to the successor Trustee, subject to the lien provided in Section 7.7,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holder or Holders of at least 10% in principal amount of then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder who
has been a bonafide holder of a Security for at least six months may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.
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SECTION 7.9. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of Section
310(a)(1), (2) and (5) of the TIA. The Trustee shall have a combined capital and
surplus of at least $100,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with Section 310(b) of the
TIA, subject to the penultimate paragraph thereof.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the TIA, excluding any
creditor relationship listed in Section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the TIA to the
extent indicated.
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ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1. Satisfaction and Discharge of Indenture.
If (a) the Company shall deliver to the Trustee for cancellation all
Securities theretofore authenticated other than (1) any Securities which shall
have been lost, destroyed or wrongfully taken and which shall have been replaced
or paid as provided in Section 2.8 or (2) any Securities for the payment of the
principal of which money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 8.2, and not theretofore
canceled, or (b) all the Securities not theretofore canceled or delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds (other than funds repaid by the Trustee to the Company
in accordance with Section 8.2) sufficient to pay at maturity or upon redemption
all of such Securities (other than any Securities which shall have been lost,
destroyed or wrongfully taken and which shall have been replaced or paid as
provided in Section 2.8) not theretofore canceled or delivered to the Trustee
for cancellation, including principal of, premium, if any, and interest due or
to become due to such date of maturity or date fixed for redemption, as the case
may be, and if in either case the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to rights of registration of transfer and
exchange of Securities and rights to receive payments thereon and the other
rights of the holders of Securities, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee, all of which shall survive, and
except that the Company's obligations under this Article, Sections 6.15 and 7.7
and Article XIII shall survive until the Securities are no longer outstanding),
and the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel complying with Sections 14.4 and 14.5 and
at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
theretofore and thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Securities.
SECTION 8.2. Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, for the payment of the principal of, premium, if any, interest on
or Additional Amounts, if any, with respect to any Security and remaining
unclaimed for two years after such principal, premium, if any, interest or
Additional Amounts, if any, has become due and payable shall be paid to the
Company on its written request; and the Holder of such Security shall thereafter
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money shall thereupon cease.
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ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when authorized by Board
Resolutions, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes: (a) to cure any ambiguity, defect, or
inconsistency, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided, that the Company has delivered to the
Trustee an Opinion of Counsel stating that such action pursuant to this
subsection (a) does not adversely affect the interests of any Holder; (b) to
create additional covenants of the Company for the benefit of the Holders, or to
surrender any right or power herein conferred upon the Company or to make any
other change that does not adversely affect the rights of any Holder, provided,
that the Company has delivered to the Trustee an Opinion of Counsel stating that
such change pursuant to this subsection (b) does not adversely affect the rights
of any Holder; (c) to provide for collateral for or guarantors of the
Securities; (d) to evidence the succession of another Person to the Company and
the assumption by any such successor of the obligations of the Company herein
and in the Securities in accordance with Article V; (5) to comply with the TIA;
or (6) to comply with Section 13.6.
SECTION 9.2. Amendments, Supplemental Indentures and Waivers with Consent of
Holders.
Subject to Section 6.8 and the last sentence of this paragraph, with the
consent (evidenced as provided in Section 10.2 hereof) of the Holders of not
less than a majority in aggregate principal amount of then outstanding
Securities, by written act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by Board Resolutions, and the Trustee may
amend or supplement this Indenture or the Securities or 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
the Securities or of modifying in any manner the rights of the Holders under
this Indenture or the Securities. Subject to Section 6.8 and the last sentence
of this paragraph, the Holder or Holders of not less than a majority in
aggregate principal amount of then outstanding Securities may, in writing, waive
compliance by the Company with any provision of this Indenture or the
Securities. Notwithstanding any of the above, however, no such amendment,
supplemental indenture or waiver shall, without the consent of the Holder of
each outstanding Security affected thereby: (a) change the Stated Maturity of
any Security or reduce the principal amount thereof or the rate (or extend the
time for payment) of interest thereon or any premium payable upon the redemption
thereof or Additional Amounts with respect thereto, or change the place of
payment where, or the coin or currency in which, any Security or any premium or
the interest thereon or Additional Amounts, if any, with respect thereto is
payable, or impair the right to institute suit for the enforcement of any such
payment or the conversion of any Security on or after the due date thereof
(including, in the case of redemption, on or after the Redemption Date), or
reduce the Redemption Price, or alter redemption or Change in Control provisions
in a manner
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adverse to the Holders; (b) reduce the percentage in principal amount of the
outstanding Securities, the consent of whose Holders is required for any such
amendment, supplemental indenture or waiver provided for in this Indenture; (c)
modify any of the provisions of Article XII hereof in a manner adverse to the
Holders; (d) adversely affect the right of such Holder to convert Securities; or
(e) modify any of the waiver provisions, except to increase any required
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
Security affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall give to the Holders in accordance with Section 14.2
a notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture or
waiver. After an amendment, supplement or waiver under this Section 9.2 becomes
effective, it shall bind each Holder. In connection with any amendment,
supplement or waiver under this Article IX, the Company may, but shall not be
obligated to, offer to any Holder who consents to such amendment, supplement or
waiver, or (at the option of the Company) to all Holders, consideration for
consent to such amendment, supplement or waiver.
SECTION 9.3. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent Holder
of a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to his Security or portion of his Security by written notice to the Company
or the Person designated by the Company as the Person to whom consents should be
sent if such revocation is received by the Company or such Person before the
date on which the Trustee receives an Officers' Certificate certifying that the
Holders of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. The
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver, which record date shall be the date so fixed by the Company
notwithstanding the provisions of the TIA. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date, and only those Persons (or their
duly designated proxies), shall be
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entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder; provided, that any such waiver shall not impair or affect
the right of any Holder to receive payment of principal of, premium, if any, and
interest on and Additional Amounts, if any, with respect to a Security, on or
after the respective dates set for such amounts to become due and payable
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
SECTION 9.5. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Company may require the Holder of the Security to deliver it to the Trustee or
require the Holder to put an appropriate notation on the Security. The Trustee
may place an appropriate notation on the Security about the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Any failure
to make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment, supplement or waiver.
SECTION 9.6. Trustee to Sign Amendments, Etc.
The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise. The Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of any amendment, supplement or waiver authorized
pursuant to this Article IX is authorized or permitted by this Indenture.
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ARTICLE X
MEETINGS
SECTION 10.1. Meetings and Votes of Holders.
(a) A meeting of Holders of Securities may be called at any time and from
time to time pursuant to this Section 10.1 for any of the following purposes:
(i) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any Default hereunder
and its consequences, or to take any other action authorized to be taken by
Holders of Securities pursuant to Article IX hereof; or (ii) to take any other
action authorized to be taken by or on behalf of the Holders of any specified
aggregate principal amount of the Securities under any other provision of this
Indenture, the Registered Securities and Bearer Securities or under applicable
law.
(b) Meetings of Holders of Securities may be held at such place or places
in The City of New York or London as the Trustee or, in case of its failure to
act, the Company or the Holders calling the meeting shall from time to time
determine.
(c) The Trustee may at any time call a meeting of Holders of Securities to
be held at such time and at such place in any of the locations designated in
Section 10.1(b) hereof as the Trustee shall determine. Notice of every meeting
of Holders shall be made as specified in Section 14.2 hereof, except that such
notice shall set forth the time and the place of such meeting, in general terms
the action proposed to be taken at such meeting and a general description of
regulations applicable to such meeting and shall be published at least three
times in the publications specified in such Section 14.2, the first publication
to be not less than 21 nor more than 180 days prior to the date fixed for the
meeting.
(d) In case at any time the Company or the Holders of at least 25% in
aggregate principal amount of the Securities shall have requested the Trustee to
call a meeting of the Holders, 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 first notice of such meeting within 21 days after receipt of such
request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities in the amount
above specified may determine the time and the place in either of the locations
designated in Section 10.1(b) hereof for such meeting and may call such meeting
to take any action authorized in Section 10.1(a) hereof by giving notice thereof
as provided in Section 10.1(c) hereof.
(e) To be entitled to vote at any meeting of Holders of Securities, a
person shall be (i) a Holder of one or more Securities, or (ii) a person
appointed by an instrument in writing as proxy for a Holder or Holders of
Securities by such Holder or Holders, which proxy need not be a Holder of
Securities. 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
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representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
(f) The persons entitled to vote a majority in principal amount of the
outstanding Securities shall constitute a quorum for the transaction of all
business specified in Section 10.1(a) hereof. No business shall be transacted in
the absence of a quorum unless a quorum is represented when the meeting is
called to order. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request of
the Holders of Securities (as provided in Section 10.1(d) hereof), be dissolved.
In any other case the meeting shall be adjourned for a period of not less than
10 days as determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any adjourned meeting
(except pursuant to Section 10.1(j)) shall be given as provided in Section
10.1(c) hereof except that such notice need be published only once but must be
given not less than five days prior to the date on which the meeting is
scheduled to be reconvened. Subject to the foregoing, at the reconvening of any
meeting adjourned for a lack of a quorum the persons entitled to vote 25% in
principal amount of the Securities shall constitute a quorum for the taking of
any action set forth in the notice of the original meeting. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage of the
aggregate principal amount of the Securities that shall constitute a quorum. At
a meeting or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid, any resolution and all matters (except as limited by
Section 6.8 and the last sentence of the first paragraph of Section 9.2 hereof)
shall be effectively passed and decided if passed or decided by the persons
entitled to vote a majority in principal amount of the Securities represented
and voting at such meeting, provided that such amount shall be not less than 25%
in principal amount of the Securities outstanding. Any Holder of a Security who
has executed an instrument in writing appointing a person as his proxy shall be
deemed to be present for the purposes of determining a quorum and be deemed to
have voted; provided, however, that such Holder shall be considered as present
or voting only with respect to the matters covered by such instrument in
writing. Any resolution passed or decision taken at any meeting of the Holders
of Securities duly held in accordance with this Section 10.1 shall be binding on
all the Holders of Securities whether or not present or represented at the
meeting.
(g) Notwithstanding any other provision of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Bearer Securities shall be
proved by the production of the Bearer Securities or by a certificate executed,
as depositary, by, and the appointment of any proxy shall be proved by having
the signature of the person executing the proxy witnessed or guaranteed by, in
each case, any trust company, bank or banker satisfactory to the Trustee. Such
regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified herein
or other proof. The holding of Registered Securities shall
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be proved by the registry books maintained in accordance with Section 2.3 hereof
or by a certificate or certificates of the Trustee in its capacity as the
Company's agent for the maintenance of such books.
(h) 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 the Holders of Securities as provided in Section 10.1(d) hereof,
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 vote of the Holders of
a majority in principal amount of the Securities represented at the meeting and
entitled to vote.
(i) At any meeting each Holder or proxy shall be entitled to one vote for
each U.S.$1,000 principal amount of Securities held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Securities challenged as not outstanding and ruled by the
chairman of the meeting to be not outstanding. The chairman of the meeting shall
have no right to vote, except as a Holder or proxy.
(j) Any meeting of Holders of Securities duly called pursuant to Section
10.1(c) or 10.1(d) hereof at which a quorum is present may be adjourned from
time to time by vote of the Holders (or proxies for the Holders) of a majority
in principal amount of the Securities represented at the meeting and entitled to
vote; and the meeting may be held as so adjourned without further notice.
(k) The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the serial number or numbers of the Securities 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, at least in
duplicate, of the proceedings of each meeting of Holders of Securities 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 published as provided in Section 10.1(c) or 10.1(d) hereof and, if
applicable, Section 10.1(f) hereof. Each copy shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting, and one
such copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the copy delivered to the Trustee to have attached
thereto the ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
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SECTION 10.2. Action by Holders.
Subject to Section 14.6, whenever in this Indenture it is provided that
the Holders of a specified percentage in aggregate principal amount of the
Securities may take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any other action)
the fact that at the time of taking any such action the Holders of such
specified percentage have joined therein may be evidenced (a) by any instrument
or any number of instruments of similar tenor 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 Section 10.1 hereof, or (c) by a combination
of such instrument or instruments and any such record of such a meeting of
Holders.
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ARTICLE XI
AGENTS
SECTION 11.1. Offices, Resignation, Successors, Etc. of Agents; Paying,
Conversion and Transfer Agencies.
(a) Each of the Agents may at any time resign as such Agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective; provided, however, that
such date shall never be less than 90 days after receipt of such notice by the
Company unless the Company agrees to accept less notice. Each of the Agents
hereunder may be removed at any time by the filing with it of any instrument in
writing signed on behalf of the Company and specifying such removal and the date
when it is intended to become effective. Such resignation or removal shall take
effect upon the date of the appointment by the Company, as hereinafter provided,
of a successor Conversion Agent, Transfer Agent or Paying Agent, as the case may
be, and the acceptance of such appointment by such successor Agent. Upon its
resignation or removal, each of the Agents shall be entitled to the payment by
the Company of its compensation for the services rendered hereunder and to the
reimbursement of all reasonable out-of-pocket expenses incurred in connection
with the services rendered hereunder by such Agent.
(b) In case at any time any of the Agents shall resign, or shall be
removed, or shall be incapable of acting, or shall file a voluntary petition as
a debtor under Chapter 7 or 11 of Title 11 of the United States Code or have an
order for relief entered against it as a debtor under Chapter 7 or 11 of Title
11 of the United States Code or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver of all or any substantial
part of its property, or shall admit in writing its inability to pay or meet its
debts as they mature, or if an order of any court shall be entered approving any
petition filed by or against any of the Agents under any legislation similar to
the provisions of Title 11 of the United States Code, or if a receiver of it or
of all or any substantial part of its property shall be appointed, or if any
public officer shall take charge or control of it or of its property or affairs,
for the purpose of rehabilitation, conservation or liquidation, a successor
Agent, qualified as aforesaid, shall be appointed by the Company by an
instrument in writing. Upon the appointment as aforesaid of a successor Agent
and acceptance by it of such appointment, the Agent so superseded shall cease to
be such Agent hereunder. If no successor Agent shall have been so appointed by
the Company and shall have accepted appointment as hereinafter provided, any
Holder of a Security, on behalf of itself and all others similarly situated, or
any Agent may petition any court of competent jurisdiction for the appointment
of a successor Agent and shall promptly notify the Company of such action.
(c) Any successor Conversion Agent, Transfer Agent or Paying Agent
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and to the Company an instrument accepting such appointment hereunder, and
thereupon such successor Agent, without any further act, deed or conveyance,
shall become vested with all the authority, rights, powers, trusts, immunities,
duties and obligations of such predecessor with like effect as if originally
named as such Agent hereunder, and such predecessor, upon payment of its charges
and disbursements then unpaid,
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shall thereupon become obligated to transfer, deliver and pay over, and such
successor Agent shall be entitled to receive, all monies, securities or other
property on deposit with or held by such predecessor, as such Agent hereunder
and any such predecessor removed pursuant to the second sentence of Section
11.1(a) shall be entitled to repayment of all costs associated with the transfer
and delivery thereof.
(d) Any corporation or bank into which any of the Agents hereunder may be
merged or converted, or any corporation or bank with which such Agent may be
consolidated, or any corporation or bank resulting from any merger, conversion
or consolidation to which such Agent shall be a party, or any corporation or
bank to which such Agent shall sell or otherwise transfer all or substantially
all the corporate agency assets and corporate agency business of such Agent,
shall be the successor to such Agent under this Indenture without the execution
or filing of any document or any further act on the part of any of the parties
hereto.
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ARTICLE XII
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Indebtedness.
The Company and each Holder, by its acceptance of Securities, agree that
(a) the payment of the principal of, premium, if any, interest on, or Additional
Amounts, if any, with respect to, the Securities and (b) any other payment in
respect of the Securities, including on account of the acquisition or redemption
of the Securities by the Company (including, without limitation, pursuant to
Section 3(d) of the Registered Securities and the Bearer Securities) is
subordinated, to the extent and in the manner provided in this Article XII, to
the prior payment in full of all Senior Indebtedness of the Company, and all
other Obligations in respect thereof, whether outstanding at the date of this
Indenture or thereafter created, incurred, assumed or guaranteed, and that these
subordination provisions are for the benefit of the holders of Senior
Indebtedness.
This Article XII shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
To the extent any provision of this Article XII conflicts or is
inconsistent with any other provision of this Indenture, the provisions of this
Article XII shall govern and supersede such inconsistent or conflicting
provision.
SECTION 12.2. No Payment on Securities in Certain Circumstances.
(a) No payment may be made by the Company on account of the principal of,
premium, if any, interest on, or Additional Amounts, if any, with respect to,
the Securities, or to acquire any of the Securities (including redemptions of
Securities at the option of the Holder) for cash or property (other than Junior
Securities), or on account of the redemption provisions of the Securities, (i)
upon the maturity of any Senior Indebtedness of the Company by lapse of time,
acceleration (unless waived) or otherwise, unless and until all principal of,
premium, if any, and interest on such Senior Indebtedness and all other
Obligations in respect thereof are first paid in full (or such payment is duly
provided for), or (ii) in the event of default in the payment of any principal
of, premium, if any, or interest on, or any other Obligation in respect of, any
Senior Indebtedness of the Company when it becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise (a
"Payment Default"), unless and until such Payment Default has been cured or
waived by the holders of such Senior Indebtedness or otherwise has ceased to
exist.
(b) Upon (i) the happening of an event of default (other than a Payment
Default) that permits the holders of any Senior Indebtedness or their
representative immediately to accelerate its maturity and (ii) written notice of
such event of default given to the Company and the Trustee by the requisite
holders of such Senior Indebtedness or their representative (a "Payment
Notice"), then,
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unless and until such event of default has been cured or waived by the requisite
holders of such Senior Indebtedness or otherwise has ceased to exist, no payment
(by set-off or otherwise) may be made by or on behalf of the Company on account
of the principal of, premium, if any, interest on, or Additional Amounts with
respect to, the Securities, or to acquire or repurchase any of the Securities
for cash or property, or on account of the redemption provisions of the
Securities, in any such case other than payments made with Junior Securities of
the Company. Notwithstanding the foregoing, unless (i) the Senior Indebtedness
in respect of which such event of default exists has been declared due and
payable in its entirety within the Payment Blockage Period, and (ii) such
declaration has not been rescinded or waived by the requisite holders of such
Senior Indebtedness, at the end of the Payment Blockage Period, the Company
shall be required to pay all sums not paid to the Holders of the Securities
during the Payment Blockage Period due to the foregoing prohibitions and to
resume, subject to this Article XII, all other payments as and when due on the
Securities. Any number of Payment Notices may be given; provided, however, that
(A) not more than one Payment Notice shall be given within a period of any 360
consecutive days, and (B) no default that existed upon the date of such Payment
Notice or the commencement of such Payment Blockage Period shall be made the
basis for the commencement of any other Payment Blockage Period unless such
default has been cured or waived for a period of not less than 180 consecutive
days.
(c) In furtherance of the provisions of Section 12.1, in the event that,
notwithstanding the foregoing provisions of this Section 12.2, any payment or
distribution of assets of the Company (other than Junior Securities) shall be
received by the Trustee or the Holders or any Paying Agent at a time when such
payment or distribution is prohibited by the provisions of this Section 12.2,
then such payment or distribution shall be received and held in trust by the
Trustee or such Holders or Paying Agent (or, if the Company or any Affiliate of
the Company is acting as its own Paying Agent, money for any such payment or
distribution shall be segregated or held in trust) for the benefit of the
holders of Senior Indebtedness of the Company, and shall be paid or delivered by
the Trustee or such Holders or such Paying Agent, as the case may be, to the
holders of Senior Indebtedness of the Company remaining unpaid or unprovided for
or their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness of the Company may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness of the
Company held or represented by each, for application to the payment of all
Senior Indebtedness of the Company in full after giving effect to any concurrent
payment and distribution to the holders of such Senior Indebtedness, but only to
the extent that as to any holder of such Senior Indebtedness, as promptly as
practical following receipt by such holder of written notice from the Trustee to
the holders of such Senior Indebtedness that such prohibited payment has been
received by the Trustee, Holder(s) or Paying Agent (or has been segregated as
provided above), such holder (or a representative therefor) notifies the Trustee
of the amounts then due and owing on such Senior Indebtedness, if any, held by
such holder and only the amounts specified in such notices to the Trustee shall
be paid to the holders of such Senior Indebtedness.
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SECTION 12.3. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors or any
marshaling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company shall first be
entitled to receive payments in full (or have such payment duly provided for)
before the Holders are entitled to receive any payment on account of the
principal of, premium, if any, interest on, and Additional Amounts, if any, with
respect to, the Securities (other than Junior Securities);
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than Junior
Securities) to which the Holders or the Trustee on behalf of the Holders would
be entitled (by set-off or otherwise), except for the provisions of this Article
XII, shall be paid by the liquidating trustee or agent or other Person making
such a payment or distribution directly to the holders of Senior Indebtedness of
the Company or their representative to the extent necessary to make payment in
full of all such Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than Junior Securities), shall be received by the
Trustee or the Holders or any Paying Agent (or, if the Company or any Affiliate
of the Company is acting as its own Paying Agent, money for any such payment or
distribution shall be segregated or held in trust) on account of the principal
of, premium, if any, interest on, or Additional Amounts, if any, with respect
to, the Securities before all Senior Indebtedness of the Company is paid in
full, such payment or distribution shall be received and held in trust by the
Trustee or such Holder or Paying Agent (or, if the Company or any Affiliate of
the Company is acting as its own Paying Agent, money for any such payment or
distribution shall be segregated or held in trust) for the benefit of the
holders of such Senior Indebtedness, or their respective representative, or the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness of the Company may have been issued,
ratably according to the respective amounts of such Senior Indebtedness held or
represented by each, to the extent necessary to make payment as provided herein
of all such Senior Indebtedness remaining unpaid after giving effect to all
concurrent payments and distributions and all provisions therefor to or for the
holders of such Senior Indebtedness, but only to the extent that as to any
holder of such Senior Indebtedness, as promptly as practical following receipt
by such holder of written notice from the Trustee to the holders of such Senior
Indebtedness that such prohibited payment has been received by the Trustee,
Holder(s) or Paying Agent (or has been segregated as provided above), such
holder (or a representative therefor) notifies the Trustee of the amounts then
due and owing on
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such Senior Indebtedness, if any, held by such holder and only the amounts
specified in such notices to the Trustee shall be paid to the holders of such
Senior Indebtedness.
SECTION 12.4. Securityholders to Be Subrogated to Rights of Holders of Senior
Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the Company
as provided herein, the Holders of Securities shall be subrogated to the rights
of the holders of such Senior Indebtedness to receive payments or distributions
of assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full, and for the purpose of such
subrogation no such payments or distributions to the holders of such Senior
Indebtedness by the Company, or by or on behalf of the Holders by virtue of this
Article XII, which otherwise would have been made to the Holders shall, as
between the Company and the Holders, be deemed to be payment by the Company on
account of such Senior Indebtedness, it being understood that the provisions of
this Article XII are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of such Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under Senior Indebtedness of the Company, then the Holders shall
be entitled to receive from the holders of such Senior Indebtedness any payments
or distributions received by such holders of Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Indebtedness in full.
SECTION 12.5. Obligations of the Company Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture or in
the Securities is intended to or shall impair as between the Company and the
Holders, the obligation of each such Person, which is absolute and
unconditional, to pay to the Holders the principal of, premium, if any, interest
on, and Additional Amounts, if any, with respect to, the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII, of the holders
of Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy. Notwithstanding anything to the
contrary in this Article XII or elsewhere in this Indenture or in the
Securities, upon any distribution of assets of the Company referred to in this
Article XII, the Trustee, subject to the provisions of Sections 7.1 and 7.2, and
the Holders shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior
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Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XII so long as such court has been
apprised of the provisions of, or the order, decree or certificate makes
reference to, the provisions of this Article XII. The Trustee shall be entitled
to rely on the delivery to it of a written notice by a person representing
himself to be a holder of Senior Indebtedness (or a trustee or representative on
behalf of such holder) to establish that such a notice has been given by a
holder of Senior Indebtedness (or a trustee or representative on behalf of such
holder). In the event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XII, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, as to the extent to which such person is entitled to
participate in such payment or distribution, and as to other facts pertinent to
the rights of such person under this Article XII, and if such evidence is not
furnished, the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment. Nothing in
this Article XII shall apply to the claims of, or payments to, the Trustee under
or pursuant to Section 7.7.
SECTION 12.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.
The Trustee or any Paying Agent (other than the Company acting as its own
Paying Agent) shall not at any time be charged with knowledge of the existence
of any facts which would prohibit the making of any payment to or by the Trustee
or such Paying Agent unless and until a Trust Officer of the Trustee or such
Paying Agent (other than the Company acting as its own Paying Agent), as the
case may be, shall have received, no later than one Business Day prior to such
payment, written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any representative therefor and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 7.1 and 7.2, and such Paying Agent shall be entitled in all respects
conclusively to assume that no such fact exists.
SECTION 12.7. Application by Trustee of Assets Deposited with It.
Any deposit of assets with the Trustee or the Agent (whether or not in
trust) for the payment of principal of, premium, if any, interest on, or
Additional Amounts, if any, with respect to, any Securities shall be subject to
the provisions of Sections 12.1, 12.2, 12.3 and 12.4; provided that, if prior to
one Business Day preceding the date on which by the terms of this Indenture any
such assets may become distributable for any purpose (including, without
limitation, the payment of either principal of or interest on any Security) the
Trustee or a Paying Agent shall not have received with respect to such assets
the written notice provided for in Section 12.6, then the Trustee or such Paying
Agent shall have full power and authority to receive such assets and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary which may be received by it on or after such date.
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SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination provisions contained in this Article XII shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may extend, renew,
modify or amend the terms of the Senior Indebtedness or any security therefor
and release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders.
SECTION 12.9. Securityholders Authorize Trustee to Effectuate Subordination of
Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee its attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors of the Company),
the making of a timely filing of a claim for the unpaid balance of its
Securities in the form required in said proceedings and cause said claim to be
approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Indebtedness
or their representative are or is hereby authorized to have the right to file
and are or is hereby authorized to file an appropriate claim for and on behalf
of the Holders of the Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 12.10. Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Indebtedness at any time held by it to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
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SECTION 12.11. Article XII Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium, if any,
interest on, or Additional Amounts, if any, with respect to, the Securities by
reason of any provision of this Article XII shall not be construed as preventing
the occurrence of a Default or an Event of Default under Section 6.1 or in any
way prevent the Holders or the Trustee from exercising any right or remedy
hereunder or at law or in equity other than the right to receive payment on the
Securities in accordance with the terms of this Article XII.
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness, and shall not be liable to any such holders (other than
for its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of Securities or the Company or any other
Person, cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article XII or otherwise. Nothing in this
Section 12.12 shall affect the obligation of any other such Person to hold such
payment for the benefit of, and to pay such payment over to, the holders of
Senior Indebtedness or their representative in accordance with the provisions
hereof.
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ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.1. Conversion Privilege.
Subject to and upon compliance with the provisions of this Article XIII,
at the option of the Holder thereof, any outstanding Registered Security or
Bearer Security or, in the case of any Registered Security or Bearer Security of
a denomination other than $1,000, any portion of the principal amount thereof
which is $1,000 or an integral multiple of $1,000, may be converted on or after
the Exchange Date and prior to the Stated Maturity thereof, at the principal
amount thereof, or of such portion thereof, into fully paid and nonassessable
shares of Common Stock ("Conversion Shares") as set forth in the Registered
Securities and Bearer Securities. The right to convert Securities called for
redemption or delivered for repurchase will terminate at the close of business
on the fifth day next preceding the Redemption Date (or if such date is not a
Business Day, on the next succeeding Business Day) and will be lost if not
exercised prior to that time. The price at which shares of Common Stock shall be
delivered upon conversion (herein called the "Conversion Price") shall be
initially $52.50 per share of Common Stock. The Conversion Price shall be
adjusted in certain instances as provided in paragraphs (c)(i), (ii), (iii),
(iv), (v) and (vi) of Section 4 of the Registered Securities and Bearer
Securities.
SECTION 13.2. Exercise of Conversion Privilege.
(a) In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, together with all
unmatured Coupons, if any, and any matured Coupons in default appertaining
thereto, if any, at the office of the Conversion Agent or any office or agency
of the Company maintained for that purpose pursuant to Section 4.2 hereof,
accompanied by written notice, in substantially the form set forth in the
Registered Securities and the Bearer Securities, to the Company, at such office
or agency that the Holder elects to convert such Security or, if less than the
entire principal amount of a Registered Security or Bearer Security of a
denomination other than $1,000 is to be converted, the portion thereof to be
converted. Upon presentment for conversion of any Securities pursuant to this
Section 13.2, the Conversion Agent shall immediately on that day notify the
Company, the Trustee and the transfer agent with respect to the Common Stock
(initially, The First National Bank of Boston) of such presentment. Such notice
to the Company shall identify the aggregate principal amount of Securities to be
converted and the number of shares of Common Stock to be issued in connection
with such conversion. If less than the full principal amount of the Security or
Securities presented for conversion is requested to be converted or may be
converted, such notice to the Company shall also specify the amount, if any, of
cash to be distributed to the presenter thereof or the aggregate principal
amount of the Security or Securities to remain outstanding upon conversion. No
payment or adjustment shall be made upon any conversion on account of any
dividends on the Common Stock issued upon conversion. If a Registered Security
is converted after the close of business on an Interest Record Date and before
the opening of business on the next succeeding Interest Payment Date, the
interest due on such Interest Payment Date shall be paid on such Interest
Payment Date to the person in whose name that
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Security is registered at the close of business on that Interest Record Date.
Except as otherwise provided in this paragraph, no payment or adjustment shall
be made upon any conversion on account of any interest accrued on the Securities
surrendered for conversion or on account of any dividends or distributions on
the Conversion Shares issued upon conversion. Registered Securities surrendered
for conversion during the period after the close of business on any Interest
Record Date next preceding any Interest Payment Date to the close of business on
such Interest Payment Date shall be accompanied by payment of an amount equal to
the interest payable on such Interest Payment Date on the principal amount being
surrendered for conversion. Upon receipt of such notice, the Company shall take
all necessary actions in connection with the issuance, execution, authentication
and delivery to the Conversion Agent of the requisite number of shares of Common
Stock together with any amounts or replacement Securities representing any
unconverted portion of the Security or Securities presented for conversion, and
to cause the transfer agent with respect to the Common Stock to register the
issuance of the same in the name of the presenter of such Security or Securities
(or its nominee), whereupon the Conversion Agent shall deliver to the presenter
of such Security or Securities such shares of Common Stock, amounts, if any, and
replacement Securities, if any, and concurrently shall cancel the Security or
Securities presented.
(b) Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease (except for the right to
receive the related Conversion Shares), and the person or persons entitled to
receive the Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the Company shall cause
to be issued or delivered at such office or agency a certificate or certificates
for the number of full shares of Common Stock issuable or deliverable upon
conversion, together with payment, in lieu of any fraction of a share, as
provided below.
(c) In the case of any Registered Security or Bearer Security of a
denomination other than $1,000 that is converted in part only, upon such
conversion the Company shall execute and the Trustee or an agent thereof shall
authenticate and deliver to the Conversion Agent, and the Conversion Agent shall
deliver to the Holder thereof, in each case at the expense of the Company, a new
Security or Securities of any authorized kind or denomination as requested by
such Holder, in aggregate principal amount equal to the unconverted portion of
the principal amount of such Security.
SECTION 13.3. Fractional Interests.
No fractional shares of Common Stock shall be issued or delivered upon
conversion of Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable or deliverable upon conversion thereof
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shall be computed on the basis of the aggregate principal amount of the
Securities (or, in the case of Registered Securities or Bearer Securities of a
denomination other than $1,000, specified portions thereof) so surrendered.
Instead of any fractional share of Common Stock which would otherwise be
issuable or deliverable upon conversion of any Security or Securities (or, in
the case of Registered Securities or Bearer Securities of a denomination other
than $1,000, specified portions thereof), the Company shall pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
of the Closing Price per share of Common Stock at the close of business on the
day preceding the day of conversion.
SECTION 13.4. Adjustment of Conversion Price.
Whenever the Conversion Price is adjusted as provided in the Registered
Securities and Bearer Securities:
(a) the Company shall compute the adjusted Conversion Price in
accordance with the terms of the Registered Securities and Bearer
Securities and shall prepare a certificate signed by the
President, any Vice President or the Treasurer of the Company
setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed with the Trustee
and the Conversion Agent and at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section
4.2 hereof; and
(b) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be
required, and, as soon as practicable after it is required, the
Company shall promptly cause a notice setting forth the adjusted
Conversion Price to be given to the Holders of the Securities as
provided in Section 14.2 hereof.
SECTION 13.5. Notice of Certain Events.
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its
retained earnings (excluding dividends payable in stock for which
adjustment is made pursuant to the terms of the Registered
Securities and Bearer Securities);
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights;
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(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of
Common Stock), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of
the Company is required, or of the sale or transfer of all or
substantially all of the assets of the Company;
(d) of the involuntary dissolution, liquidation or winding up of
the Company; or
(e) the Company proposes to take any other action which would require
an adjustment of the Conversion Price pursuant to the Registered
Securities and Bearer Securities;
then the Company shall cause to be filed with the Conversion Agent and at each
office or agency maintained for the purpose of conversion of Securities a notice
setting forth the adjusted Conversion Price and shall cause notice to be given
as provided in Section 14.2 hereof except that notice need be given to the
Holders once at least 20 days (or 10 days in any case specified in subsection
(a) or (b) above) prior to the applicable record date hereinafter specified,
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights or warrants or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants is to be determined, or (y) the
date on which a reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for the securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up. The failure to give
notice required by this Section 13.5 or any defect therein shall not affect the
legality or validity of any dividend, distribution, rights, warrants,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, or the vote on any such action.
SECTION 13.6. Continuation of Conversion Privilege in Case of Reclassification,
Change, Merger, Consolidation or Sale of Assets.
(a) In case of any consolidation with, or merger of the Company into, any
other corporation, or in case of any merger of another corporation into the
Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), or in case of any sale or transfer of all or substantially all of
the assets of the Company, the corporation formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture to this
Indenture providing that the Holder of each Registered Security and Bearer
Security shall have the right during the period such Security shall be
convertible as specified in the Registered Securities and Bearer Securities to
convert such Security only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer by a
holder of the number of shares of Common Stock into which such Security
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might have been converted immediately prior to such consolidation, merger, sale
or transfer assuming such holder of Common Stock failed to exercise any rights
of election as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer, and assuming, if
such consolidation, merger, sale or transfer is prior to the period such
Security shall be convertible, that the Securities were convertible at such time
at the initial Conversion Price as adjusted pursuant to the terms of the
Registered Securities and Bearer Securities. Such amendment shall provide for
adjustments which, for events subsequent to the effective date of such
amendment, shall be as nearly equivalent as may be practicable to the
adjustments provided for in the Registered Securities and the Bearer Securities.
The above provisions of this Section 13.6(a) shall similarly apply to successive
consolidations, mergers, sales or transfers.
(b) Any Common Stock issued upon conversion of a Restricted Security
("Restricted Common Stock") at any time prior to the date which is three years
(or such shorter period as shall be permitted as a result of an amendment to the
rules under the Securities Act in respect thereof) after the Closing Date shall
be subject to the restrictions on transfer set forth in Section 2.6 hereof to
the same extent as the Restricted Securities which were so converted. All shares
of Restricted Common Stock shall bear the legend and transfer requirements set
forth on the form of Registered Security set forth as Exhibit A hereto.
SECTION 13.7. Taxes on Conversion.
The Company will pay any and all documentary, stamp or similar taxes in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant thereto; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issue or delivery of shares of Common Stock in a name other than that of
the Holder of the Securities to be converted and no such issue or delivery shall
be made unless and until the person requesting such issue or delivery has paid
to the Company the amount of any such tax or has established, to the
satisfaction of the Company, that such tax has been paid. The Company extends no
protection with respect to any other taxes imposed in connection with conversion
of Securities.
SECTION 13.8. Company to Provide Common Stock.
The Company shall reserve, free from preemptive rights, out of its
authorized but unissued shares of Common Stock, sufficient shares to provide for
the conversion of the Securities from time to time as such Securities are
presented for conversion, provided, that nothing contained herein shall be
construed to preclude the Company from satisfying its obligations in respect of
the conversion of Securities by delivery of repurchased shares of Common Stock
which are held in the treasury of the Company. If any shares of Common Stock to
be reserved for the purpose of conversion of Securities hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued or delivered upon conversion,
then the Company covenants that it will in good faith and as expeditiously as
possible use its reasonable efforts to secure such registration or approval, as
the case may be, provided, however, that nothing
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in this Section 13.8 shall be deemed to limit in any way the obligations of the
Company provided in this Article XIII. Before taking any action which would
cause an adjustment reducing the Conversion Price below the then par value, if
any, of the Common Stock, the Company will take all corporate action which may,
in the Opinion of Counsel, be necessary in order that the Company may validly
and legally issue fully paid and non-assessable shares of Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Securities will upon issue be fully paid and non-assessable
by the Company and free of preemptive rights.
SECTION 13.9. Disclaimer of Responsibility for Certain Matters.
Neither the Trustee, any agent of the Trustee, the Conversion Agent nor
any agency appointed by the Company shall at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
certificate referred to in Section 13.4 hereof, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed,
or herein or in any supplemental indenture provided to be employed, in making
the same. Neither the Trustee, any agent of the Trustee, the Conversion Agent
nor any agency appointed by the Company shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property (including cash), which may at any time be issued or
delivered upon the conversion of any Security; and neither the Trustee nor the
Conversion Agent or any agency appointed by the Company makes any representation
with respect thereto. Neither the Trustee, any agent of the Trustee, the
Conversion Agent nor any agency appointed by the Company shall be responsible
for any failure of the Company to issue, register the transfer of or deliver any
shares of Common Stock or stock certificates or other securities or property
(including cash) upon the surrender of any Security for the purpose of
conversion or, subject to Article VIII hereof, to comply with any of the
covenants of the Company contained in this Article XIII.
SECTION 13.10. Return of Funds Deposited for Redemption of Converted Securities.
Any funds which at any time shall have been deposited by the Company or on
its behalf with the Trustee or any other Paying Agent for the purpose of paying
the principal of, premium, if any, interest on, or Additional Amounts, if any,
with respect to, any of the Securities and which shall not be required for such
purposes because of the conversion of such Securities, as provided in this
Article XIII, shall after such conversion be repaid to the Company by the
Trustee or such other Paying Agent.
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ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 14.2. Notices.
All notices hereunder shall be deemed to have been given when deposited in
the mail as first class mail, registered or certified, return receipt requested,
postage prepaid, addressed to any party hereto as follows:
The Company: Cityscape Financial Corp.
565 Taxter Road
Elmsford, New York 10523
Attn: Chief Financial Officer
(with a copy to the attention of the General Counsel
at the same address)
Telephone: (914) 592-6677
Facsimile: (914) 592-7101
The Trustee: The Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
3rd Floor
Brooklyn, New York 11245
Attn: Corporate Trust Administration
Telephone: (718) 242-4377
Facsimile: (718) 242-3529
The Paying Agents: The Chase Manhattan Bank, N.A.
Woolgate House
Coleman Street
London EC2P 2HD
ENGLAND
Attn: Corporate Trust Administration
Telephone: 44 1 202-347930
Facsimile: 44 1 202-347945
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Chase Manhattan Bank Luxembourg, S.A.
5 Rue Plaetis
L-2338 Luxembourg
Attn: Manager, Corporate Trust Operations
Telephone: (352) 46-26-85284
Facsimile: (352) 46-26-85380
or at any other address of which any of the foregoing shall have notified the
others in writing. Notices to Holders of the Securities will be given by
publication in an Authorized Newspaper in The City of New York and in London
and, for so long as the Securities are listed on the Luxembourg Stock Exchange,
in Luxembourg, or, if publication in either London or Luxembourg is not
practical, in an Authorized Newspaper directed by the Company in Europe. In
addition, notices to Holders of Registered Securities will be given by
first-class mail to the addresses of such Holders as they appear in the register
maintained by the Trustee on the fifteenth day prior to such mailing. Such
notices will be deemed to have been given on the date of such publication or
mailing or, if published in such newspapers on different dates, on the date of
the first such publication. The Trustee shall promptly furnish to the Company,
the Paying Agent and to each other paying agency of the Company a copy of each
notice so published or mailed.
SECTION 14.3. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to Section 312(b) of the TIA with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of Section 312(c) of the TIA.
SECTION 14.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate (in form reasonably satisfactory to the
Trustee) stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel (in form reasonably satisfactory to the
Trustee) stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 14.5. Statements Required in Certificate or Opinion.
Each certificate or opinion delivered by or on behalf of the Company with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
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<PAGE>
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, 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
(d) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public
officials.
SECTION 14.6. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 14.7. Legal Holidays.
In any case where the date of maturity of the principal of, premium, if
any, interest on or Additional Amounts, if any, with respect to the Securities
or the date fixed for redemption of any Security or the last day on which a
Security may be converted shall be at any place of payment (or such other act) a
day other than a Business Day, then payment of principal, premium, if any,
interest or Additional Amounts, if any, or presentation for conversion, need not
be made on such date at such place but may be made on the next succeeding
Business Day at such place of payment (or such other act), with the same force
and effect as if made on the date of maturity or the date fixed for redemption
or such last day on which a Security may be converted, and no interest shall
accrue for the period after such date.
SECTION 14.8. Taxes.
The Company will pay all stamp taxes and other similar duties, if any,
that may be imposed by the United States of America or the United Kingdom, or
any state or political subdivision thereof or taxing authority therein, with
respect to the execution or delivery of this Indenture, or the issuance of the
Regulation S Global Security, or the exchange from time to time of the
Regulation S Global Security for Registered Securities or Bearer Securities, or
with respect to the issuance or delivery of shares of Common Stock on conversion
of Securities; provided, however, that the Company shall not be required to pay
any tax or duty which may be payable in respect of any transfer involved in the
issuance or delivery of shares of Common Stock in a name other than that of the
Holder of the Security or Securities to be converted, and no such issuance or
delivery shall be made unless and
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<PAGE>
until the person requesting such issuance has paid to the Company the amount of
any such tax or duty or has established to the satisfaction of the Company that
such tax or duty has been paid; and further provided, that the Company shall not
be required to pay any tax or duty that may be payable in respect of any accrued
interest paid in connection with the conversion of the Securities.
SECTION 14.9. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK.
SECTION 14.10. Agent for Service of Process.
As long as any of the Securities or Coupons remain outstanding, the
Company will at all times have an authorized agent in The City of New York, upon
whom process may be served in any legal action or proceeding arising out of or
relating to this Indenture or any Security or any Coupons appertaining thereto.
Service of process upon such agent and written notice of such service mailed or
delivered to the Company shall to the extent permitted by law be deemed in every
respect effective service of process upon the Company in any such legal action
or proceeding. The Company hereby appoints the Trustee as its agent for such
purpose, and covenants and agrees that service of process in any legal action or
proceeding may be made upon it at the office of the Trustee at 4 Chase MetroTech
Center, 3rd Floor, Institutional Trust Administration, Brooklyn, New York 11245,
U.S.A., Attention: Corporate Trust Department (or such other address in The City
of New York, as may be the Principal Corporate Trust Office of the Trustee in
The City of New York), unless and until the Company shall designate another
agent for such purpose by written notice to the Trustee. If the Trustee receives
any such service of process, it shall promptly notify the Company of such
service.
SECTION 14.11. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 14.12. No Recourse Against Others.
No direct or indirect partner, employee, stockholder, director or officer,
as such, past, present or future of the Company or any successor corporation,
shall have any personal liability in respect of the obligations of the Company
under the Securities or this Indenture by reason of his, her or its status as
such partner, stockholder, employee, director or officer. Each Securityholder by
accepting a Security waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Securities.
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<PAGE>
SECTION 14.13. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 14.14. Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
SECTION 14.15. Severability.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 14.16. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the Articles
and the Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 14.17. Qualification of Indenture.
The Company shall qualify this Indenture under the TIA in accordance with
the terms and conditions of the Registration Rights Agreement and shall pay all
reasonable costs and expenses (including attorneys' fees for the Company, the
Trustee and the Managers) incurred in connection therewith, including, but not
limited to, costs and expenses of qualification of this Indenture and the
Securities and printing this Indenture and the Securities. The Trustee shall be
entitled to receive from the Company any such Officers' Certificates, Opinions
of Counsel or other documentation as it may reasonably request in connection
with any such qualification of this Indenture under the TIA.
SECTION 14.18. Registration Rights.
Certain Holders of the Securities are entitled to certain registration
rights with respect to such Securities pursuant to, and subject to the terms of,
the Registration Rights Agreement.
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<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
CITYSCAPE FINANCIAL CORP.,
a Delaware corporation
[Seal] By:
-------------------------------
Name:
Title:
Attest:
THE CHASE MANHATTAN BANK, N.A.,
as Trustee
[Seal] By:
-------------------------------
Name:
Title:
Attest:
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<PAGE>
EXHIBIT A
(FORM OF FACE OF REGISTERED SECURITY)
[Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security 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. Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation (55 Water Street, New
York, New York) ("DTC"), to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
[THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS,
ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE COMPANY THAT:
(I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT;
(II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR
TO THE DATE WHICH IS THREE YEARS (OR SUCH SHORTER PERIOD AS SHALL BE
PERMITTED AS A RESULT OF AN AMENDMENT TO THE RULES UNDER THE
SECURITIES ACT IN RESPECT THEREOF) AFTER THE LATER OF THE DATE OF
ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR
ANY AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") EXCEPT
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<PAGE>
(A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A,
(D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT PURSUANT TO AND IN COMPLIANCE WITH REGULATION S,
(E) IN A TRANSACTION ARRANGED BY A BROKER OR DEALER REGISTERED
UNDER THE UNITED STATES SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE
MEANING OF SUBPARAGRAPHS (A)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT) THAT IS ACQUIRING THIS SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND
(III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS SET
FORTH IN (II) ABOVE. IF ANY RESALE OR OTHER TRANSFER OF THIS
SECURITY IS PROPOSED TO BE MADE PURSUANT TO CLAUSE II(E) ABOVE PRIOR
TO THE DATE WHICH IS THREE YEARS (OR SUCH SHORTER PERIOD AS SHALL BE
PERMITTED AS A RESULT OF AN AMENDMENT TO THE RULES UNDER THE
SECURITIES ACT IN RESPECT THEREOF) AFTER THE DATE OF ORIGINAL
ISSUANCE HEREOF, THE
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<PAGE>
TRANSFEROR SHALL DELIVER A LETTER FROM THE TRANSFEREE CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THIS SECURITY. ANY OFFER, SALE OR OTHER DISPOSITION
PURSUANT TO THE FOREGOING CLAUSES (II)(D), (E) AND (F) IS SUBJECT TO
THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE TRUSTEE TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER
INFORMATION ACCEPTABLE TO THEM IN FORM AND SUBSTANCE. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.]
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<PAGE>
CITYSCAPE FINANCIAL CORP.
(Incorporated in the State of Delaware)
6% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2006
CUSIP No.
U.S.$
Cityscape Financial Corp., a corporation duly incorporated and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to _______________________, or registered assigns, the
principal sum of _____________ United States dollars on May 1, 2006 upon
presentation and surrender hereof and to pay interest thereon, from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for (or from May 7, 1996 if no interest has been paid or duly
provided for in respect of this Security), semiannually in arrears on May 1 and
November 1 in each year (each an "Interest Payment Date"), commencing on
November 1, 1996, at the rate of 6 % per annum until the principal hereof is
paid or made available for payment. Interest hereon shall be calculated on the
basis of a 360-day year comprised of twelve 30-day months. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (as defined on the reverse hereof), be paid
to the person in whose name this Security is registered at the close of business
on the Interest Record Date for such interest payment, which shall be April 15
or October 15 (whether or not a Business Day) next preceding such Interest
Payment Date. To the extent lawful, the Company shall pay interest on overdue
principal and overdue installments of interest at the rate borne by this
Security, compounded semi-annually. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Interest Record Date and,
together with Defaulted Interest relating thereto, may be paid at any time in
any lawful manner, all as more fully provided in the Indenture. Payment of
interest on this Security shall be made by United States dollar check drawn on a
bank in The City of New York and mailed to the person entitled thereto at his
address as it shall appear in the Security Register, or (if arrangements
satisfactory to the Company and the Trustee (as defined on the reverse hereof)
are made) by wire transfer to a United States dollar account maintained by the
payee with a bank in The City of New York; provided, however, that if such
mailing is not possible and no such application shall have been made, payment of
interest shall be made at the Principal Corporate Trust Office of the Trustee
(as defined in the Indenture referred to below), or such other office or agency
of the Company as may be designated for such purpose in The City of New York, in
United States currency.
Reference is hereby made to the further provisions of this Security set
forth under Terms and Conditions of the Securities on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.
This Security shall not become valid or enforceable for any purpose unless
and until the certificate of authentication hereon shall have been manually
signed by a duly authorized officer of the Trustee.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed in its corporate name and under its corporate seal by the manual or
facsimile signature of a duly authorized signatory.
CITYSCAPE FINANCIAL CORP.
Dated:
------------------ By:
-------------------------------------
Name:
Title:
Attest:
---------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within mentioned Indenture.
THE CHASE MANHATTAN BANK, N.A.,
as Trustee
By:
-----------------------------------------
Authorized Officer
Dated:
--------------------------
A-5
<PAGE>
(FORM OF FACE OF BEARER SECURITY)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
CITYSCAPE FINANCIAL CORP.
(Incorporated in the State of Delaware)
6% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2006
No. U.S.$
Cityscape Financial Corp., a corporation duly incorporated and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to bearer upon presentation and surrender of this
Security the principal sum of _____________________________________ United
States dollars on May 1, 2006 upon presentation and surrender hereof and to pay
interest thereon, from May 7, 1996, semiannually in arrears on May 1 and
November 1 in each year (each an "Interest Payment Date"), commencing on
November 1, 1996, at the rate of 6% per annum until the principal hereof is paid
or made available for payment. Interest hereon shall be calculated on the basis
of a 360-day year comprised of twelve 30-day months. To the extent lawful, the
Company shall pay interest on overdue principal and overdue installments of
interest of the rate borne by this Security, compounded semi-annually. Payments
in respect of this Security shall be made by United States dollar check, subject
to any laws or regulations applicable thereto and to the right of the Company
(limited as provided in the Indenture (as defined on the reverse hereof)) to
terminate the appointment of any paying agency, at the London office of The
Chase Manhattan Bank, N.A. located at Woolgate House, Coleman Street, London
EC2P 2HD, England, or Chase Manhattan Bank Luxembourg S.A., 5 Rue Plaetis,
L-2338 Luxembourg, or at such other offices or agencies outside the United
States of America, its territories or its possessions as the Company may
designate, by United States dollar check drawn on a bank in The City of New
York, or (if arrangements satisfactory to the Company and the Trustee (as
defined on the reverse hereof) are made) by wire transfer to a United States
dollar account maintained by the Holder at a bank outside the United States, its
territories and its possessions. Interest on this Security shall be paid only at
an office or agency located outside the United States, its territories or its
possessions and, in the case of interest due on or before maturity, only upon
presentation and surrender at such an office or agency of the interest coupons
hereto attached as they severally mature. No payment on this Security or any
coupon will be made at the Principal Corporate Trust Office of the Trustee (as
defined in the Indenture referred to below) or any other paying agency
maintained by the Company in the United States, nor will any payment be made by
transfer to an account in, or by mail to an address in, the United States,
except as may be permitted by United States tax laws and regulations in effect
at the time of such payment without detriment to the Company. Notwithstanding
the foregoing, payment of this Security and coupons may be made at the office of
the Trustee in The City of New York if full payment at all paying agencies
outside the United States is illegal or effectively precluded by exchange
controls or other similar restrictions.
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<PAGE>
Reference is hereby made to the further provisions of this Security set
forth under Terms and Conditions of the Securities on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.
Neither this Security nor any of the coupons attached hereto shall become
valid or enforceable for any purpose unless and until the certificate of
authentication hereon shall have been manually signed by a duly authorized
officer of the Trustee.
A-7
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed in its corporate name and under its corporate seal by the manual or
facsimile signature of a duly authorized officer and coupons bearing the
facsimile signature of a duly authorized signatory to be annexed hereto.
CITYSCAPE FINANCIAL CORP.
Dated: 5/7/96
-----------------
By: /s/ Robert C. Patent
-------------------------------
Name: Robert C. Patent
Title: Executive Vice President
[CORPORATE SEAL]
Attest:
-------------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned Indenture.
Authenticated By or on Behalf of
THE CHASE MANHATTAN BANK, N.A.,
as Trustee
By: /s/ Rosanna Abueva
-------------------------------
Authorized Officer
Dated: 5/7/96
-----------------
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<PAGE>
(FORM OF FACE OF COUPON ON BEARER SECURITIES)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
CITYSCAPE FINANCIAL CORP.
(Incorporated in the State of Delaware)
6% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2006
No. U.S.$ Due
Unless the Bearer Security to which this coupon appertains shall have been
called for redemption prior to the due date hereof and payment thereof duly
provided for or shall have been converted, Cityscape Financial Corp. (herein
called the "Company") shall, subject to and in accordance with the terms and
conditions of the Bearer Security and the Indenture dated as of May 7, 1996
between the Company and The Chase Manhattan Bank, N.A., as Trustee, pay to the
bearer, on the date set forth herein upon surrender hereof, the amount shown
hereon (together with any Additional Amounts in respect hereof which the Company
may be required to pay according to the terms of said Bearer Security) at the
paying agencies set out on the reverse hereof or at such other places outside
the United States of America, its territories and its possessions as the Company
may determine from time to time, by United States dollar check drawn on a bank
in The City of New York, or (if arrangements satisfactory to the Company and the
Trustee are made) wire transfer to a United States dollar account maintained by
the bearer at a bank outside the United States of America, its territories and
its possessions, being one-half year's interest then payable on said Bearer
Security.
CITYSCAPE FINANCIAL CORP.
By:
------------------------------------
Name:
Title:
Attest:
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<PAGE>
[Reverse of Coupon]
The Chase Manhattan Bank, N.A. Chase Manhattan Bank Luxembourg S.A.
Woolgate House 5 Rue Plaetis
Coleman Street L-2338 Luxembourg
London EC2P 2HD
ENGLAND
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<PAGE>
(FORM OF REVERSE OF REGISTERED AND BEARER SECURITIES)
Terms and Conditions of the Securities
1. General.
(a) This Security is one of a duly authorized issue of securities of the
Company designated as its 6% Convertible Subordinated Debentures due 2006
(herein called the "Securities"), limited in aggregate principal amount up to
U.S.$143,750,000. The Company issued the Securities under an Indenture, dated as
of May 7, 1996 (the "Indenture"), between the Company and The Chase Manhattan
Bank, N.A., as trustee (the "Trustee"). Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the United States Trust Indenture Act of 1939, as
amended, as in effect on the date of the Indenture. The Securities are subject
to all such terms, and Holders of Securities are referred to the Indenture and
said Act for a statement of them. The Securities are general unsecured
obligations of the Company.
(b) The Securities are issuable as bearer securities (the "Bearer
Securities"), with interest Coupons attached, in the denominations of U.S.$1,000
and U.S.$10,000, and as registered securities (the "Registered Securities"),
without coupons, in denominations of U.S.$1,000 and integral multiples thereof.
The Registered Securities, and transfers thereof, shall be registered as
provided in the Indenture. The holder of any Bearer Security or any Coupon and
the registered holder of a Registered Security shall (to the fullest extent
permitted by applicable law) be treated at all times, by all persons and for all
purposes, except as provided in the Indenture, as the absolute owner of such
Security or Coupon, as the case may be, regardless of any notice of ownership,
theft or loss or of any writing thereon.
2. Additional Amounts.
The Company will pay, as additional interest ("Additional Amounts"), to
the Holder of this Security or of any Coupon appertaining hereto who is a United
States Alien (as defined below) such amounts as may be necessary in order that
every net payment of the principal of, premium, if any, and interest on this
Security and any cash payments made in lieu of issuing shares of Common Stock
upon conversion of this Security, after withholding for or on account of any
present or future tax, assessment or other governmental charge imposed upon or
as a result of such payment by the United States or any political subdivision or
taxing authority thereof or therein, will not be less than the interest provided
herein or any Coupon appertaining hereto to be then due and payable; provided,
however, that the foregoing obligation to pay Additional Amounts shall not apply
to any one or more of the following:
(a) any tax, assessment or other governmental charge which would not have
been so imposed but for (i) the existence of any present or former connection
between such Holder (or
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<PAGE>
between a fiduciary, settlor, beneficiary, member or stockholder of, or a person
holding a power over, such Holder, if such Holder is an estate, trust,
partnership or corporation) and the United States, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary, member,
stockholder or person holding a power) being or having been a citizen or
resident or treated as a resident thereof or being or having been engaged in a
trade or business therein or being or having been present therein or having or
having had a permanent establishment therein, (ii) such Holder's present or
former status as a personal holding company, foreign personal holding company,
passive foreign investment company, foreign private foundation or other foreign
tax-exempt entity or controlled foreign corporation for United States federal
income tax purposes or a corporation which accumulates earnings to avoid United
States federal income tax, or (iii) such Holder's status as a bank extending
credit pursuant to a loan agreement entered into in the ordinary course of
business;
(b) any tax, assessment or other governmental charge which would not have
been so imposed but for the presentation by the Holder of this Security or any
Coupon appertaining hereto for payment on a date more than 10 days after the
date on which such payment became due and payable or on the date on which
payment thereof is duly provided, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer or personal or
intangible property tax or any similar tax, assessment or other governmental
charge;
(d) any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or present or former connection with the United States of
the Holder or beneficial owner of this Security or any related Coupon if such
compliance is required by statute, regulation or ruling of the United States or
any political subdivision or taxing authority thereof or therein as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(e) any tax, assessment or other governmental charge which is payable
otherwise than by deduction or withholding from payments of principal of and
premium, if any, or interest on this Security;
(f) any tax, assessment or other governmental charge imposed on interest
received by a person holding, actually or constructively, 10% or more of the
total combined voting power of all classes of stock of the Company entitled to
vote; or
(g) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of, premium, if any,
or interest on any Security or interest on any Coupon appertaining thereto if
such payment can be made without such withholding by any other paying agent;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, premium, if any, or interest on this Security (or cash in lieu of
issuance of shares of Common Stock upon
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<PAGE>
conversion) to a person other than the sole beneficial owner of such payment or
that is a partnership or fiduciary to the extent such beneficial owner, member
of such partnership or beneficiary or settlor with respect to such fiduciary
would not have been entitled to the payment of Additional Amounts had such
beneficial owner, member, beneficiary or settlor been the holder of this
Security or any Coupon appertaining hereto. The term "United States Alien" means
any person who, for United States federal income tax purposes, is (i) a foreign
corporation, (ii) a foreign partnership one or more of the members of which are,
for United States federal income tax purposes, foreign corporations,
non-resident alien individuals or non-resident alien fiduciaries of a foreign
estate or trust, (iii) a non-resident alien individual or (iv) a non-resident
alien fiduciary of a foreign estate or trust, and the term "United States" means
the United States of America (including the several States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction. Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever any
Additional Amounts are to be paid on the Securities, the Company will give
notice to the Trustee, the Paying Agent and any paying agency of the Company,
all as provided in the Indenture.
3. Redemption.
(a) The Company, at its option, may redeem the Securities, in whole or in
part (but if in part, in aggregate principal amounts of no less than $1,000), at
any time or times on and after May 15, 1999, upon notice as hereinafter
prescribed, at a redemption price equal to 103% of their principal amount if
redeemed during the 12-month period commencing May 1, 1999, 102% of their
principal amount if redeemed during the 12-month period commencing May 1, 2000,
101% of their principal amount if redeemed during the 12-month period commencing
May 1, 2001, and 100% of their principal amount if redeemed on or after May 1,
2002, in each case together with accrued and unpaid interest to the date fixed
for redemption. If fewer than all of the then outstanding Securities are to be
redeemed, the Securities to be redeemed will be selected by the Trustee not more
than 75 days prior to the date fixed for redemption, by such method as the
Trustee shall deem fair and appropriate. Provisions of this Security that apply
to Securities called for redemption also apply to portions of Securities called
for redemption. The Trustee shall notify the Company promptly of the Securities
or portions of Securities to be called for redemption.
(b) If, at any time, the Company shall determine that as a result of any
change in or amendment to the laws (or any regulations or rulings promulgated
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, or any amendment to or change
in an official application or interpretation of such laws, regulations or
rulings which change or amendment becomes effective on or after April 26, 1996
the Company has or will become obligated to pay to the holder of any Security or
Coupon Additional Amounts and such obligation cannot be avoided by the Company
taking reasonable measures available to it, then the Company may, at its
election exercised at any time when such conditions continue to exist, redeem
such Securities as a whole but not in part, upon notice as hereinafter
prescribed, at a redemption price equal to 100% of the principal amount,
together with accrued interest, if any, to
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the date fixed for redemption; provided that no such notice of redemption shall
be given earlier than 90 days prior to the earliest date on which the Company
would be obligated to pay such Additional Amounts were a payment in respect of
such Securities then due; and provided further, that at the time such notice is
given, such obligation to pay such Additional Amounts remains in effect. Prior
to any redemption of the Securities pursuant to the preceding paragraph, the
Company shall provide the Trustee with one or more certificates (signed by the
President or any Vice President and the Treasurer or the Secretary) of the
Company on which the Trustee may conclusively rely to the effect that the
Company is entitled to redeem such Securities pursuant to such paragraph and
that the conditions precedent to the right of the Company to redeem such
Securities pursuant to such paragraph have occurred and a written Opinion of
Counsel (who may be an employee of the Company) stating that all legal
conditions precedent to the right of the Company to redeem such Securities
pursuant to such paragraph have occurred.
(c) The Company shall, except as set forth in the next succeeding
paragraph, redeem the Bearer Securities as a whole but not in part, upon notice
as hereinafter prescribed, at 100% of their principal amount, together with
interest accrued and unpaid to the date fixed for redemption, less applicable
withholding taxes, if any, plus any applicable Additional Amounts payable, after
the Company determines, based on a written Opinion of Counsel, that any
certification, identification or information reporting requirement of any
present or future United States law or regulation with regard to the
nationality, residence or identity of a beneficial owner of a Bearer Security or
a Coupon appertaining thereto who is a United States Alien would be applicable
to a payment of principal of or interest on a Bearer Security or a Coupon
appertaining thereto made outside the United States by the Company or a paying
agent (other than a requirement (i) which would not be applicable to a payment
made by the Company or any one of its paying agents (A) directly to the
beneficial owner or (B) to a custodian, nominee or other agent of the beneficial
owner, or (ii) which could be satisfied by the Holder, custodian, nominee or
other agent certifying that the beneficial owner is a United States Alien,
provided, however, in each case referred to in clauses (i)(B) and (ii) payment
by such custodian, nominee or agent of the beneficial owner is not otherwise
subject to any requirement referred to in this sentence). The Company shall make
such determination and will notify the Trustee thereof in writing as soon as
practicable, stating in the notice the effective date of such certification,
identification or information reporting requirement and the dates within which
the redemption shall occur, and the Trustee shall give prompt notice thereof in
accordance with the Indenture. The Company shall determine the Redemption Date
by notice to the Trustee at least 75 days before the Redemption Date, unless
shorter notice is acceptable to the Trustee. Such redemption of the Securities
must take place on such date, not later than one year after the publication of
the initial notice of the Company's determination of the existence of such
certification, identification or information reporting requirement. The Company
shall not so redeem the Bearer Securities, however, if the Company shall, based
on a subsequent event, determine, based on a written Opinion of Counsel (who
shall not be an employee of the Company), not less than 30 days prior to the
date fixed for redemption, that no such payment would be subject to any
requirement described above, in which case the Company shall notify the Trustee,
which shall give prompt notice of that determination in accordance with the
Indenture and any earlier redemption notice shall thereupon be revoked and of no
further effect.
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Notwithstanding the preceding paragraph, if and so long as the
certification, identification or information reporting requirement referred to
in the preceding paragraph would be fully satisfied by payment of United States
withholding, backup withholding or similar taxes, the Company may elect, prior
to the giving of the notice of redemption, to have the provisions of this
paragraph apply in lieu of the provisions of the preceding paragraph. In that
event, the Company will pay such Additional Amounts (without regard to Section 2
hereof) as are necessary in order that, following the effective date of such
requirements, every net payment made outside the United States by the Company or
a paying agent of the principal of and interest on a Bearer Security or a Coupon
appertaining thereto to a Holder who is a United States Alien (without regard to
a certification, identification or information reporting requirement as to the
nationality, residence or identity of such Holder), after deduction for United
States withholding, backup withholding or similar taxes (other than withholding,
backup withholding or similar taxes (i) which would not be applicable in the
circumstances referred to in the parenthetical clauses of the first sentence of
the next preceding paragraph or (ii) are imposed as a result of presentation of
such Bearer Security or Coupon for payment more than 10 days after the date on
which such payment becomes due and payable or on which payment thereof is duly
provided for, whichever is later), will not be less than the amount provided in
the Bearer Security or the Coupon to be then due and payable. If the Company
elects to pay such Additional Amounts and as long as it is obligated to pay such
Additional Amounts, the Company may subsequently redeem the Bearer Securities,
at any time, in whole but not in part, upon not more than 60 days nor less than
30 days notice, given as hereinafter prescribed, at 100% of their principal
amount, plus accrued interest to the date fixed for redemption and Additional
Amounts, if any.
(d) If there shall occur a Change of Control (as defined in the Indenture)
with respect to the Company, then the Holder of this Security shall have the
right, at such Holder's option, exercised in accordance with this Section 3(d),
to require the Company to purchase this Security, in whole but not in part, on
the Holder Redemption Date at a Redemption Price equal to 100% of the principal
amount, together with accrued interest to the Holder Redemption Date.
Notwithstanding the fact that a Security is called for redemption by the
Company otherwise than pursuant to this Section 3(d), each Holder of a Security
desiring to exercise the option for redemption set forth in this Section 3(d)
shall, as a condition to such redemption, on or before the close of business on
the fifth Business Day prior to the Holder Redemption Date, surrender the
Security to be redeemed (together with all unmatured Coupons, if applicable), in
whole but not in part, together with the Redemption Notice hereon duly executed
at the place or places specified in the notice required by Section 3(e) and
otherwise comply with the provisions of Section 3(f). A Holder of a Security who
has tendered a Redemption Notice (i) will be entitled to revoke its election by
delivering a written notice of such revocation together with the Holder's
non-transferable receipt for such Security to the office or agency of the
Company designated as the place for the payment of the Securities to be so
redeemed on or before the Holder Redemption Date and (ii) will retain the right
to convert its Securities into shares of common stock, par value $0.01 per share
("Common Stock") of the Company on or before the close of business on the fifth
day (or if such day is not a Business Day, on the next succeeding Business Day)
next preceding the Holder Redemption Date.
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In connection with any repurchase of Securities pursuant to this Section 3(d),
the Company will comply with any applicable rules and regulations promulgated by
the United States Securities and Exchange Commission and nothing herein,
including the time periods in which redemption is to occur, shall require the
Company to take action which violates such applicable rules and regulations.
(e) Notice of any redemption or notice in connection with a Change of
Control will be given in accordance with Section 3.1 of the Indenture.
(f) If (i) notice of redemption has been given in the manner set forth in
Section 3.1 of the Indenture with respect to Securities to be redeemed at the
option of the Company, or (ii) notice of redemption has been given by the Holder
of a Security to be redeemed pursuant to Section 3(d) hereof, the Securities so
to be redeemed shall become due and payable on the applicable Redemption Date
specified in such notice and upon presentation and surrender of the Securities
at the place or places specified in the notice given by the Company with respect
to such redemption, together in the case of Bearer Securities with all
appurtenant Coupons, if any, maturing subsequent to the Redemption Date, the
Securities shall be paid and redeemed by the Company, at the places and in the
manner and currency herein specified and at the Redemption Price together with
accrued interest, if any, to the Redemption Date; provided, however, that
interest due in respect of Coupons maturing on or prior to the Redemption Date
shall be payable only upon the presentation and surrender of such Coupons (at an
office or agency located outside of the United States of America). If any Bearer
Security surrendered for redemption shall not be accompanied by all appurtenant
Coupons maturing after the Redemption Date, such Security may be paid after
deducting from the amount otherwise payable an amount equal to the face amount
of all such missing Coupons, or the surrender of such missing Coupon or Coupons
may be waived by the Company and the Trustee if they are furnished with such
security or indemnity as they may require to save each of them and each other
paying agency of the Company harmless. From and after the Redemption Date, if
monies for the redemption of Securities shall have been available at the
principal corporate trust office of the Trustee for redemption on the Redemption
Date, the Securities shall cease to bear interest, the Coupons for interest
appertaining to Bearer Securities maturing subsequent to the Redemption Date
shall be void, and the only right of the holders of such Securities shall be to
receive payment of the Redemption Price together with accrued interest to the
Redemption Date. If monies for the redemption of the Securities are not made
available by the Company for payment until after the Redemption Date, the
Securities shall not cease to bear interest until such monies have been so made
available.
4. Conversion.
(a) Subject to and upon compliance with the provisions of the Indenture, a
holder of Securities is entitled, at its option, at any time on and after the
Exchange Date and prior to the close of business on May 1, 2006 to convert such
Security (or any portion of the principal amount thereof which is U.S.$1,000 or
an integral multiple thereof), at the principal amount thereof, or of such
portion, into fully paid and nonassessable shares ("Conversion Shares") of
Common Stock (calculated as to each conversion to the nearest 1/1000 of a share)
at a Conversion Price equal to
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U.S.$52.50 aggregate principal amount of Securities for each Conversion Share
(the "Conversion Price") (or at the current adjusted Conversion Price if an
adjustment has been made as provided herein) by surrender of the Security,
together with (i) if a Bearer Security, all unmatured Coupons and any matured
Coupons in default appertaining thereto, or (ii) if a Registered Security (if so
required by the Company or the Trustee), instruments of transfer in form
satisfactory to the Company and the Trustee, duly executed by the registered
holder or by his duly authorized attorney, and, in either case, (iii) the
Conversion Notice hereon duly executed (x) at the Principal Corporate Trust
Office of the Trustee, or at such other office or agency of the Company as may
be designated by it for such purpose in The City of New York, or (y) subject to
any laws or regulations applicable thereto and subject to the right of the
Company to terminate the appointment of any such conversion agency, at the
London office of The Chase Manhattan Bank, N.A., located at Woolgate House,
Coleman Street, London EC2P 2HD and Chase Manhattan Bank Luxembourg, S.A., 5 Rue
Plaetis, L-2338 Luxembourg, or at such other offices or agencies as the Company
may designate; provided, however, that if any Security or a portion thereof is
called for redemption by the Company, or the holder thereof elects to have such
Security redeemed in whole by the Company pursuant to Section 3(d) hereof, then
in respect of such Security (or, in the case of partial redemption by the
Company, such portion thereof) the right to convert such Security (or, in the
case of partial redemption by the Company, such portion thereof) shall expire
(unless the Company defaults in making the payment due upon redemption) at the
close of business on the fifth day (or if such date is not a Business Day, on
the next succeeding Business Day) next preceding the Redemption Date or the
Holder Redemption Date (unless in the latter case the holder shall have first
revoked his redemption election in accordance with Section 3(d) hereof).
(b) In the case of any Registered Security which is converted after any
Interest Record Date and on or prior to the next succeeding Interest Payment
Date, interest that is payable on such Interest Payment Date shall be payable on
such Interest Payment Date notwithstanding such conversion, and such interest
shall be paid to the person in whose name that Registered Security is registered
at the close of business on such Interest Record Date. Except as otherwise
provided in the immediately preceding sentence and in the parenthetical clause
in Section 4(a)(i) above, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Securities surrendered for
conversion or on account of any dividends or distributions on the Conversion
Shares issued upon conversion. Registered Securities surrendered for conversion
during the period after the close of business on any Interest Record Date next
preceding any Interest Payment Date to the close of business on such Interest
Payment Date shall be accompanied by payment of an amount equal to the interest
payable on such Interest Payment Date on the principal amount being surrendered
for conversion. No fractions of shares or scrip representing fractions of shares
will be issued or delivered on conversion, but instead of any fractional
interest the Company shall pay a cash adjustment as provided in the Indenture.
(c) (i)In case at any time the Company shall pay or make a stock
dividend or other distribution on any class of capital stock of the
Company in shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall
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be reduced so that the same shall equal the price determined by
multiplying such Conversion Price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination and the denominator
shall be the sum of such number of shares and the total number of shares
of Common Stock constituting such dividend or other distribution, such
adjustment to become effective immediately after the opening of business
on the day following the date fixed for such determination; and in the
event that such dividend or other distribution is not so made, or is made
in part, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect (x) if such record date has not been
fixed or (y) based on the actual number of shares actually issued, as the
case may be.
(ii) In case at any time the Company shall (A) subdivide its
outstanding shares of Common Stock into a greater number of shares, (B)
combine its outstanding shares of Common Stock into a smaller number of
shares, or (C) issue by reclassification of its shares of Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation) any shares of
capital stock, the Conversion Price in effect at the effective date of
such subdivision, combination or reclassification shall be proportionately
adjusted so that the holder of any Security surrendered for conversion
after such time shall be entitled to receive the aggregate number and kind
of shares which, if such Security had been converted immediately prior to
such time, he would have owned upon such conversion and been entitled to
receive upon such subdivision, combination or reclassification. Such
adjustment shall become effective immediately after the effective date of
such subdivision, combination or reclassification. Such adjustment shall
be made successively whenever any event listed above shall occur.
(iii) In case at any time the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of its Common
Stock entitling them to subscribe for or purchase Common Stock (or
securities convertible into Common Stock) at a price per share less than
the Current Market Price per share of Common Stock on such record date,
the Conversion Price in effect at the opening of business on the day
following such record date shall be reduced so that the same shall equal
the price determined by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such record date plus the number
of shares of Common Stock (or its equivalent) which the aggregate of the
offering price of the total number of shares so offered for subscription
or purchase would purchase at such Current Market Price per share of
Common Stock and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on such record date plus the
number of shares of Common Stock (or its equivalent) so offered for
subscription or purchase, such reduction to become effective immediately
after the opening of business on the day following such record date;
provided, however, that no adjustment to the Conversion Price shall be
made pursuant to this Section 4(c)(iii) if the holders of Securities
receive, or are entitled to receive upon conversion or otherwise, the same
rights, options or warrants as are issued to the holders of Common Stock,
on the same terms and conditions as such rights,
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options or warrants are so issued to the holders of Common Stock. Such
reduction shall be made successively whenever such a record date is fixed;
and in the event that such rights, options or warrants are not so issued,
or are issued in part, or are issued but all or part of which expire
unexercised, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect (i) if such record date had
not been fixed or (ii) based on the actual number of rights, options or
warrants actually issued, as the case may be.
(iv) In case at any time the Company shall fix a record date for the
making of a distribution, by dividend or otherwise, to all holders of its
shares of Common Stock, of evidences of its indebtedness or assets
(including securities, but excluding (x) any dividend or distribution
referred to in paragraph (i) of this subsection (c) and any rights,
options or warrants referred to in paragraph (iii) of this subsection (c),
and (y) any dividend, return of capital or distribution paid in cash out
of the retained earnings of the Company and regular quarterly dividends
consistent with past practice ), then in each such case the Conversion
Price in effect after such record date shall be determined by multiplying
the Conversion Price in effect immediately prior to such record date by a
fraction, of which the numerator shall be the total number of outstanding
shares of Common Stock multiplied by the Current Market Price per share of
Common Stock on such record date, less the fair market value (as
determined by a Board Resolution, whose determination shall be conclusive
and described in a statement filed with the Trustee) of the portion of the
assets or evidences of indebtedness so to be distributed, and of which the
denominator shall be the total number of outstanding shares of Common
Stock multiplied by such Current Market Price per share of Common Stock.
Such adjustment shall be made successively whenever such a record date is
fixed and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution; and in
the event that such distribution is not so made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in
effect if such record date has not been fixed.
(v)The Company may make such downward adjustments in the Conversion
Price, in addition to those required by paragraphs (i), (ii), (iii) and
(iv) of this section, as it considers to be advisable in order that any
event treated for United States federal income tax purposes as a dividend
of stock or stock rights shall not be taxable to the recipients.
(vi) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least U.S.
$0.25 in such Conversion Price; provided, however, that any adjustment
which by reason of this paragraph (vi) is not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this subsection (c) shall be made to the nearest cent
or to the nearest 1/1000 of a share, as the case may be.
(d) Whenever the Conversion Price is adjusted and in the event of certain
other corporate actions, as herein provided, the Company shall give notice, all
as provided in the Indenture.
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(e) The Company shall use its reasonable efforts to cause all
registrations with, and to obtain any approvals by, any governmental authority
under any federal or state law of the United States that may be required before
the Conversion Shares (or other securities issuable upon conversion of the
Securities) may be lawfully issued or transferred and delivered
5. Transfer and Exchange of Securities.
(a) Title to Bearer Securities and Coupons shall pass by delivery. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of Registered Securities is registrable on the Security Register
upon surrender of a Registered Security for registration of transfer at the
office or agency of the Trustee in The City of New York, or, subject to
applicable laws and regulations, at the office of the paying agency in
Luxembourg, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by,
the holder thereof or his attorney duly authorized in writing, and thereupon one
or more new Registered Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
(b) As provided in the Indenture and subject to certain limitations
therein set forth, Bearer Securities (with all unmatured Coupons appertaining
thereto) are exchangeable at, subject to applicable laws and regulations, the
offices of the paying agencies in London and Luxembourg or as designated by the
Company for such purpose pursuant to the Indenture, for an equal aggregate
principal amount of Registered Securities and/or Bearer Securities of authorized
denominations, and Registered Securities are exchangeable at the principal
corporate trust office of the Trustee in The City of New York or, subject to
applicable laws and regulations, the offices of the paying agencies in London
and Luxembourg or as designated by the Company for such purpose pursuant to the
Indenture, for an equal aggregate principal amount of Registered Securities of
authorized denominations as requested by the Holder surrendering the same.
Registered Securities will not be exchangeable for Bearer Securities. The
Company shall not be required (i) to exchange Bearer Securities for Registered
Securities during the period between the close of business on any Interest
Record Date and the opening of business on the next succeeding Interest Payment
Date, (ii) to exchange any Bearer Security (or portion thereof) for a Registered
Security if the Company shall determine and inform the Trustee in writing that,
as a result thereof, the Company may incur adverse consequences under the
federal income tax laws and regulations (including proposed regulations) of the
United States in effect or proposed at the time of such exchange, or (iii) in
the event of a redemption in part, (A) to register the transfer of Registered
Securities or to exchange Bearer Securities for Registered Securities during a
period of 15 days immediately preceding the date notice is given identifying the
serial numbers of the Securities called for such redemption; (B) to register the
transfer of or exchange any such Registered Securities, or portion thereof,
called for redemption; or (C) to exchange any such Bearer Securities called for
redemption; provided, however, that a Bearer Security called for redemption may
be exchanged for a Registered Security which is simultaneously surrendered, with
written instruction for payment on the Redemption Date, unless the Redemption
Date is during the period between the close of business on any Interest Record
Date and the close of business on the next succeeding Interest Payment Date, in
which case such exchange
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may only be made prior to the close of business on the Interest Record Date
immediately preceding the Redemption Date. The Company also shall not be
required to exchange Securities if, as a result thereof, the Company would incur
adverse consequences under United States federal income tax laws in effect at
the time of such exchange. In the event of redemption or conversion of a
Registered Security in part only, a new Registered Security or Securities for
the unredeemed or unconverted portion hereof will be issued in the name of the
holder thereof.
(c) The costs and expenses of effecting any exchange or registration of
transfer pursuant to the foregoing provisions, except for the expenses of
delivery (if any) by other than regular mail and except, if the Company shall so
require, the payment of a sum sufficient to cover any tax or other governmental
charge or insurance charges that may be imposed in relation thereto, will be
borne by the Company.
(d) The Company has initially appointed the Trustee as registrar, transfer
agent, paying agent and conversion agent acting through the Trustee's principal
corporate trust office in The City of New York and its agents in London. The
Company has also initially appointed The Chase Manhattan Bank Luxembourg, S.A.
as a transfer agent, paying agent and conversion agent. The Company may at any
time terminate the appointment of the registrar and such agents and appoint
additional or other registrars and agents or approve any change in an office
through which the registrar or any agent acts; provided that, until all of the
Securities have been delivered to the Trustee for cancellation, or monies
sufficient to pay the Securities have been made available for payment and either
paid or returned to the Company as provided in the Securities and the Indenture,
the Company will maintain a paying agent and a conversion agent (i) in The City
of New York in the United States for the payment of the principal and interest
on Registered Securities and for the surrender of Securities for conversion or
redemption and (ii) in a European city that, so long as the Securities are
listed on the Luxembourg Stock Exchange and such exchange shall so require,
shall be Luxembourg, for the payment of the principal and interest on Securities
and for the surrender of Securities for conversion or redemption.
6. Meetings of Holders.
A meeting of Holders of Securities may be called at any time and from time
to time in the manner and for the purposes set forth in the Indenture. The
Trustee may at any time call a meeting of Holders of the Securities to be held
at such time and at such place in any of such designated locations as the
Trustee shall determine. Notice of every meeting of Holders shall be made as
specified in the Indenture.
7. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented, and any existing Default or Event of Default or
compliance with any provision may be waived, with the written consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto may
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amend or supplement the Indenture or the Securities to, among other things, cure
any ambiguity, defect or inconsistency, or make any other change that does not
adversely affect the rights of any Holder of a Security.
8. Subordination.
Payment of principal, premium, if any, interest on and Additional Amounts,
if any, with respect to the Securities is subordinated, in the manner and to the
extent set forth in the Indenture, to the prior payment in full of all Senior
Indebtedness.
9. Successors.
Except as otherwise provided in the Indenture, when a successor assumes
all the obligations of its predecessor under the Securities and the Indenture,
the predecessor will be released from those obligations.
10. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization
in which events all principal, accrued interest and Additional Amounts, if any,
with respect to the Securities will be immediately due and payable without any
declaration or other act on the part of the Trustee or the Holders), then in
every such case, unless the principal of all of the Securities shall have
already become due and payable, either the Trustee or the Holders of 25% in
aggregate principal amount of Securities then outstanding may declare all the
Securities to be due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Securities may not enforce the Indenture
or the Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the Securities then outstanding may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of any continuing Default or Event of Default (except a Default in
payment of principal, interest or Additional Amounts), if it determines that
withholding notice is in their interest.
11. No Recourse Against Others.
No stockholder, director, officer or employee, as such, past, present or
future, of the Company or any successor corporation shall have any personal
liability in respect of the obligations of the Company under the Securities or
the Indenture by reason of his, her or its status as such stockholder, director,
officer or employee. Each Holder of a Security by accepting a Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
A-22
<PAGE>
12. Non-Business Days.
In any case where the date of maturity of the principal of, premium, if
any, or interest on (or Additional Amounts, if any, with respect thereto) the
Securities or the date fixed for redemption of any Security shall be at any
place of payment a day other than a Business Day, then payment of principal or
interest (or Additional Amounts, if any) need not be made on such date at such
place but may be made on the next succeeding Business Day at such place of
payment, with the same force and effect as if made on the date of maturity or
the date fixed for redemption, and no interest shall accrue for the period after
such date.
13. Notices.
All notices to the Holders of Securities will be published on a Business
Day in Authorized Newspapers in The City of New York and in London, and, as long
as the Securities are listed on the Luxembourg Stock Exchange, in an Authorized
Newspaper in Luxembourg or, if either publication in London or Luxembourg is not
practical, in an Authorized Newspaper selected by the Company in Western Europe.
Notices shall be deemed to have been given on the date of publication as
aforesaid or, if published on different dates, on the date of the first such
publication. A copy of each notice will be mailed by the Trustee, on behalf of
and at the expense of the Company, by first-class mail to each holder of a
Registered Security at the registered address of such holder as the same shall
appear in the Security Register on the day fifteen days prior to such mailing.
The Trustee shall promptly furnish to the Company, the Paying Agent and to each
other paying agency of the Company a copy of each notice so published or mailed.
14. Governing Law.
(a) The Indenture, this Security and any coupons appertaining hereto shall
be governed by and construed in accordance with the laws of the State of New
York, United States of America, without regard to principles of conflicts of
laws.
(b) The Company has appointed the Trustee as its agent upon whom process
may be served in any legal action or proceeding relating to or arising out of
this Security, the Indenture or any Coupon appertaining hereto.
15. Authentication.
This Security and any Coupon appertaining thereto shall not become valid
or obligatory for any purpose until the certificate of authentication hereon
shall have been duly signed by the Trustee or an authenticating agent acting
under the Indenture.
A-23
<PAGE>
16. Warranty of the Issuer.
Subject to Section 15 hereof, the Company hereby certifies and warrants
that all acts, conditions and things required to be done and performed and to
have happened precedent to the creation and issuance of this Security and any
Coupons appertaining thereto, and to constitute the same legal, valid and
binding obligations of the Company enforceable in accordance with their terms,
have been done and performed and have happened in due and strict compliance with
all applicable laws.
17. Status as United States Real Property Holding Corporation.
To the best of its knowledge, as of the date of the issuance of this
Security, the Company is not a "United States real property holding corporation"
as defined in Section 897(c)(2) of the United States Internal Revenue Code of
1986, as amended (the "Code"). A non-United States person disposing of this
Security may request from the Company a statement as to whether this Security
constitutes a "United States real property interest" (as defined in Code Section
897(c)(1)) as of the date of disposition. It may be necessary to obtain a
statement that this Security does not constitute a "United States real property
interest" prior to the time that a tax return would otherwise be required to be
filed with the United States Internal Revenue Service with respect to such
disposition in order to avoid a withholding tax on such disposition. If, at any
time while this Security is outstanding, the Company determines that it is at
such time a "United States real property holding corporation", it shall provide
notice of such determination in accordance with the provisions of Section 13
hereof. The Holder of this Security can contact the Company at 565 Taxter Road,
Elmsford, New York 10523 to obtain information as to the United States income
tax consequences of the classification of the Company as a "United States real
property holding corporation."
18. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
A-24
<PAGE>
20. Additional Rights of Holders of Restricted Securities.
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Restricted Securities shall have all the rights set forth
in the Registration Rights Agreement.
21. Accounting Terms.
All accounting terms not otherwise defined herein shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
applied in the United States.
22. Descriptive Headings.
The descriptive headings appearing herein are for convenience of reference
only and shall not alter, limit or define the provisions hereof. The Company
will furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement.
Request may be made to:
Cityscape Financial Corp.
565 Taxter Road
Elmsford, New York 10523
Attention: Secretary
A-25
<PAGE>
TRANSFER NOTICE FOR VALUE RECEIVED, the undersigned Holder hereby sell(s),
assign(s) and transfer(s) unto ___________________________ whose taxpayer
identification number is ________________ and whose address including postal/ZIP
code is ___________________________________________________________the within
Security and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________________________________________
_______________________________________attorney-in-fact to transfer said
Security on the books of the Company with full power of substitution in the
premises. Only if a Restricted Security: In connection with the transfer of this
Security, the undersigned certifies that (check one):
| | (a) This Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the United States Securities
Act of 1933, as amended (the "Securities Act")) in compliance with
the exemption from registration under the Securities Act of 1933
provided by Rule 144A thereunder.
| | (b) This Security is being transferred in an Offshore Transaction (as
defined in Regulation S under the Securities Act) in compliance with
the requirements of Rule 904 of Regulation S under the Securities
Act. | |
| | (c) This Security is being transferred in a transaction arranged by a
broker or dealer registered under the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to an
institutional "accredited investor" (within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act) in a
transaction not involving any general solicitation or general
advertising and in connection with which transfer the Company has
received, if it has so requested, an opinion of counsel
(satisfactory to it in form and substance) to the effect that the
transfer is being made pursuant to an exemption from the
registration requirements of the Securities Act.
| | (d) This Security is being transferred to ____________________________.
| | (e) In connection with a transfer, other than those above, as to which
the Company has received an opinion of counsel (satisfactory to it
in form and substance) to the effect that the transfer is being made
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act.
| | (f) This Security is being exchanged for a beneficial interest in the
Rule 144A Global Security and the undersigned is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities
Act).
Dated: Name:
By:
---------------------------
Name:
Title:
A-26
<PAGE>
NOTICE: The signature of the Holder to this assignment must correspond with the
name as written upon the face of the within instrument in every particular,
without enlargement or any change whatsoever.
SIGNATURE GUARANTEED
TO BE COMPLETED BY A BROKER OR DEALER IF (c) ABOVE IS CHECKED: The
undersigned represents and warrants that (i) it is a broker or dealer registered
under Section 15 of the Exchange Act, (ii) each person which will become a
beneficial owner of this Security upon transfer is an institutional investor
which is an "accredited investor" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act); (iii) no general solicitation or general
advertising was made or used by it in connection with the offer and sale of this
Security to such person(s); and (iv) each such person has been notified that
this Security has not been registered under the Securities Act and is subject to
the restrictions on transfer of the Security set forth herein and in the
Indenture.
Dated: By:
IF NONE OF THE FOREGOING BOXES IS CHECKED, THE TRUSTEE SHALL NOT BE
OBLIGATED TO REGISTER THE TRANSFER OF THIS SECURITY UNLESS AND UNTIL THE
CONDITIONS TO ANY SUCH TRANSFER OF REGISTRATION SET FORTH HEREIN, ON THE FACE
HEREOF AND IN THE INDENTURE SHALL HAVE BEEN SATISFIED.
A-27
<PAGE>
CONVERSION NOTICE
If (i) Registered Security of denomination U.S. $1,000 or (ii) Bearer
Security of denomination U.S. $1,000:
The undersigned holder of this Security hereby irrevocably exercises the
option to convert this Security into shares of Common Stock of Cityscape
Financial Corp. in accordance with the terms of this Security and directs that
such shares be registered in the name of and delivered, together with a check in
payment for any fractional share, to the undersigned unless a different name has
been indicated below. If shares are to be registered in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
Dated: -------------------------------------------
Signature
Dated: -------------------------------------------
Signature
MUST BE MEDALLION GUARANTEED IF THE STOCK IS
TO BE ISSUED IN A NAME OTHER THAN THE
REGISTERED HOLDER OF THE SECURITY
If shares or Securities are If only a portion of the Securities in
to be registered in the name of a the name of is to be converted, please
Person other than the holder, indicate:
please print such person's name and
address and, if this is a 1. Principal Amount to be Security,
Restricted Security, complete complete Transfer Notice: converted:
Transfer Notice: U.S.$
2. Kind, amount and denomination of
Securities representing unconverted
principal amount to be issued:
Bearer-U.S.$
Denominations: U.S.$ (U.S. $1,000 or
$10,000)
Registered-U.S.$
Denominations: U.S.$
(U.S. $1,000 or an integral multiple
thereof)
Registered Securities are not
exchangeable for Bearer Securities.
A-28
<PAGE>
REDEMPTION NOTICE UNDER SECTION 3(d)
The undersigned holder of this Security hereby requests and instructs the
Company to redeem this Security in accordance with the terms of Section 3(d) of
this Security and directs that a check in payment of the redemption amount be
delivered to the undersigned unless a different name has been indicated below.
The undersigned understands that this request can be revoked by delivering
written notice to the Paying Agent on or before the Holder Redemption Date,
together with the undersigned's non-transferable receipt for such Security.
Dated:
----------------------------------------------
Signature
MUST BE MEDALLION GUARANTEED IF CHECK IS TO BE
MADE PAYABLE TO A NAME OTHER THAN THE REGISTERED
HOLDER OF THE SECURITY
If a check in payment of the
redemption amount is to be delivered
to a person other than the holder,
please print such person's name and
address:
--------------------------------------------
HOLDER
Please print name and address of holder:
A-29
<PAGE>
[SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES
The following exchanges of a part of this Rule 144A Global Security for
Registered Accredited Investor Securities have been made:
<TABLE>
<CAPTION>
Amount of Principal Amount
Decrease in Amount of Increase of This Global Signature of
Principal Amount in Principal Security Following Authorized Officer
of This Global Amount of This Such Decrease or of Trustee or
Date of Exchange Security Global Security Increase Security Registrar]
- ---------------- ---------------- ------------------ ------------------ -------------------
<S> <C> <C> <C> <C>
</TABLE>
A-30
<PAGE>
EXHIBIT B
(FORM OF REGULATION S GLOBAL SECURITY)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA
(INCLUDING THE STATES AND THE DISTRICT OF COLUMBIA), ITS TERRITORIES, ITS
POSSESSIONS AND OTHER AREAS SUBJECT TO ITS JURISDICTION (THE "UNITED STATES") OR
TO ANY CITIZEN, NATIONAL OR RESIDENT OF THE UNITED STATES OR TO ANY CORPORATION,
PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN OR UNDER THE LAWS OF THE
UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, OR TO ANY ESTATE OR TRUST
THE INCOME OF WHICH IS SUBJECT TO UNITED STATES FEDERAL INCOME TAXATION
REGARDLESS OF ITS SOURCE OR TO ANY OTHER PERSON DEEMED A U.S. PERSON UNDER
REGULATION S UNDER THE SECURITIES ACT ("UNITED STATES PERSONS"), EXCEPT TO
CERTAIN INSTITUTIONAL INVESTORS IN THE UNITED STATES IN TRANSACTIONS NOT
REQUIRED TO BE REGISTERED UNDER THE SECURITIES ACT. ANY UNITED STATES PERSON WHO
HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES
FEDERAL INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j)
AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED. THIS
SECURITY IS A TEMPORARY GLOBAL SECURITY, WITHOUT COUPONS, EXCHANGEABLE FOR
DEFINITIVE BEARER SECURITIES WITH INTEREST COUPONS OR REGISTERED SECURITIES
WITHOUT INTEREST COUPONS. THE RIGHTS ATTACHING TO THIS GLOBAL SECURITY, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE SECURITIES, ARE
AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS GLOBAL SECURITY SHALL BE ENTITLED TO RECEIVE PAYMENT
OF INTEREST HEREON EXCEPT PURSUANT TO THE PROVISIONS HEREOF.
B-1
<PAGE>
CITYSCAPE FINANCIAL CORP.
(Incorporated in the State of Delaware)
6% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2006
TEMPORARY GLOBAL DEBENTURE
Cityscape Financial Corp., a corporation duly incorporated and existing under
the laws of the State of Delaware (the "Company"), for value received, hereby
promises to pay to bearer upon presentation and surrender of this Global
Security the principal sum of $_________________ United States Dollars on May 1,
2006 and to pay interest thereon, from May 7, 1996 semiannually in arrears on
May 1 and November 1 in each year, commencing November 1, 1996, at the rate of
6% per annum, until the principal hereof is paid or made available for payment;
provided, however, that interest on this Global Security shall be payable only
after the issuance of the definitive Securities for which this Global Security
is exchangeable and, in the case of definitive Securities in bearer form, only
upon presentation and surrender (at an office or agency outside the United
States, its territories and its possessions, except as otherwise provided in the
Indenture referred to below) of the interest coupons thereto attached as they
severally mature. This Global Security is one of a duly authorized issue of
Securities of the Company designated as specified in the title hereof, issued
and to be issued under the Indenture dated as of May 7, 1996 (the "Indenture")
between the Company and The Chase Manhattan Bank, N.A., as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture). This
Global Security is a temporary Security and is exchangeable in whole or from
time to time in part without charge upon request of the holder hereof for
definitive Securities in bearer form, with interest coupons attached, or in
registered form, without coupons, of authorized denominations, (a) not earlier
than 40 days after the date hereof and (b) as promptly as practicable following
presentation of each certification called for in the Indenture for such purpose,
that the beneficial owner or owners of this Global Security (or, if such
exchange is only for a part of this Global Security, of such part) are not
United States persons or other Persons who have purchased such Security for
resale to United States persons. Definitive Securities in bearer form to be
delivered in exchange for any part of this Global Security shall be delivered
only outside of the United States, its territories and its possessions. Upon any
exchange of a part of this Global Security for definitive Securities, the
portion of the principal amount hereof so exchanged shall be endorsed by the
Trustee or its agent on the Schedule of Exchanges hereto, and the principal
amount hereof shall be reduced for all purposes by the amount so exchanged.
Until exchanged in full for definitive Securities, this Global Security shall in
all respects be entitled to the same benefits under, and subject to the same
terms and conditions of, the Indenture as definitive Securities authenticated
and delivered thereunder, except that neither the holder hereof nor the
beneficial owners of this Global Security shall be entitled to receive payment
of interest hereon or to convert this Global Security into shares of Common
Stock of the Company or any other security, cash or other property.
THIS GLOBAL SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
B-2
<PAGE>
All terms used in this Global Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture. Unless the
certificate of authentication hereon has been manually executed by an authorized
signatory of the Trustee, this Global Security shall not be entitled to any
benefit under the Indenture or valid or obligatory for any purpose.
IN WITNESS, WHEREOF, the Company has caused this Global Security to be duly
executed in its corporate name by its duly authorized signatory under its
corporate seal.
Dated: 05/07/96 CITYSCAPE FINANCIAL CORP.
----------
By:/s/ Robert C. Patent
------------------------
Robert C. Patent
Executive Vice President
[CORPORATE SEAL]
Attest:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned Indenture.
Authenticated By or on Behalf of
THE CHASE MANHATTAN BANK, N.A.,
as Trustee
By: /s/ Rossanna Abueva
------------------------
Rossanna Abueva
Vice President
B-3
EXHIBIT 4.3
Execution Copy
6% CONVERTIBLE SUBORDINATED NOTES DUE 2006
REGISTRATION RIGHTS AGREEMENT
Dated as of April 26, 1996
by and among
CITYSCAPE FINANCIAL CORP.
as the Company,
and
Persons Listed on Schedule I hereto
This Registration Rights Agreement is made and entered into as of April
26, 1996, by and among Cityscape Financial Corp., a Delaware corporation (the
"Company"), and the parties listed on Schedule I hereto (the "Managers").
This Agreement is made pursuant to the Subscription Agreement, dated April
26, 1996, among the Company and the Managers (the "Subscription Agreement"). In
order to induce the Managers to enter into the Subscription Agreement, the
Company has agreed to provide the registration rights provided for in this
Agreement to the Managers and their respective direct and indirect transferees.
The execution of this Agreement is a condition to the closing of the
transactions contemplated by the Subscription Agreement.
The parties hereby agree as follows:
I. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Accredited Investor Debentures: Debentures initially resold by the
Managers pursuant to the Subscription Agreement to institutional "accredited
investors" (within the meaning of Rule 501(a)(1), (2), (3) or (7) promulgated by
the Commission under the Securities Act) and all Debentures issued upon
registration of transfer of or in exchange for such Debentures.
Advice: As defined in the last paragraph of Section 3 hereof.
Affiliate: As to any specified person shall mean any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
-1-
<PAGE>
"control," when used with respect to any person, means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Registration Rights Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with the terms hereof
Business Day: With respect to any act to be performed hereunder, each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in New York, New York or other applicable place where such
act is to occur are authorized or obligated by applicable law, regulation or
executive order to close.
Closing Date: May 7, 1996, or such other time on the same or such other
date, not later than 5:00 p.m., London time, on the fifth Business Day in London
thereafter, as the Managers and the Company may agree.
Commission: The Securities and Exchange Commission.
Common Stock: Common stock, $0.01 par value per share, of the Company.
Company: Cityscape Financial Corp., a Delaware corporation, and any
successor corporation thereto.
Controlling Person: As defined in Section 5(a) hereof.
Debentures: The $125,000,000 aggregate principal amount (or $143,750,000
aggregate principal amount if the Managers' over-allotment option is exercised)
of 6% Convertible Subordinated Debentures due 2006 of the Company being issued
pursuant to the Indenture.
Effectiveness Period: As defined in Section 2(a) hereof.
Effectiveness Target Date: The 180th day following the Closing Date.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission pursuant thereto.
Filing Date: The 120th day following the Closing Date.
Holder: Each registered holder of any Transfer Restricted Securities.
Indemnified Person: As defined in Section 5(a) hereof
-2-
<PAGE>
Indenture: The Indenture, dated as of May 7, 1996, between the Company and
the Trustee thereunder, pursuant to which the Debentures are being issued, as
amended, modified or supplemented from time to time in accordance with the terms
thereof.
Managers: NatWest Securities Limited, Bear, Stearns & Co. Inc., CIBC Wood
Gundy Securities Corp. and Wasserstein Perella Securities, Inc.
Paying Agent: As defined in the Indenture.
Proceeding: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or, to the knowledge of the person subject thereto,
threatened.
Prospectus: The prospectus included in any Shelf Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the resale of any portion of the Transfer Restricted Securities
covered by such Shelf Registration Statement, and all other amendments and
supplements to any such prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference, if
any, in such prospectus.
Shelf Registration Statement: Any registration statement of the Company
that covers the resale of any of the Transfer Restricted Securities pursuant to
the provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
registration statement.
Rule 144: Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 144A: Rule 144A promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 144A Debentures: Debentures initially resold by the Managers
pursuant to the Subscription Agreement to "qualified institutional buyers" (as
such term is defined in Rule 144A) and all Debentures issued upon registration
of transfer of or in exchange for such Debentures.
Rule 158: Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
-3-
<PAGE>
Rule 174: Rule 174 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 415: Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 424: Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission thereunder.
Special Counsel: The special counsel to the Holders of the Transfer
Restricted Securities, for which the Holders of the Transfer Restricted
Securities will be reimbursed pursuant to Section 4 hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Securities: The Rule 144A Debentures, the Accredited
Investor Debentures and the shares of Common Stock into which the Rule 144A
Debentures and the Accredited Investor Debentures are convertible, upon original
issuance thereof, and at all times subsequent thereto, until, in the case of any
such Rule 144A Debenture, Accredited Investor Debenture or share of Common
Stock, (i) the date on which it has been registered effectively pursuant to the
Securities Act and disposed of in accordance with the Shelf Registration
Statement relating to it, (ii) the date on which either such Debentures or the
shares of Common Stock issued upon conversion of such Debentures are distributed
to the public pursuant to Rule 144 (or any similar provisions then in effect) or
are saleable pursuant to Rule 144(k) promulgated by the Commission pursuant to
the Securities Act or (iii) the date on which it ceases to be outstanding.
Trustee: The Chase Manhattan Bank, N.A., as trustee under the Indenture.
2. Shelf Registration
(a) The Company agrees to file with the Commission as soon as practicable
after the Closing Date, but in no event later than the Filing Date, a Shelf
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Transfer Restricted Securities. The Shelf
Registration Statement shall initially be on Form S-1 under the Securities Act
or another appropriate form permitting registration of such Transfer Restricted
Securities for resale by the Holders in the manner or manners reasonably
designated by them. After the time the Company shall become eligible to use Form
S-3 under the Securities Act, the Company may to the extent not prohibited under
the Securities Act file a post effective amendment to the Shelf
-4-
<PAGE>
Registration Statement on Form S-3 and from and after such amendment's
effectiveness under the Securities Act, the Shelf Registration Statement shall
be on Form S-3 under the Securities Act or another appropriate form permitting
registration of such Transfer Restricted Securities for resale by the Holders in
the manner or manners reasonably designated by them (including, without
limitation, one or more underwritten offerings). The Company shall not permit
any securities other than the Transfer Restricted Securities to be included in
the Shelf Registration Statement. The Company shall use its reasonable efforts,
as described in Section 3, to cause the Shelf Registration Statement to be
declared effective pursuant to the Securities Act as promptly as practicable
following the filing thereof, but in no event later than the Effectiveness
Target Date, and to keep the Shelf Registration Statement continuously effective
under the Securities Act thereafter for the period ending three years after the
Closing Date (except during periods following the filing of a post effective
amendment thereto and prior to the declaration of the effectiveness of such post
effective amendment; provided, the Company shall use its reasonable efforts to
cause any such post effective amendment to be declared effective as soon as
practicable) (subject to extension pursuant to clause (b)), or such shorter
period as may be specified by the Commission in amending Rule 144 or ending when
there cease to be outstanding any Transfer Restricted Securities (the
"Effectiveness Period").
(b) Supplements and Amendments. The Company shall use its reasonable
efforts to keep the Shelf Registration Statement continuously effective (except
during periods following the filing of a post effective amendment thereto and
prior to the declaration of the effectiveness of such post effective amendment;
provided, the Company shall use its reasonable efforts to cause any such post
effective amendment to be declared effective as soon as practicable) by
supplementing and amending the Shelf Registration Statement as required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration Statement if required by the Securities Act or
reasonably requested by the Holders of a majority in aggregate principal amount
of the Transfer Restricted Securities covered by such Shelf Registration
Statement or by any underwriter of such Transfer Restricted Securities; provided
that the Effectiveness Period shall be extended to the extent necessary to
permit dealers to comply with the applicable prospectus delivery requirements of
Rule 174 and as otherwise provided herein.
3. Registration Procedures
In connection with the Company's registration obligations hereunder, the
Company shall effect such registration on the appropriate form available for the
sale of the Transfer Restricted Securities to permit the sale of the Transfer
Restricted Securities in accordance with the method or methods of disposition
thereof specified by the Holders of a majority in aggregate principal amount of
the Transfer Restricted Securities, and pursuant thereto the Company shall as
expeditiously as reasonably possible:
(a) No fewer than five Business Days prior to the initial filing of a
Shelf Registration Statement or Prospectus and no fewer than two Business Days
prior to the filing of any amendment or supplement thereto (other than any
document that would be incorporated or deemed to be incorporated therein by
reference), furnish to the Holders of the Transfer Restricted Securities, their
Special Counsel and the managing underwriters, if any, copies of all such
documents proposed to
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be filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders, their
Special Counsel and such underwriters, if any, and cause the officers and
directors of the Company, counsel to the Company and independent certified
public accountants to the Company to respond to such inquiries as shall be
necessary in connection with such Shelf Registration Statement, in the opinion
of respective counsel to such Holders and such underwriters, to conduct a
reasonable investigation within the meaning of the Securities Act. The Company
shall not file any such Shelf Registration Statement or related Prospectus or
any amendments or supplements thereto to which the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities, their Special
Counsel or the managing underwriters, if any, shall reasonably object on a
timely basis;
(b) Prepare and file with the Commission such amendments, including
post-effective amendments, to each Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement continuously effective for
the Effectiveness Period; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
securities covered by such Shelf Registration Statement during such period in
accordance with the intended methods of disposition by the selling Holders
thereof contemplated hereby and set forth in such Shelf Registration Statement
as so amended or in such Prospectus as so supplemented; provided, however, that
the Company shall not be deemed to have kept a Shelf Registration Statement
effective during the Effectiveness Period if it voluntarily takes or fails to
take any action that results in selling Holders of the Transfer Restricted
Securities covered thereby not being able to sell such Transfer Restricted
Securities pursuant to federal securities laws during that period.
(c) Notify the Holders of the Transfer Restricted Securities to be sold or
their Special Counsel and the managing underwriters, if any, promptly (and in
the case of an event specified by clause (i)(A) of this paragraph in no event
fewer than two Business Days prior to such filing), and (if requested by any
such person), confirm such notice in writing, (i)(A) when a Prospectus or any
Prospectus Supplement or post-effective amendment is proposed to be filed, and
(B) with respect to the Shelf Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission or any other federal or state governmental authority for amendments
or supplements to a Shelf Registration Statement or related Prospectus or for
additional information, (iii) of the issuance by the Commission, any state
securities commission, any other governmental agency or any court of any stop
order, order or injunction suspending or enjoin ing the use or the effectiveness
of a Shelf Registration Statement or the initiation of any proceedings for that
purpose, (iv) if at any time any of the representations and warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated by Section 3(l) hereof cease to be true and correct in all material
respects, (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Transfer Restricted Securities for sale in any jurisdiction, or the
initiation or threat of any proceeding for such purpose, and (vi) of the
happening of any event that makes any statement made in such Shelf Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of
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any changes in such Shelf Registration Statement, Prospectus or documents so
that, in the case of the Shelf Registration Statement, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(d) Use its reasonable efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of any order enjoining or suspending the use or
effectiveness of a Shelf Registration Statement or the lifting of any suspension
of the qualification (or exemption from qualification) of any of the Transfer
Restricted Securities for sale in any jurisdiction, at the earliest practicable
moment;
(e) If requested by the managing underwriters, if any, or any Holders of
Transfer Restricted Securities being sold in connection with such offering, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, or such Holders indicate
relates to them or otherwise reasonably request be included therein, and (ii)
make all required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment; provided, however, that the Company shall not be required to take any
action pursuant to this Section 3(e) that would, in the opinion of counsel for
the Company, violate applicable law;
(f) Furnish to each Holder of the Transfer Restricted Securities, their
Special Counsel and each managing underwriter, if any, without charge, at least
one conformed copy of each Shelf Registration Statement and each amendment
thereto, including financial statements (but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits,
unless requested in writing by such Holder, counsel or managing underwriter);
(g) Deliver to each Holder of the Transfer Restricted Securities, their
Special Counsel, and the underwriters, if any, without charge, as many copies of
the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such persons reasonably request; and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of the Transfer Restricted
Securities and the underwriters, if any, in connection with the offering and
sale of the Transfer Restricted Securities covered by such Prospectus and any
amendment or supplement thereto;
(h) Prior to any public offering of the Transfer Restricted Securities,
use its reasonable efforts to register or qualify or cooperate with the Holders
of the Transfer Restricted Securities to be sold or tendered for, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Transfer Restricted Securities for offer and sale under
the securities or "Blue Sky" laws of such jurisdictions within the United States
as any Holder or underwriter reasonably requests in writing and to cause the
offering of the Transfer Restricted Securities covered by the Shelf Registration
Statement to be
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registered with or approved by such other governmental agencies or authorities
within the United States, except as may be required as a consequence of the
selling Holder's business (in which case the Company will cooperate in all
reasonable respects with the filing of such Shelf Registration Statement
therewith and granting of approvals thereby), as may be necessary to enable the
selling Holders or underwriters to consummate the disposition of such Transfer
Restricted Securities; keep each such registration or qualification (or
exemption therefrom) or approval effective during the period such Shelf
Registration Statement is required to be kept effective and do any and all other
acts necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by the applicable Shelf Registration
Statement; provided, however, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or subject the Company to any
tax in any such jurisdiction where it is not then so subject;
(i) In connection with any sale or transfer of the Transfer Restricted
Securities that will result in such securities no longer being the Transfer
Restricted Securities, cooperate with the Holders and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing the Transfer Restricted Securities to be sold, which certificates
shall not bear any restrictive legends and shall be in a form eligible for
deposit with The Depository Trust Company and to enable such Transfer Restricted
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, or Holders may request at least two Business Days
prior to any sale of the Transfer Restricted Securities;
(j) Upon the occurrence of any event contemplated by Section 3(c)(vi)
hereof, as promptly as practicable, prepare a supplement or amendment,
including, if appropriate, a post-effective amendment, to each Shelf
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, such Prospectus will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(k) Enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and take
all such other reasonable actions in connection therewith (including those
reasonably requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities
being sold) in order to expedite or facilitate the disposition of such Transfer
Restricted Securities, and in such connection, whether or not an underwriting
agreement is entered into and whether or not the registration is an underwritten
registration to: (i) make such representations and warranties to the Holders of
such Transfer Restricted Securities and the underwriters, if any, with respect
to the business of the Company and its subsidiaries (including with respect to
businesses or assets acquired or to be acquired by any of them), and the Shelf
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings,
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and confirm the same if and when requested; (ii) obtain opinions of counsel to
the Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters, if
any, and Special Counsel to the Holders of the Transfer Restricted Securities
being sold), addressed to each selling Holder of the Transfer Restricted
Securities and each of the underwriters, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Special Counsel and
underwriters; (iii) use its reasonable efforts to obtain customary "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company, addressed (where reasonably possible) to each
selling Holder of the Transfer Restricted Securities and each of the
underwriters, if any, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection with
underwritten offerings; (iv) if an underwriting agreement is entered into, the
same shall contain provisions and procedures no less favorable to the Selling
Holders of the Transfer Restricted Securities and the underwriters, if any, than
those set forth in Section 5 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities covered by such Shelf Registration Statement and
the managing underwriters); and (v) deliver such documents and certificates as
may be reasonably requested by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities being sold, their Special Counsel
and the managing underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) of this Section 3(k)
and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company;
(l) Make available for inspection by a representative of the Holders of
the Transfer Restricted Securities being sold, any underwriter participating in
any such disposition of the Transfer Restricted Securities, if any, and any
attorney, consultant or accountant retained by such selling Holders or
underwriter, at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries as they may reasonably request
(including with respect to business and assets acquired or to be acquired to the
extent that such information is available to the Company), and cause the
officers, directors, agents and employees of the Company and its subsidiaries
(including with respect to business and assets acquired or to be acquired to the
extent that such information is available to the Company) to supply all
information in each case reasonably requested by any such representative,
underwriter, attorney, consultant or accountant in connection with such Shelf
Registration Statement, provided, however, that such persons shall first agree
in writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons, unless
(i) disclosure of such information is required by court or administrative order
or is necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any disclosure
requirements pursuant to federal securities laws in connection with the filing
of any Shelf Registration Statement or the use of any prospectus referred to in
this Agreement), (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by any
such person or (iv) such information becomes
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<PAGE>
available to any such person from a source other than the Company or its agents
and such source is not bound by a confidentiality agreement;
(m) Arrange for the appointment, payment and reimbursement of the Trustee
or any successor trustee as trustee under the Indenture and cause the Indenture
to be qualified under the TIA not later than the effective date of the Shelf
Registration Statement relating to the Transfer Restricted Securities; and in
connection therewith, cooperate with the Trustee under the Indenture and the
Holders of the Transfer Restricted Securities to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute, and use its reasonable efforts to cause
such Trustee to execute, all customary documents as may be required to effect
such changes, and all other forms and documents required to be filed with the
Commission to enable the Indenture to be so qualified in a timely manner;
(n) Comply with applicable rules and regulations of the Commission and
make generally available to its security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act), no later than 45
days after the end of any 12-month period (or 90 days after the end of any
12-month period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm commitment or reasonable efforts underwritten offering
and (ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter after the effective date of the Shelf
Registration Statement, which statement shall cover said period, consistent with
the requirements of Rule 158; and
(o) List all Common Stock covered by such Shelf Registration Statement on
the exchange or system, if any, on which the Common Stock of the Company is then
listed.
The Company may require each seller of the Transfer Restricted Securities
as to which any registration is being effected to: (i) furnish to the Company
such information regarding the distribution of such Transfer Restricted
Securities as is required by law to be disclosed in the Shelf Registration
Statement and (ii) provide to the Company a signed writing accepting and
acknowledging its rights and obligations hereunder. The Company may exclude from
such registration the Transfer Restricted Securities of any holder of Transfer
Restricted Securities who unreasonably fails to furnish such information or
signed writing at least 10 business days prior to the effective date of such
Shelf Registration Statement.
If the Shelf Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, the deletion of the
reference to such
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Holder in any amendment or supplement to the Shelf Registration Statement filed
or prepared subsequent to the time that such reference ceases to be required.
Each Holder of the Transfer Restricted Securities agrees by acquisition of
such Transfer Restricted Securities that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(c)(ii),
3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) hereof, such Holder will forthwith
discontinue disposition of such Transfer Restricted Securities covered by such
Shelf Registration Statement or Prospectus until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3(i)
hereof, or until it is advised in writing (the "Advice") by the Company that the
use of the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus.
The registration rights of the Holders pursuant to this Agreement and the
ability to offer and sell Transfer Restricted Securities pursuant to the Shelf
Registration Statement are subject to the conditions and limitations contained
in this paragraph, and each Holder will be deemed to have agreed with the
Company that if the Board of Directors of the Company determines in its good
faith judgment, as evidenced by a resolution of the Board of Directors, that the
use of any Prospectus would require the disclosure of material information that
the Company has a bona fide business purpose for preserving as confidential or
the disclosure of which would impede the Company's ability to consummate a
significant transaction, and that the Company is not otherwise required by
applicable securities laws or regulations to disclose, upon written notice of
such determination by the Company, the rights of the Holders to offer, sell or
distribute any Transfer Restricted Securities pursuant to the Shelf Registration
Statement or to require the Company to take action with respect to the
registration or sale of any Transfer Restricted Securities pursuant to the Shelf
Registration Statement shall be suspended until the date upon which the Company
notifies the Holders in writing that suspension of such rights for the grounds
set forth in this paragraph is no longer necessary, and the Company agrees to
give such notice as promptly as practicable following the date that such
suspension of rights is no longer necessary (but in any event, any such
suspension shall be effective for a period not in excess of 60 consecutive days
and for no more than 150 days in any calendar year provided, however, such 60
day period may upon notice to the Holders, be extended for up to an additional
30 days if such additional time is reasonably necessary to complete financial
statements or reports or other disclosure materials reasonably necessary to be
disclosed in the Shelf Registration Statement).
4. Registration Expenses
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by it whether or not the Shelf
Registration Statement is filed or becomes effective and whether or not any
securities are issued or sold pursuant to any Shelf Registration Statement. The
fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
National Association of Securities Dealers, Inc. and (B) in compliance with
securities or "Blue Sky" laws (including, without limitation and in
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addition to that provided for in (b) below, fees and disbursements of counsel
for the underwriters or Special Counsel for the Holders in connection with "Blue
Sky" qualifications of the Transfer Restricted Securities and determination of
the eligibility of the Transfer Restricted Securities for investment under the
laws of such jurisdictions as the managing underwriters, if any, or Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Transfer Restricted Securities in a form eligible for
deposit with The Depository Trust Company and of printing Prospectuses if the
printing of Prospectuses is requested by the managing underwriters, if any, or
by the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities included in or tendered for in connection with any
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and Special Counsel for the
Holders (plus any local counsel, deemed appropriate by the Holders of a majority
in aggregate principal amount of the Transfer Restricted Securities), in
accordance with the provisions of Section 4(b) hereof; provided, the Company
shall not be obligated to pay the fees and disbursements of the Special Counsel
for the Holders if such counsel is other than the counsel to the Managers in
connection with the Subscription Agreement, (v) fees and disbursements of the
independent certified public accountants referred to in Section 3(k)(iii)
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (vi) Securities
Act liability insurance, if the Company desires such insurance, and (vii) fees
and expenses of all other persons retained by the Company. In addition, the
Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, and the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange. Notwithstanding the foregoing or anything in this
Agreement to the contrary, each Holder shall pay all underwriting discounts and
commissions of any underwriters or broker-dealers with respect to any Transfer
Restricted Securities sold by it.
(b) In connection with any registration hereunder, the Company shall
reimburse the Holders of the Transfer Restricted Securities being registered or
tendered for in such registration for the reasonable fees and disbursements of
not more than one firm of attorneys representing the Selling Holders (in
addition to any local counsel), which firm shall be chosen by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities
provided, however, that the Company shall have no such reimbursement obligation
if such firm of attorneys is other than the firm of attorneys that represented
the Managers in connection with the Subscription Agreement.
5. Indemnification
(a) The Company agrees to indemnify and hold harmless (i) each of the
Managers, (ii) each Holder of the Transfer Restricted Securities, (iii) each
person, if any, who controls (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) any of the foregoing (any of the persons
referred to in this clause (iii) being hereinafter referred to as a "controlling
person"), and (iv) the respective officers, directors, partners, employees,
representatives and agents of the Managers, each Holder of the Transfer
Restricted Securities, or any controlling person (any person referred to in
clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an
"Indemnified
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Person"), from and against any and all losses, claims, damages, liabilities and
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement, Prospectus or form
of Prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the case of any Prospectus or form of Prospectus or
supplement thereto, in the light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Indemnified Person furnished in writing to the Company by or on behalf of such
Indemnified Person expressly for use therein; provided that the foregoing
indemnity with respect to any preliminary Prospectus shall not inure to the
benefit of any Indemnified Person from whom the person asserting such losses,
claims, damages, liabilities and judgments purchased securities if such untrue
statement or omission or alleged untrue statement or omission made in such
preliminary Prospectus is eliminated or remedied in the Prospectus and a copy of
the Prospectus shall not have been furnished to such person in a timely manner
provided such failure is not as a result of an action or inaction on the part of
the Indemnifying Person.
(b) In case any action shall be brought against any Indemnified Person,
based upon the Shelf Registration Statement or any such Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company, such Indemnified Person shall promptly notify the
Company in writing and the Company shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person and
payment of all fees and expenses. Any Indemnified Person shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person, unless (i) the employment of such counsel shall have
been specifically authorized in writing by the Company, (ii) the Company shall,
have failed to assume the defense and employ counsel for the Indemnified Parties
or (iii) the named parties to any such action (including any impleaded parties)
include both such Indemnified Person and the Company and such Indemnified Person
shall have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Company (in which case the Company shall not have the right to assume the
defense of such action on behalf of such Indemnified Person), provided, however,
that the Company shall not, in connection with any such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such Indemnified Persons, which firm shall be designated in
writing by such Indemnified Persons; and provided, further, that all such fees
and expenses shall be reimbursed as they are incurred). The Company shall not be
liable for any settlement of any such action effected without its written
consent but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Indemnified Person from and against
any loss or liability by reason of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such
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indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(c) In connection with the Shelf Registration Statement in which a Holder
of the Transfer Restricted Securities is participating, such Holder of the
Transfer Restricted Securities agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers and any person
controlling the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (and, in the case of an underwriter
registration, the underwriters and their respective directors, officers and
persons controlling such underwriters within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) , to the same extent as the
foregoing indemnity from the Company to each Indemnified Person but only with
reference to information relating to such Indemnified Person furnished in
writing by or on behalf of such Indemnified Person expressly for use in such
Shelf Registration Statement. In case any action shall be brought against the
Company, any of its directors, any such officer or any person controlling the
Company based on such Shelf Registration Statement and in respect of which
indemnity may be sought against any Indemnified Person, the Indemnified Person
shall have the rights and duties given to the Company (except that if the
Company shall have assumed the defense thereof, such Indemnified Person shall
not be required to do so, but may employ separate counsel therein and
participate in defense thereof but the fees and expenses of such counsel shall
be at the expense of such Indemnified Person), and the Company, its directors,
any such officers and any person controlling the Company shall have the rights
and duties specified for Indemnified Persons, in Section 5(b) hereof.
(d) If the indemnification provided for in this Section 5 is unavailable
to an indemnified party in respect of any losses, claims, damages, liabilities
or judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claim, damages,
liabilities and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and each
Indemnified Person on the other hand from the offering of the Transfer
Restricted Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and each such Indemnified Person in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits to the Company and each such Indemnified
Person shall be determined by reference to, among other things, the proceeds to
the Company from the sale to the selling Holders of the related Transfer
Restricted Securities and the proceeds realized on the sale of Transfer
Restricted Securities by such Indemnified Person or the related selling Holder,
as the case may be, less the purchase price paid for the related Transfer
Restricted Securities and the reasonable expenses (including, but not limited
to, underwriting fees or discounts, brokerage fees or commissions) incurred in
connection with the resale of Transfer Restricted Securities by such Indemnified
Person or related selling Holder, as the case may be. The relative fault of the
Company and each such Indemnified Person shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the
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Company or such Indemnified Person and the parties' relative intent, knowledge,
access to infor mation and opportunity to correct or prevent such statement or
omission.
The Company and the selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation (even if the Indemnified Persons were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Indemnified Person shall be
required to contribute any amount in excess of the amount by which the total net
profit received by it in connection with the sale of the Transfer Restricted
Securities pursuant to this Agreement exceeds the amount of any damages which
such Indemnified Person has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Indemnified Persons'
obligations to contribute pursuant to this Section 5(d) are several in
proportion to the respective amount of Transfer Restricted Securities included
in any such Shelf Registration Statement by each Indemnified Person and not
joint.
6. Rules 144 and 144A
The Company shall use its reasonable efforts to file the reports required
to be filed by it under the Securities Act and the Exchange Act in a timely
manner and, if at any time it is not required to file such reports but in the
past had been required to or did file such reports, it will, upon the request of
any Holder of the Transfer Restricted Securities, make available other
information as required by, and so long as necessary to permit, sales of its
Transfer Restricted Securities pursuant to Rule 144 and Rule 144A.
Notwithstanding the foregoing, nothing in this Section 6 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
7. Miscellaneous
(a) Remedies. In the event of a breach by the Company, or by a Holder of
the Transfer Restricted Securities, of any of their obligations under this
Agreement, each Holder of the Transfer Restricted Securities or the Company, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company and each Holder of the Transfer Restricted
Securities agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
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<PAGE>
(b) No Piggyback on Registrations. After the date hereof, the Company
shall not grant to any of its security holders (other than the Holders of the
Transfer Restricted Securities in such capacity and pursuant to the Registration
Rights Agreement referred to in clause 8(b) above) the right to include any of
its securities in any Shelf Registration Statement other than Transfer
Restricted Securities.
(c) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not bee amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, without the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Transfer Restricted Securities on a
fully converted basis; provided, however, that, for the purposes of this
Agreement, Transfer Restricted Securities that are owned, directly or
indirectly, by either the Company or an Affiliate of the Company are not deemed
outstanding. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of the Transfer Restricted Securities whose securities are
being sold pursuant to a Shelf Registration Statement and that does not directly
or indirectly affect the rights of other Holders of the Transfer Restricted
Securities may be given by Holders of a majority of the Transfer Restricted
Securities (on a fully converted basis) being sold by such Holders pursuant to
such Shelf Registration Statement; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or telecopy:
(i) if to the Company, as provided in the Subscription Agreement,
(ii) if to the Managers, as provided in the Subscription Agreement, or
(iii) if to any other person who is then the registered Holder of any
Transfer Restricted Securities, to the address of such Holder as it
appears in the Debenture or Common Stock register of the Company.
Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when (v) delivered by hand, if
personally delivered, (w) one Business Day after being timely delivered to a
next-day air courier, (x) five Business Days after being deposited in the mail,
postage prepaid, if mailed, (y) when answered back, if telexed or (z) when
receipt is acknowledged by the recipient's telecopier machine, if telecopied.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
and shall inure to the benefit of each Holder of the Transfer Restricted
Securities. The Company may not assign its rights or obligations hereunder
without the prior written consent of each Holder of the Transfer Restricted
Securities.
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<PAGE>
Notwithstanding the foregoing, no transferee shall have any of the rights
granted under this Agreement until such transferee shall acknowledge its rights
and obligations hereunder by a signed written statement of such transferee's
acceptance of such rights and obligations.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, as applied to contracts made
and performed within the State of New York without regard to principles of
conflicts of law.
(h) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the hereof. All
references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(j) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover its reasonable attorneys' fees in addition to any other
available remedy.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
CITYSCAPE FINANCIAL CORP.
By: /s/ Robert C. Patent
--------------------------------
Name: Robert C. Patent
Title: Executive Vice President
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
NATWEST SECURITIES LIMITED
BEAR, STEARNS & CO. INC
CIBC WOOD GUNDY SECURITIES CORP.
WASSERSTEIN PERELLA SECURITIES, INC.
By: NATWEST SECURITIES LIMITED
By:
--------------------------------
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
CITYSCAPE FINANCIAL CORP.
By:
--------------------------------
Name:
Title:
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
NATWEST SECURITIES LIMITED
BEAR, STEARNS & CO. INC
CIBC WOOD GUNDY SECURITIES CORP.
WASSERSTEIN PERELLA SECURITIES, INC.
By: NATWEST SECURITIES LIMITED
By: /s/ Melvin Rowe
--------------------------------
Melvin Rowe
Director, Equity Capital Markets
<PAGE>
SCHEDULE I
MANAGERS
NatWest Securities Limited
Bear, Stearns & Co. Inc
CIBC Wood Gundy Securities Corp.
Wasserstein Perella Securities, Inc.
EXHIBIT 10.48
Execution Copy
CITYSCAPE FINANCIAL CORP.
U.S. $125,000,000
6% Convertible Subordinated Debentures due 2006
SUBSCRIPTION AGREEMENT
April 26, 1996
NATWEST SECURITIES LIMITED
BEAR STEARNS & CO. INC.
CIBC WOOD GUNDY SECURITIES CORP.
WASSERSTEIN PERELLA SECURITIES, INC.
c/o NatWest Securities Limited
135 Bishopsgate
London EC2M 3XT
England
Ladies and Gentlemen:
Cityscape Financial Corp., a Delaware corporation (the "Company"),
proposes to issue and sell to the subscribers named on Schedule I hereto (the
"Managers") U.S. $125,000,000 aggregate principal amount of 6% Convertible
Subordinated Debentures due 2006 (the "Firm Debentures"), which are convertible
into common stock of the Company, par value $0.01 per share (the "Common
Stock"), at a conversion price of U.S. $52.50 per share, subject to adjustment
under certain conditions. In addition, the Company shall, at the option (the
"Option") of NatWest Securities Limited, Bear Stearns & Co. Inc., CIBC Wood
Gundy Securities Corp. and Wasserstein Perella Securities, Inc. (the "Lead
Managers"), issue and sell to the Managers up to an additional U.S. $18,750,000
aggregate principal amount of 6% Convertible Subordinated Debentures due 2006 on
the terms and conditions and for the purposes set forth in Section 1b (the
"Option Debentures"). The Firm Debentures and, if purchased, the Option
Debentures are hereinafter collectively referred to as the "Debentures." The
issuance and sale of the Debentures is hereinafter referred to as the
"Offering." The Debentures are to be issued pursuant to an Indenture (the
"Indenture") to be dated as of May 7, 1996, between the Company and The Chase
Manhattan Bank, N.A., as trustee (the
<PAGE>
"Trustee"). The shares of Common Stock issuable upon conversion of the
Debentures are hereinafter collectively referred to as the "Conversion Shares."
The Company hereby confirms its agreement with the several Managers as
follows:
1. Agreement to Sell and Purchase.
(a) On the basis of the representations and warranties contained in, and
subject to the terms and conditions of, this Agreement, (i) the Company agrees
to issue and sell to the Managers the Firm Debentures and (ii) each of the
Managers, jointly and severally, agrees to subscribe and pay for or procure the
subscription and payment for the Firm Debentures, on the Initial Closing Date
(as defined in Section 3) at a subscription price (the "Initial Subscription
Price") of 100% of the principal amount of the Firm Debentures plus accrued
interest, if any, from May 7, 1996, less a selling concession of 1.8% of the
principal thereof and a combined management and underwriting fee of 1.2% of the
principal thereof. Each Debenture will be convertible at the option of the
holder, at such times as specified in the Indenture into shares of Common Stock
at a conversion rate of 19.048 shares of Common Stock per $1,000 principal
amount of Debentures, subject to adjustment, as specified in the Indenture.
(b) The Company hereby grants the Option to the several Managers to
purchase, jointly and severally, the Option Debentures at the same price per
Option Debenture as the Managers shall pay for the Firm Debentures. The Option
may be exercised only to cover over-allotments in the sale of the Firm
Debentures by the Managers and may be exercised once in whole or in part at any
time on or before the date that is 30 days after the date hereof (or the next
business day if the 30th day is not a business day) upon notice (the "Option
Debentures Notice") in writing by the Lead Managers to the Company setting forth
the aggregate principal amount of the Option Debentures to be purchased and the
date of such purchase (such date, an "Option Closing Date"). The Initial Closing
Date and Option Closing Date are sometimes herein referred to respectively as
the related "Closing Dates". On the Option Closing Date, the Company will issue
and sell to the Managers the principal amount of Option Debentures set forth in
the related Option Debentures Notice and the Managers each jointly and severally
agree to purchase such Option Debentures, and that each Manager will purchase
such percentage of the related Option Debentures as is equal to the percentage
of Firm Debentures that such Manager is to purchase on the Initial Closing Date,
as adjusted by the Lead Managers in such manner as they may agree is advisable
to avoid fractional Debentures.
(c) The Debentures are to be offered and sold to the Managers pursuant to
an exemption from the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act"). Upon original issuance thereof, and until
such time as the same is no longer required under the applicable requirements of
the Securities Act, the Restricted Debentures (as hereinafter defined) and any
Conversion Shares issued upon conversion of the Restricted Debentures, shall
bear the following legend:
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<PAGE>
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS,
ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE COMPANY THAT:
(I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT;
(II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE
DATE WHICH IS THREE YEARS (OR SUCH SHORTER PERIOD AS SHALL BE PERMITTED AS
A RESULT OF AN AMENDMENT TO THE RULES UNDER THE SECURITIES ACT IN RESPECT
THEREOF) AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) (THE
"RESALE RESTRICTION TERMINATION DATE") EXCEPT
(A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT PURSUANT
TO AND IN COMPLIANCE WITH REGULATION S,
(E) IN A TRANSACTION ARRANGED BY A BROKER OR DEALER REGISTERED UNDER THE
UNITED STATES SECURITIES EXCHANGE ACT OF 1934, AS
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<PAGE>
AMENDED, TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE
MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501 UNDER
THE SECURITIES ACT) THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY APPLICABLE JURISDICTION; AND
(III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II)
ABOVE. IF ANY RESALE OR OTHER TRANSFER OF THIS SECURITY IS PROPOSED TO BE
MADE PURSUANT TO CLAUSE II(E) ABOVE PRIOR TO THE DATE WHICH IS THREE YEARS
(OR SUCH SHORTER PERIOD AS SHALL BE PERMITTED AS A RESULT OF AN AMENDMENT
TO THE RULES UNDER THE SECURITIES ACT IN RESPECT THEREOF) AFTER THE DATE
OF ORIGINAL ISSUANCE HEREOF, THE TRANSFEROR SHALL DELIVER A LETTER FROM
THE TRANSFEREE CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY. ANY OFFER, SALE OR OTHER
DISPOSITION PURSUANT TO THE FOREGOING CLAUSES (II)(D), (E) AND (F) IS
SUBJECT TO THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE TRUSTEE TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER
INFORMATION ACCEPTABLE TO THEM IN FORM AND SUBSTANCE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE."
Upon original issuance thereof, and until such time as the same is no longer
required under the requirements of The Depository Trust Company (the
"Depository"), the Restricted Debentures issued in global form shall include the
following paragraph:
Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by
the Depository or any such nominee to a successor Depository or a nominee
of such successor Depository. Unless this
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<PAGE>
certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (55 Water Street, New York, New
York) (the "Depository"), to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or such other name as may be requested by an
authorized representative of the Depository (and any payment is made to
Cede & Co. or such other entity as may be requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL (inasmuch as
the registered owner hereof, Cede & Co., has an interest herein).
2. Terms of the Offering.
(a) The Lead Managers have advised the Company that the Managers will
offer (the "Exempt Resales") the Debentures purchased by them hereunder on the
terms set forth in the Offering Circular (as hereinafter defined), as amended or
supplemented, solely to: (i) persons (each, a "Regulation S Purchaser") who are
outside the "United States" and not "U.S. Persons," as such terms are defined in
Regulation S promulgated under the Securities Act ("Regulation S"), and who are
not purchasing for the account or benefit of a U.S. Person pursuant to and in
compliance with Regulation S, (ii) persons (each, a "Rule 144A Purchaser") whom
the Managers reasonably believe to be "qualified institutional buyers" ("QIBs"),
as such term is defined in Rule 144A under the Securities Act ("Rule 144A"), and
(iii) a limited number of other persons whom the Managers reasonably believe to
be institutional "accredited investors," as such term is defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act, who have made certain
representations and agreements to the Company (each an "Accredited Investor") in
a letter containing representations and agreements in the form attached to the
Offering Circular as Appendix A. The Regulation S Purchasers, Rule 144A
Purchasers and Accredited Investors are hereinafter referred to as the "Eligible
Purchasers." The Managers have advised the Company that they will offer the
Debentures to Eligible Purchasers initially at a price equal to 100% of the
principal amount of the Debentures, together with accrued interest from May 7,
1996.
(b) The Managers have offered and will offer and sell the Debentures (i)
as part of their distribution at any time and (ii) otherwise until the
expiration of the 40-day period (the "restricted period") commencing on the
later of the commencement of the Offering and the related Closing Date, only in
accordance with Rule 903 of Regulation S. Each of the Managers, their affiliates
and the persons acting on their behalf have complied and will comply with the
offering restrictions and other requirements of Regulation S.
(c) Each Manager also severally agrees that, at or prior to confirmation
of sales of Debentures (other than a sale by NatWest Securities Limited, acting
through NatWest Securities Corporation, a registered broker-dealer affiliate of
NatWest Securities Limited ("NSC")), and, with the prior approval of the Lead
Managers, other Managers, acting through their registered broker-dealer
affiliates, to QIBs in accordance with Rule 144A or to Accredited Investors,
such Manager
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<PAGE>
will have sent to each distributor, dealer or person receiving a selling
commission, fee or other remuneration in respect of the Debentures during the
restricted period a confirmation or notice to substantially the following
effect:
The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and may
not be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons (as defined in Regulation S under the
Securities Act) (i) as part of their distribution at any time or (ii)
otherwise until the expiration of the 40-day period commencing on the
later of the commencement of the offering and the related Closing Date,
except in either case in accordance with Regulation S (or Rule 144A, if
available or another available exemption from the registration
requirements of the Securities Act; provided that in the case of such
other exemption, the Company and Trustee may require an appropriate
opinion of counsel, as required by the Indenture) under the Securities Act
and the requirements of U.S. Treasury Regulation
ss.1.163-5(c)(2)(i)(D)(1)(ii).
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Notwithstanding paragraph (b) above, NatWest Securities Limited,
acting through NSC, and, with the prior approval of the Lead Managers, any other
Manager, acting through its registered broker-dealer affiliate, may purchase
Debentures for reoffer and resale to QIBs in accordance with Rule 144A (the
"Rule 144A Debentures") or to Accredited Investors in a transaction exempt from
registration under the Securities Act (the "Accredited Investor Debentures" and,
together with the Rule 144A Debentures, the "Restricted Debentures"), on the
basis that the Restricted Debentures will be issued in registered form as
defined in U.S. Treasury Regulation ss.5f.103-1(c) and delivered to NSC, or a
nominee designated by it, for the account of the purchasers thereof on the
related Closing Date, the Restricted Debentures are "restricted" securities
which have not been registered under the Securities Act.
3. Delivery and Payment. The closing for the purchase and sale of the Firm
Debentures shall occur at the offices of NatWest Securities Limited, 135
Bishopsgate, London, England EC2M 3XT, and simultaneously at the offices of
Gibson, Dunn & Crutcher, special counsel for the Company, 200 Park Avenue, New
York, New York 10166 at 3:00 p.m., London time, on May 7, 1996 or at such other
time or on such other date as may be agreed upon by the Company and the Lead
Managers (such date is hereinafter referred to as the "Initial Closing Date").
The Initial Subscription Price in respect of the Debentures sold to Regulation S
Purchasers will be paid by the Lead Managers on behalf of the Managers to the
Company (to such account as the Company shall, at least two business days prior
thereto, have instructed the Lead Managers to make payment) on the Initial
Closing Date in next day clearing house funds or, at the option of the Company,
by wire transfer in same day funds less reimbursement to the Lead Managers for
overnight interest at the then prevailing federal funds rate. Such payment shall
be made against delivery of a temporary global certificate (the "Temporary
Global Security") in respect of the Debentures sold to Regulation
-6-
<PAGE>
S Purchasers, in bearer form without interest coupons or conversion rights, to a
common depository for Morgan Guaranty Trust Company of New York, Brussels
Office, as operator (the "Euroclear Operator") of the Euroclear System
("Euroclear"), and Cedel Bank, societe anonyme ("Cedel"), and the Managers will
arrange that, at their direction, the Euroclear Operator or Cedel will credit
each Regulation S Purchaser with the aggregate principal amount of the
Debentures allotted to it to the extent that the same have been subscribed and
paid for by such Regulation S Purchaser. The Initial Subscription Price in
respect of the Rule 144A Debentures and Accredited Investor Debentures will be
paid by the Lead Managers on behalf of the Managers to the Company (to such
account as the Company shall, at least two business days prior thereto, have
instructed the Lead Managers to make payment) on the Initial Closing Date by
wire transfer in same day funds. Such payment shall be made against (i) delivery
to the Depository of one or more Debentures (the "Global Securities"), each in
definitive form, registered in the name of Cede & Co., as nominee of the
Depository, having an aggregate amount corresponding to the aggregate principal
amount of Rule 144A Debentures sold to the Rule 144A Purchasers and (ii)
delivery to the Managers, acting through NSC (delivery to be made to NSC, 175
Water Street, New York, NY 10038, or at such other place or places as NSC shall
determine), of the Accredited Investor Debentures, each in definitive form,
registered in such names and denominations as the Lead Managers may so request,
having an aggregate principal amount corresponding to the aggregate principal
amount of Accredited Investor Debentures sold to Accredited Investors. If the
Option is exercised as to all or any portion of the Option Debentures, the
closing and delivery and payment for such Option Debentures shall occur as set
forth above on the Option Closing Date.
4. Representations and Warranties of the Company. The Company represents,
warrants and covenants as of the date hereof and, as set forth in Section 8(c)
will represent, warrant and covenant as of the Initial Closing Date and Option
Closing Date, to each Manager that:
(a) The Company has prepared an offering circular to be dated the date
hereof (including the appendices thereto, the "Offering Circular") relating to
the Debentures and the Company. The Offering Circular will be in the form of the
draft thereof previously provided to the Lead Managers, with only those changes
therein as the Lead Managers shall have approved. Any reference herein to the
Offering Circular or any amendment or supplement thereto shall be deemed to
refer to and include the documents relating to the Company (including, without
limitation, financial statements, financial statement schedules and exhibits)
included as appendices, if any, thereto.
(b) The Offering Circular, as of its date, contains, and as of the date
thereof, each amendment or supplement thereto, if any, contains or will contain
all the information specified in Rule 144A. Neither the Offering Circular nor
any amendment or supplement thereto contains or will contain, as the case may
be, any untrue statement of a material fact or omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the foregoing representations and warranties in this Section 4(b) do not
apply to any statements or omissions made in reliance on and in conformity with
information relating to any Manager furnished in writing to the Company by the
Lead Managers on behalf of the Managers expressly for use in the Offering
Circular.
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<PAGE>
(c) The consolidated financial statements of the Company and its
subsidiaries, together with related notes, included in the Offering Circular
present fairly the financial position of the Company its subsidiaries
consolidated at the indicated dates and for the indicated periods. Such
financial statements have been prepared in conformity with generally accepted
accounting principles ("GAAP"), consistently applied throughout the periods
involved, and all adjustments necessary for a fair presentation of results for
such periods have been made. The summary financial and statistical data included
in the Offering Circular present fairly and accurately the information shown
therein. The pro forma financial statements of the Company and certain of its
subsidiaries and the related notes thereto included in the Offering Circular
present fairly and accurately the information shown therein at the dates and for
the periods indicated, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein. The financial
information appearing in the Offering Circular presents fairly and accurately
the information purported to be shown therein at the dates and for the periods
indicated.
(d) Since the respective dates as of which information is given in the
Offering Circular (or given or incorporated by reference in any amendment
thereof or supplement thereto), and except as otherwise disclosed therein, there
has been no material adverse change in the business or financial condition of
the Company and its subsidiaries, taken as a whole, whether or not arising in
the ordinary course of business, and the Company and its subsidiaries, on a
consolidated basis, have not incurred any material liabilities or obligations,
direct or contingent, or entered into any material transaction not in the
ordinary course of business.
(e) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Offering Circular; each of the subsidiaries of the Company, is
listed in Schedule II hereto together with the jurisdiction of its incorporation
and has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with corporate
power and authority to own or lease its properties and conduct its business as
described in the Offering Circular; also set forth on Schedule II is an
"Activity List by Entity," setting forth, for the Company and each subsidiary,
every jurisdiction in which the Company or each subsidiary, as the case may be,
holds any license, originates or services mortgages, has employees, owns or
leases property or owns or maintains any other significant asset (including bank
accounts) (each, an "Activity"). Except in the state of New Jersey where the
failure to be so qualified will not have a materially adverse effect on the
business of the Company and the Subsidiaries taken as a whole, the Company and
each of its subsidiaries, as the case may be, is duly qualified to transact
business in each jurisdiction in which they conduct an Activity as identified on
the Activity List by Entity, such jurisdictions being all jurisdictions in which
the conduct of their respective businesses requires such qualification.
(f) The Company and its subsidiaries have good and marketable title to, or
valid and enforceable leasehold estates in, all real and personal property owned
by them that are material to the Company and its subsidiaries taken as a whole,
in each case free and clear of all liens, claims,
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<PAGE>
security interests, encumbrances and defects, except (i) as do not materially
interfere with the use made of such properties, (ii) as referred to in the
Offering Circular (including the notes to the financial statements included or
incorporated by reference therein), or (iii) as could not reasonably be
expected, singly or in the aggregate, to have a material adverse effect on the
business or financial condition of the Company and its subsidiaries, taken as a
whole.
(g) Neither the Company nor any of its subsidiaries has received any
notice of conflict with, or infringement of, the asserted rights of others with
respect to any patents, trademarks, trade names, service marks, copyrights,
licenses and other rights necessary for the conduct of the Company's and such
subsidiaries' respective businesses as described in the Offering Circular (other
than conflicts or infringements that, if proven, would not have a material
adverse effect on the business or financial condition of the Company and its
subsidiaries, taken as a whole).
(h) Each of the Company and its subsidiaries has all requisite power and
authority (corporate and other), and is duly licensed by all appropriate
regulatory authorities (except where failure to be so licensed would not have a
material adverse effect upon the business or financial condition of the Company
and its subsidiaries, taken as a whole), to own its properties and conduct its
business as it is currently being carried on and as described in the Offering
Circular.
(i) The Company and its subsidiaries have filed all federal, state and
foreign income tax returns which have been required to be filed and have paid
all taxes indicated by said returns and all assessments received by them or any
of them to the extent that such taxes have become due, other than those for
fiscal years which are being contested in good faith and for which adequate
reserves have been provided.
(j) The certificates issued by the trusts established under pooling and
servicing agreements to which the Company or any of its subsidiaries is a party
were issued and sold by the Company in compliance with all applicable securities
laws of each jurisdiction in which such securities have been sold.
(k) Neither the Company nor any of its subsidiaries (i) is in violation of
its respective certificate or articles of incorporation, charter or bylaws or
other governing documents, (ii) is in violation or default, or would be in
violation or default with notice or lapse of time, of any term of any contract,
license, indenture, mortgage, deed of trust, bank loan or credit agreement,
note, lease, permit, authorization or any other agreement or instrument to which
the Company or any such subsidiary is a party or by which it is bound, or to
which any of the property or assets of the Company or any such subsidiary is
subject, which is material to the business or financial condition of the Company
and its subsidiaries taken as a whole, or (iii) is in violation of any law,
ordinance, governmental rule, permit, judgment, decree, statute, rule or
regulation to which it is subject nor has it failed to obtain any license,
certificate, permit, franchise or other governmental authorization,
registration, acceptance or approval necessary to the ownership, leasing or
operation of its property or to the conduct of its business as it is currently
being carried on and as described in the Offering Circular, except as are
described in the Offering Circular, where any such violation or default would
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<PAGE>
have, individually or in the aggregate, a material adverse effect on the
business or financial condition of the Company and its subsidiaries, taken as a
whole.
(l) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, or any arbitrator, now pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any of its subsidiaries not described in the Offering Circular the
disposition of which would result in any material adverse change in the business
or financial condition of the Company and its subsidiaries, taken as a whole, or
the disposition of which could materially and adversely affect the consummation
of transactions contemplated by this Agreement, the Indenture, the Registration
Rights Agreement or the Debentures.
(m) No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of its Subsidiaries or any of their respective properties or assets is
required for the execution, delivery and performance of this Agreement, the
Indenture, the Registration Rights Agreement and the Debentures and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the issuance, sale and delivery of the Debentures pursuant
to this Agreement (other than the registration under the Securities Act of the
Restricted Debentures and related Conversion Shares), except such as have been
obtained and such as may be required under (i) the Securities Act and foreign
and state securities or "Blue Sky" laws, (ii) the bylaws and rules of the
National Association of Securities Dealers, Inc. (the "NASD"), (iii) the rules
of the Luxembourg Stock Exchange, (iv) the Securities Act with respect to the
registration of the Restricted Debentures and related Conversion Shares solely
insofar as such registration is required by the terms of the Debentures and the
Indenture and (v) the qualification of the Indenture and the Trustee under the
TIA.
(n) No injunction, stop order, restraining order or order of any nature by
a federal, state or foreign court of competent jurisdiction has been issued that
would prevent or interfere with the issuance of the Debentures (including, but
not limited to, any order suspending the use of the Offering Circular or
suspending the registration or qualification of the Conversion Shares); no
proceedings with the purpose of preventing or interfering with the Offering are
pending or, to the Company's knowledge, threatened by any securities or other
governmental authority in any jurisdiction (including, without limitation, the
United States Securities and Exchange Commission (the "Commission")); no order
asserting that any of the transactions contemplated by this Agreement, the
Indenture or the Offering Circular, other than the resale of Restricted
Debentures or related Conversion Shares pursuant to the Registration Statement
described in Section 5(n) hereof, are subject to the registration or prospectus
delivery requirements of the Securities Act has been issued; and no order
suspending the qualification or exemption from qualification of the Debentures
or the Conversion Shares under the Securities Act is in effect and no proceeding
for such purpose is pending before or threatened or, to the Company's knowledge,
contemplated by the Commission.
(o) The authorized, issued and outstanding capital stock of the Company,
and the capital stock reserved or committed for issuance, is as set forth under
the captions "Capitalization",
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"Description of Capital Stock", "Recent Developments - J&J Acquisition" and
"Management Executive Compensation, - Board of Directors, and - Employee Stock
Plans" in the Offering Circular. All of the issued and outstanding shares of
Common Stock are duly and validly authorized and issued, and all of the issued
and outstanding shares of Common Stock are, and the Conversion Shares when
acquired on the terms and conditions specified in the Debentures and the
Indenture will be, fully paid and nonassessable. There are no preemptive rights
or other rights to subscribe for or to purchase, or any restriction upon the
voting or transfer of, any Conversion Shares pursuant to the Company's
certificate of incorporation, bylaws or any oral or written agreement or other
instrument to which the Company or any of its subsidiaries is a party or by
which either the Company or any of its subsidiaries is bound that is not
described in the Offering Circular. Neither the offering and sale of the
Debentures, as contemplated by this Agreement, nor the registration, issuance or
delivery of the Conversion Shares, as contemplated by the Indenture, the
Registration Rights Agreement and the Debentures, gives rise to any rights,
other than those which have been waived in writing or satisfied, for or relating
to the registration or offering of any shares of capital stock or other
securities of the Company. The Common Stock of the Company conforms in all
material respects to the statements relating thereto in the Offering Circular.
(p) The Company owns all of the outstanding capital stock of each of the
Company's subsidiaries. All outstanding shares of such capital stock was issued
and is owned or held without violation of any preemptive rights. All outstanding
shares of such capital stock of each of the Company's subsidiaries that is
organized under the laws of a state of the United States have been duly
authorized and validly issued, are fully paid and non-assessable and are owned
by the Company or one of its subsidiaries free and clear of all liens,
encumbrances, security interests, restriction on transfer, stockholders'
agreement, voting trust or any other defect of title whatsoever (except for
restrictions imposed under the Securities Act or applicable state securities
laws and except that all of the outstanding capital stock of Cityscape Funding
Corp is pledged to secure certain indebtedness as described in the Offering
Circular); (except for 312,501 "A" ordinary shares of (pound)1.00 each in City
Mortgage Corporation Limited ("CSC-UK") which are not as yet paid and subject to
a (pound)1.00 per share call) all outstanding shares of capital stock of each of
the Company's subsidiaries that is organized under the laws of the United
Kingdom have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company or one of its subsidiaries free and
clear of all liens, encumbrances, security interests, restriction on transfer,
stockholders' agreement, voting trust or any other defect of title whatsoever
(except for restrictions imposed under the Securities Act or applicable foreign
and state securities laws). Except as described in the Offering Circular, no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into shares of capital stock
or ownership interests in the subsidiaries are outstanding.
(q) The Debentures have been duly and validly authorized by the Company
and when the Debentures have been authenticated by the Trustee and issued,
executed, delivered and sold by the Company against payment therefore and
otherwise in accordance with this Agreement and the Indenture, will have been
duly and validly executed, authenticated, issued and delivered and will (i)
constitute valid and legally binding obligations of the Company enforceable
against the Company
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<PAGE>
in accordance with their terms entitled to the benefits of the Indenture,
subject to bankruptcy, insolvency, reorganization, fraudulent conveyance or
similar laws relating to or affecting the rights of creditors generally and by
equitable principles, and (ii) be convertible into the Conversion Shares in
accordance with the terms thereof and of the Indenture. The Company has a
sufficient number of authorized but unissued shares of Common Stock to enable
the Company to issue, without further stockholder action, all the Conversion
Shares. The Conversion Shares have been duly and validly authorized and reserved
for issuance upon conversion of the Debentures and, when issued and delivered
upon such conversion, will be duly and validly issued and outstanding, fully
paid and nonassessable and will not have been issued in violation of or subject
to any preemptive or other similar rights. The Debentures and the Conversion
Shares, when issued, will conform to the respective descriptions thereof set
forth in the Offering Circular.
(r) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Indenture, the Registration Rights Agreement and the Debentures, and to issue,
sell and deliver the Debentures and the Conversion Shares in accordance with and
upon the terms and conditions set forth in this Agreement, the Indenture, the
Registration Rights Agreement and the Debentures, as the case may be. All
necessary corporate proceedings of the Company have been duly taken to authorize
the execution, delivery and performance by the Company of this Agreement, the
Indenture and the Registration Rights Agreement and the issuance, sale and
delivery by the Company of the Debentures and the Conversion Shares.
(s) The execution, delivery and performance by the Company of this
Agreement, the Indenture, the Registration Rights Agreement and the Debentures,
the issuance, offering and sale by the Company of the Debentures as contemplated
by the Offering Circular, the issuance by the Company of the Conversion Shares
upon exercise of the conversion rights contained in the Indenture and the
Debentures and the consummation of the transactions contemplated hereby and
thereby and compliance with the terms and provisions hereof and thereof, will
not (i) violate or conflict with any provision of the certificate or articles of
incorporation, charter, bylaws or other governing documents of the Company or
any of its subsidiaries, (ii) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which with notice
or lapse of time, or both, would constitute a default) under, or require, except
for such consents as have been obtained and are currently in effect, consent
under, or the creation or imposition of any lien, charge, security interest or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to the terms of, any agreement, understanding, franchise,
license, permit or other instrument to which the Company or any of its
subsidiaries is a party or by which any of them or their respective properties
or assets may be bound which is material to the business or financial condition
of the Company and its subsidiaries, taken as a whole or (iii) violate or
conflict with any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets, which violation, conflict, breach, default or
lien would, in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
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<PAGE>
(t) This Agreement has been duly authorized, executed and delivered by the
Company.
(u) The Indenture has been duly and validly authorized by the Company and
on the Initial Closing Date will have been duly executed and delivered by the
Company (assuming the due authorization, execution and delivery of the Indenture
by the Trustee), the Indenture will constitute a valid and legally binding
instrument of the Company, enforceable against the Company in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws relating to or affecting
the rights of creditors generally and by equitable principles. The Indenture
will conform to the description thereof set forth in the Offering Circular and
will meet the requirements for qualification of indentures contained in the
Trust Indenture Act of 1939, as amended (the "TIA").
(v) The Registration Rights Agreement (the "Registration Rights
Agreement") dated the date hereof, between the Company and the Managers has been
duly and validly authorized by the Company and on the date hereof will have been
duly executed and delivered by the Company. The Registration Rights Agreement
conforms to the description thereof set forth in the Offering Circular.
(w) Neither the Company nor any of its officers and directors (as defined
in the Exchange Act Rules and Regulations) has taken or will take, directly or
indirectly, prior to the termination of the Offering contemplated by this
Agreement and the Offering Circular, any action designed to stabilize or
manipulate the price of any security of the Company, or which has caused or
resulted in, or which might in the future reasonably be expected to cause or
result in, stabilization or manipulation of the price of any security of the
Company, to facilitate the sale or resale of the Debentures or the Conversion
Shares.
(x) Neither the Company, nor any of its subsidiaries, is and upon the
issuance and sale of the Debentures as herein contemplated and the application
of the net proceeds therefrom as described in the Offering Circular under the
caption "Use of Proceeds" neither will be, an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended, or an "investment advisor" as such term is defined in the
Investment Advisors Act of 1940, as amended.
(y) In connection with this Offering, the Company has not offered and will
not offer Debentures, its Common Stock or any other securities convertible into
or exchangeable or exercisable for Common Stock in a manner in violation of the
Securities Act. The Company has not distributed and will not distribute any
Offering Circular or other offering material in connection with the offer and
sale of the Debentures or the exchange thereof for Conversion Shares and neither
the Company nor any of its representatives (which, for purposes of this Section
4(ii), shall not include the Managers or anyone acting on behalf of any Manager)
has engaged in any form of general solicitation or general advertising in
connection with this Offering, including, but not limited to, advertisements,
articles, notices or other communication published in any newspaper, magazine or
similar medium or broadcast over television or radio, or any seminar or meeting
whose attendees
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<PAGE>
have been invited by any general solicitation or general advertising. No
securities of the same class as the Debentures have been issued and sold by the
Company within the six-month period immediately prior to the date hereof.
(z) The Company is a reporting issuer (within the meaning of Regulation S
under the Securities Act).
(aa) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Debentures are listed on any
national securities exchange, registered under Section 6 of the Exchange Act or
are quoted in an automated inter-dealer quotation system.
(bb) Application has been made to list the Debentures on the Luxembourg
Stock Exchange subject only to notice of issuance and for clearance of the Rule
144A Debentures through Euroclear and Cedel, and to designate the Debentures for
trading on the Private Offerings Resales and Trading through Automated Linkages
system of the NASD ("PORTAL").
(cc) Subject to compliance by the Managers with their several obligations
set forth herein, and assuming the accuracy of the Manager's representations and
warranties set forth herein, the sale to the Managers and resale by the Managers
to the Eligible Purchasers as contemplated herein and in the Offering Circular
is exempt from, or not subject to, the registration and prospectus delivery
requirements of the Securities Act.
(dd) Any certificate signed by any officer of the Company and delivered to
the Managers or to counsel for the Managers pursuant to this Agreement shall be
deemed a representation and warranty by the Company to each Manager as to the
matters covered thereby.
5. Agreements of the Company. The Company covenants and agrees with each
of the Managers as follows:
(a) The Company will not amend or supplement the Offering Circular, unless
a copy thereof shall first have been submitted to the Lead Managers within a
reasonable period of time prior to the use thereof and the Lead Managers shall
have consented to such amendment or supplement which consent shall not be
unreasonably withheld. Prior to the completion of the sale of the Debentures by
the Managers (which shall not be deemed to be more than 40 days after the
Closing Date), the Company will not file any document under the Exchange Act
unless the Company has furnished the Lead Managers a copy for their review prior
to filing and will not file any such document to which the Lead Managers
reasonably object for legal reasons. Prior to the completion of the sale of the
Debentures by the Managers (which shall not be deemed to be more than 40 days
after the Closing Date), the Company will promptly prepare such amendments or
supplements to the Offering Circular as shall be necessary to reflect such facts
as shall be disclosed in such filed documents, and provide the Managers as many
copies of such amendment or supplement as they shall reasonably request.
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<PAGE>
(b) The Company will promptly advise the Lead Managers when, prior to the
completion of the sales of the Debentures (which shall not be deemed to be more
than 40 days after the Closing Date), any document filed under the Exchange Act
shall have been filed with the Commission.
(c) The Company will notify the Lead Managers promptly, and will confirm
such advice in writing, (i) of any request by the securities or other
governmental authority of any jurisdiction for any additional information
(including, but not limited to, any amendments or supplements to the Offering
Circular), (ii) of the issuance by any securities or other governmental
authority of any jurisdiction (including, but not limited to, the Commission) of
any stop order suspending or preventing the use of the Offering Circular or
asserting that the Offering is subject to the registration requirements of the
Securities Act, or the initiation of any proceedings for any such purposes or
the threat thereof, (iii) of the happening of any event that in the judgment of
the Company makes any statement made in the Offering Circular untrue or that
requires the making of any changes in the Offering Circular in order to make the
statements therein not misleading and (iv) of receipt by the Company or any
representative or attorney of the Company of any other communication from any
securities or other governmental authority of any jurisdiction (including,
without limitation, the Commission) relating to the Debentures or the Offering
Circular. If at any time any securities or other governmental authority
(including, without limitation, the Commission) shall issue any order described
in clause (ii) of the immediately preceding sentence, the Company will make
every reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. The Company will prepare and deliver the Offering Circular to
the Managers as promptly as practicable after the date hereof.
(d) If, at any time prior to the completion of the Offering, any event
occurs as a result of which the Offering Circular, taken as a whole, as then
amended, would include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, or if for any
other reason it is necessary at any time to amend the Offering Circular to
comply with the laws of any jurisdiction, the Company will promptly notify the
Lead Managers thereof and, subject to Section 5(b) hereof, will prepare an
amendment to the Offering Circular that corrects such statement or omission or
effects such compliance.
(e) The Company will deliver to the Managers, without charge, as many
copies of the Offering Circular or any amendment thereto as the Managers may
reasonably request. The Company consents to the use of the Offering Circular or
any amendment or supplement thereto by the Managers in connection with the
issuance and sale of the Debentures.
(f) The Company will arrange for the qualification of the Debentures and
the Conversion Shares for sale under the laws of such jurisdictions as the Lead
Managers may reasonably designate, will maintain such qualifications in effect
so long as required for the sale of the Debentures and the Conversion Shares,
provided the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction where it
is not now qualified or required to file such a consent. The Company will
promptly advise the Lead Managers of the receipt
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<PAGE>
by the Company of any notification with respect to the suspension of the
qualification of the Debentures or the Conversion Shares for sale in any
jurisdiction or the initiation or the threatening of any proceeding for such
purpose.
(g) The Company will apply the net proceeds from the sale of the
Debentures as set forth under "Use of Proceeds" in the Offering Circular.
(h) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result, in,
or which will constitute, under the Securities Act or otherwise, stabilization
of the price of any security of the Company to facilitate the sale or resale of
the Debentures.
(i) The Company will cause each executive officer and director and each of
the stockholders listed in Schedule III attached hereto of the Company, on or
prior to the date of this Agreement, to enter into an agreement with the
Managers to the effect that they will not for a period of 120 days after the
date hereof, without the prior written consent of NatWest Securities Limited,
directly or indirectly, offer to sell, sell, contract to sell, grant any option
to purchase or otherwise dispose (or announce any offer, sale, grant of any
option to purchase or other disposition) of any Debentures, any shares of Common
Stock or any securities convertible into, or exchangeable or exercisable for,
Debentures or shares of Common Stock other than pertinent agreements in effect
on the date hereof.
(j) The Company shall take such action as is necessary to qualify the
Conversion Shares for designation on the Nasdaq National Market System
("Nasdaq"), subject only to notice of issuance prior to the date the Debentures
become convertible in accordance with their terms and with the terms of the
Indenture and for the clearance of the Debentures through Euroclear and Cedel
and for the designation of the Rule 144A Debentures as PORTAL eligible.
(k) The Company shall use reasonable efforts in cooperation with the Lead
Managers to obtain permission for the Debentures to be eligible for clearance
and settlement through the Depository Trust Company.
(l) The Company will not, for a period of 120 days following the Initial
Closing Date without the prior written consent of NatWest Securities Limited,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any shares of Preferred Stock or Common
Stock; provided however, that the Company may issue and sell Common Stock
pursuant to any employee stock plan of the Company in effect at the Initial
Closing Date, the Company may issue Common Stock issuable upon the conversion of
the Debentures or the exercise of options outstanding at the Initial Closing
Date, and the Company may issue Common Stock in connection with acquisitions,
provided such Common Stock is subject to resale restrictions similar to those
required by Rule 144 under the Securities Act and for which no registration
rights that are exercisable for at least such 120 day period from the Initial
Closing Date have been granted.
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<PAGE>
(m) For so long as any of the Rule 144A Debentures remain outstanding and
are "restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company covenants and agrees that it shall, during any
period in which it is not subject to Section 13 or 15(d) of the Exchange Act,
make available to any holder or beneficial holder of Debentures or Conversion
Shares which continue to be restricted securities in connection with any sale
thereof to any prospective purchaser of such Debentures or Conversion Shares
from such holder or beneficial holder, the information specified in Rule
144A(d)(4) under the Securities Act, and any such 144A information will not, at
the date thereof, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
(n) The Company agrees that it will execute and deliver the Registration
Rights Agreement and, on the terms and conditions therein set forth, prepare and
file a shelf registration statement (the "Registration Statement") and use
reasonable efforts to cause the Registration Statement to be declared effective
by the Commission as promptly thereafter as practicable and continuously to
maintain the effectiveness of the Registration Statement for the period therein
set forth.
(o) During the period commencing on the Initial Closing Date and ending
three years from the last Closing Date, the Company will furnish to the Lead
Managers copies of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to the holders
of any class of its capital stock or file with the Commission, Nasdaq or any
national securities exchange, and will furnish to each Manager who may so
request a copy of each annual or other report it shall be required to file
therewith.
6. Representations and Warranties of the Managers. Each Manager represents
and warrants to the Company and agrees that:
(a) It (i) is not acquiring the Debentures with a view to any distribution
thereof or with the intention of offering and selling any of the Debentures in a
transaction that would violate the Securities Act or the securities or "Blue
Sky" laws of any state of the United States or any other applicable jurisdiction
and (ii) will be reoffering and reselling the Debentures only (A) in "offshore
transactions" (as defined under Regulation S) pursuant to and in compliance with
Regulation S, (B) to QIBs in reliance on the exemption from the registration
requirements of the Securities Act provided by Rule 144A and (C) to a limited
number of Accredited Investors that execute and deliver a letter containing
certain representations and agreements in the form attached as Appendix A to the
Offering Circular.
(b) No form of general solicitation or general advertising, nor any form
of directed selling efforts (as defined in Regulation S), has been or will be
used by it or any of its representatives in connection with the offer and sale
of any of the Debentures, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar medium or
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<PAGE>
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(c) The Managers will solicit offers to buy the Debentures only from, and
will offer to sell the Debentures only to, Eligible Purchasers. Each Manager
further agrees that it will offer to sell the Debentures only to, and will
solicit offers to buy the Debentures only from, persons who in purchasing such
Debentures will have or will be deemed to have acknowledged, represented and
agreed for the benefit of the Company that: (i) they have acquired a security
which has not been registered under the Securities Act; (ii) they will not
offer, sell or otherwise transfer such security, prior to the date which is
three years after the Initial Closing Date (or such other applicable date under
the Securities Act in the event of an amendment of the relevant regulations
comprising Rule 144 under the Securities Act) except (A) to Cityscape Financial
Corp., (B) pursuant to a registration statement which has been declared
effective under the Securities Act, (C) for so long as the security is eligible
for resale pursuant to Rule 144A, to a person who the seller reasonably believes
is a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, (D)
outside the United States in a transaction meeting the requirements of Rule 904
under the Securities Act, (E) in a transaction arranged by a broker or dealer
registered under the Exchange Act, to an institutional "accredited investor"
(within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule 501 under
the Securities Act) that is acquiring the security for its own account, or for
the account of such an institutional "accredited investor," for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act, or (F) pursuant to another
available exemption from the registration requirements of the Securities Act as
confirmed in an opinion of counsel acceptable in form and substance to the
Company and, in each case, in accordance with the applicable securities laws of
any state of the United States or any other applicable jurisdiction; and (iii)
they will, and each subsequent holder is required to, notify any purchaser from
it of the security of the resale restrictions set forth in (ii) above. If any
resale or other transfer of the Restricted Debentures is proposed to be made
pursuant to clause (E) above, prior to the Resale Restriction Termination Date,
the transferor shall deliver a letter from the transferee containing
representations and agreements relating to the restrictions on transfer of such
Restricted Debentures. Any offer, sale or other disposition pursuant to the
foregoing clauses (ii)(D), (E) or (F) is subject to the right of the Company and
the Trustee to require the delivery of an opinion of counsel, certifications or
other information acceptable to them in form and substance.
(d) It will take no action, nor fail to take any action, if such action or
failure to take such action would have the effect that the offer or sale of the
Debentures would not be in compliance with all applicable securities laws and
regulations of any country and political subdivision thereof in which the
Debentures are to be offered or sold.
(e) It has (i) not offered or sold and will not, prior to the expiration
of the period six months from the last Closing Date, offer or sell in the United
Kingdom, by means of any document, any Debentures other than to persons whose
ordinary business it is to buy or sell shares or debentures (whether as
principal or agent) or in circumstances which do not constitute an offer to the
public
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within the meaning of the Public Offers of Securities Regulations 1995; (ii)
complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by them in relation to the
Debentures in, from or otherwise involving the United Kingdom; and (iii) issued
or passed on and will issue or pass on to any person in the United Kingdom any
document received by them in connection with the issuance of the Debentures only
if that person is of a kind described in Article 11(3) of the Financial Services
Act 1986 (Investment Advertisements) (Exceptions) Order 1995, as amended, or is
a person to whom the document may otherwise lawfully be issued or passed on.
(f) Except to the extent permitted under U.S. Treas. Reg.
ss.1.163-5(c)(2)(i)(D) (the "D Rules"), (i) it has not offered or sold, and
during the restricted period described in the D Rules will not offer to sell,
Debentures in bearer form to a person who is within the United States or its
possessions or to a United States person, and (ii) it has not delivered and will
not deliver within the United States or its possessions definitive Debentures in
bearer form that resold during the restricted period described in the D Rules.
(g) It has, and throughout the restricted period described in the D Rules
will have, in effect procedures reasonably designed to ensure that its employees
or agents who are directly engaged in selling Debentures in bearer form are
aware that such Debentures may not be offered or sold during the restricted
period described in the D Rules to a person who is within the United States or
its possessions or to a United States person, except as permitted by the D
Rules.
(h) That if it is a United States person, it is acquiring the Debentures
in bearer form for purposes of resale in connection with their original issuance
and if it retains Debentures in bearer form for its account, it will only do so
in accordance with the requirements of U.S. Treas. Reg.
ss.1.1635(c)(2)(i)(D)(6).
(i) With respect to each affiliate that acquires from it Debentures in
bearer form for the purpose of offering or selling such Debentures during the
restricted period described in the D Rules, such Manager either (x) repeats and
confirms the representations and agreements contained in clauses 6(f), 6(g) and
6(h) on such affiliate's behalf or (y) agrees that it will obtain from such
affiliate for the Company's benefit the representations and agreements contained
in clauses 6(f), 6(g) and 6(h). Terms used in Sections 6(f), 6(g) and 6(h) above
and this Section 6(i) have the meanings given to them by the United States
Internal Revenue Code of 1986, as amended, and the regulations thereunder,
including the D Rules.
(j) It has not entered into and will not enter into any contractual
arrangements with respect to the distribution or delivery of the Debentures,
except with the other Managers, its affiliates or with the prior written consent
of the Company.
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<PAGE>
7. Expenses.
(a) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or reimburse
if paid by the Lead Managers with the Company's prior approval, all costs and
expenses incident to the performance of the obligations of the Company under
this Agreement, including but not limited to costs and expenses of or relating
to (i) the preparation and distribution of the Offering Circular and any
amendments or supplements thereto, (ii) the preparation, printing, issue,
exchange and delivery of the Offering Circular, the Debentures (in both
temporary and definitive form) and the Conversion Shares, (iii) the delivery of
the Indenture, this Agreement, the agreement among managers, if any, any
managers' questionnaire, (iv) furnishing (including costs of shipping and
mailing) such copies of the Offering Circular, and all amendments and
supplements thereto, as may be reasonably required, (v) the listing of the
Debentures on the Luxembourg Stock Exchange, for the designation of the Rule
144A Debentures as PORTAL eligible and for the designation of the Conversion
Shares issuable upon conversion of the Restricted Debentures on NASDAQ, (vi) the
preparation, filing and delivery of the Registration Statement in connection
with the Conversion Shares, and any amendment or supplement thereto, (vii) any
filings required to be made by the Managers with the NASD in connection with the
Offering, (viii) the qualification of the Debentures for offer and sale under
the securities or "Blue Sky" laws of such states in the United States designated
pursuant to Section 5(e), including the reasonable fees, disbursements and other
charges of counsel to the Managers in connection therewith, and the preparation
and printing of preliminary, supplemental and final Blue Sky memoranda
reasonably requested by the Managers, and (ix) all other costs and expenses
incident to the performance of the obligations of the Company hereunder and
under the Indenture and the Registration Rights Agreement which are not
otherwise provided for in this Section 7(a).
(b) If the sale of the Debentures is not consummated because any condition
to the obligations of the Managers set forth in Section 8 hereof is not
satisfied or if for any reason the Company shall be unable to perform its
obligations hereunder (other than as a result of any Manager's failure to
perform any of its obligations hereunder), the Company will reimburse the
several Managers for all out-of-pocket expenses (including the fees,
disbursements and other charges of counsel to the Managers) reasonably incurred
by them in connection herewith. The Company shall not under any circumstances,
including a breach of this Agreement by the Company, be liable to the Managers
for the loss of anticipated profits from the transactions covered by this
Agreement.
8. Conditions to Obligations of Managers. The obligations of each Manager
hereunder shall be subject to the satisfaction of the following conditions as of
the Initial Closing Date and, if any Option Debentures are purchased, as of the
Option Closing Date:
(a) No injunction, stop order, restraining order or order of any nature by
a federal, state or foreign court of competent jurisdiction shall have been
issued as of the related Closing Date that would prevent or interfere with the
issuance of the Debentures; no proceedings with the purpose of preventing or
interfering with the Offering are pending or, to the knowledge of the Company or
any Manager, threatened by any securities or other governmental authority in any
jurisdiction (including,
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without limitation, the Commission); no order of the Commission asserting that
any of the transactions contemplated by this Agreement or the Offering Circular,
other than the resale of Restricted Debentures or related Conversion Shares
pursuant to the Registration Statement, are subject to the registration or
prospectus delivery requirements of the Securities Act has been issued; no order
suspending the qualification or exemption from qualification of the Debentures
or the Conversion Shares under the securities or "Blue Sky" laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or, to the knowledge of the Company or any Manager, threatened by
the authorities of any such jurisdiction; and after the date hereof no amendment
or supplement to the Offering Circular shall have been prepared unless a copy
thereof was first submitted to the Lead Managers and the Lead Managers shall not
have reasonably withheld their consent thereto.
(b) Since the respective dates as of which information is given in the
Offering Circular, (i) there shall not have been any material adverse change in
the business operations, earnings, prospects, properties or condition (financial
or otherwise) of the Company and its subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Offering Circular and (ii)
neither the Company nor any of its subsidiaries shall have sustained any
material loss or interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental action,
order or decree, which is not described in the Offering Circular, if in the
reasonable judgment of the Lead Managers any such development makes it
impracticable to consummate the sale and delivery of the Debentures by the
Managers at the Initial Subscription Price.
(c) Each of the representations and warranties of the Company contained
herein shall be true and correct at the related Closing Date, as if made on such
date, and all covenants and agreements herein contained to be performed on the
part of the Company and all conditions herein contained to be fulfilled or
complied with by the Company at or prior to the related Closing Date, with
respect to the Option Debentures, shall have been duly performed, fulfilled or
complied with.
(d) The Managers shall have received the opinion, dated the related
Closing Date, of Jonah L. Goldstein, Esquire, General Counsel to the Company, in
form and substance reasonably satisfactory to the Lead Managers and to counsel
to the Managers, substantially in the form of Exhibit A hereto.
(e) The Managers shall have received the opinion, dated the related
Closing Date, of Gibson, Dunn & Crutcher, counsel to the Company, in form and
substance reasonably satisfactory to the Lead Managers and to counsel to the
Managers, substantially in the form of Exhibit B hereto.
(f) The Managers shall have received the opinion, dated the related
Closing Date, of Travers Smith Braithwaite, counsel to the Company, in form and
substance reasonably satisfactory to the Lead Managers and to counsel to the
Managers, substantially in the form of Exhibit C hereto.
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<PAGE>
(g) The Managers shall have received the opinion, dated the related
Closing Date, of Andrews & Kurth L.L.P., counsel for the Managers, in form and
substance reasonably satisfactory to the Lead Managers.
(h) Prior to the time this Agreement is executed, the Managers shall have
received from each of the Accountants an agreed upon procedures letter, dated
the date of this Agreement, in form and substance satisfactory to the Lead
Managers and counsel to the Managers with respect to the financial statements
and certain financial information of the Company and its subsidiaries contained
in the Offering Circular, (i) confirming that they are independent accountants
with respect to the Company and its subsidiaries within the meaning of Rule 101
of the Code of Professional Conduct of the American Institute of Certified
Public Accountants, and its interpretations and rulings, and (ii) stating their
conclusions and findings with respect to all financial, pro forma and certain
other statistical and numerical information contained in the Offering Circular.
At the Closing Date and, as to the Option Debentures, the Option Closing Date,
each of the Accountants shall have furnished to the Managers a letter, dated the
date of its delivery, which shall reaffirm such conclusions and findings as of
the related Closing Date on the basis of a review conducted in accordance with
the procedures set forth therein.
(i) At the Initial Closing Date and on the Option Closing Date the
Managers shall receive a certificate, dated the date of delivery, executed on
its behalf by the Company's President and Chief Financial Officer, in form and
substance satisfactory to the Lead Managers, to the effect that each of them
severally represent as follows:
(1) Each signatory of such certificate has carefully examined the
Offering Circular and as of the date of such certificate, the Offering
Circular, taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading.
(2) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct;
(3) Each of the covenants required herein to be performed by the
Company on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be complied with
by the Company on or prior to the delivery of such certificate has been
duly, timely and fully complied with; and
(4) No injunction, stop order, restraining order or order of any
nature by a federal, state or foreign court of competent jurisdiction
shall have been issued as of the date of such certificate that would
prevent or interfere with the issuance of the Debentures; no proceedings
with the purpose of preventing or interfering with the Offering are
pending or, to his knowledge threatened by any securities or other
governmental authority in any
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<PAGE>
jurisdiction (including, without limitation, the Commission); no order of
the Commission asserting that any of the transactions contemplated by this
Agreement or the Offering Circular, other than the resale of Restricted
Debentures or related Conversion Shares pursuant to the Registration
Statement, are subject to the registration or prospectus delivery
requirements of the Securities Act has been issued; no order suspending
the qualification or exemption from qualification of the Debentures or the
Conversion Shares under the securities or "Blue Sky" laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall
be pending before or, to his knowledge, threatened by the authorities of
any such jurisdiction.
(j) The Registration Rights Agreement shall have been executed on or
before the date hereof and the agreements described in Section 5(i) shall have
been executed and delivered to the Lead Managers on or prior to the Initial
Closing Date.
(k) The Debentures shall have been accepted for listing on the Luxembourg
Stock Exchange and for clearance through Euroclear and Cedel and for the
designation of the Rule 144A Debentures as PORTAL eligible.
(l) The Company and the Trustee, shall have entered into the Indenture
Agreement and the Lead Managers shall have received a fully executed original
copy thereof.
(m) The Firm Debentures and the Option Debentures, as the case may be,
shall have been made available for inspection and shall have been delivered to
the Lead Managers or for the accounts of the Managers as set forth herein.
(n) The Managers and counsel for the Managers shall have received such
further certificates, documents or other information as they may have reasonably
requested from the Company.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Lead Managers and
counsel for the Managers. The Company shall furnish to the Managers such
conformed copies of such opinions, certificates, letters and documents in such
quantities as the Managers and counsel for the Managers shall reasonably
request.
9. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Manager, the
directors, officers, employees and agents of each Manager and each person, if
any, who controls each Manager within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), joint or several, to which they, or any of
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them, may become subject under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of or
are based on any untrue statement or alleged untrue statement of a material fact
contained in the Offering Circular (or any amendment or supplement thereto), or
any omission or alleged omission to state a material fact necessary in order to
make the statements in the Offering Circular, in light of the circumstances
under which they were made, not misleading, and shall reimburse to each Manager
and each such controlling person, as incurred, any legal and other expenses
reasonably incurred in investigating or defending or preparing to defend against
or appearing as a third party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable to any Manager in any such case to the extent that any such loss, claim,
damage or liability arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in the Offering
Circular, including any amendment or supplement thereto, in reliance upon and in
conformity with information furnished to the Company by or on behalf of such
Manager specifically for inclusion therein; and provided, further, that the
foregoing indemnity with respect to any untrue statement contained in or
omission from a Offering Circular, which is later amended or supplemented, shall
not inure to the benefit of the any Manager (or any person, if any, who controls
each Manager) from whom the person asserting any such loss, liability, claim,
damage or action purchased the Debentures which are the subject thereof, if a
copy of the Offering Circular as amended or supplemented was not sent or given
by or on behalf of the Manager to such person as of or prior to the written
confirmation of the sale of such Debentures to such person and such untrue
statement contained in or omission from such Offering Circular prior to such
amendment or supplement was corrected in the Offering Circular, as amended or
supplemented, and if the Company had previously furnished copies of amended or
supplemented Offering Circular to the Manager. This indemnity agreement will be
in addition to any liability that the Company might otherwise have.
(b) Each Manager, severally and not jointly, agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities, joint or several, to the same extent as the foregoing
indemnity from the Company to each Manager, but only insofar as such losses,
claims, liabilities, expenses or damages are based solely on any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Offering Circular, including any amendment or supplement thereto, made in
reliance upon and in conformity with information furnished to the Company by or
on behalf of such Manager specifically for inclusion therein. This indemnity
shall be in addition to any liability which such Manager may otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 9 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 9 unless,
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<PAGE>
and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying party of
its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it so elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of any such action, with counsel reasonably satisfactory
to the indemnified party. After receipt of such notice by the indemnified party
from an indemnifying party, no indemnifying party will be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense of such action.
The indemnified party will have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel will be at
the expense of such indemnified party unless (i) the employment of such counsel
by the indemnified party has been authorized in writing by the indemnifying
party, (ii) the indemnified party has reasonably concluded (based on advice of
counsel) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, (iii) a conflict or potential conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party),
or (iv) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action. In any such case, the reasonable fees, disbursements
and other charges of counsel will be at the expense of the indemnifying party or
parties.
It is understood that in no event shall the indemnifying parties be liable
for the fees, disbursements and other charges of more than one counsel (in
addition to any local counsel) for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. All
such fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred and upon receipt of
substantiation of such charges as the indemnifying party may reasonably request.
An indemnifying party will not, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder, unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Managers, the
Company and the Managers will contribute to the total losses, claims,
liabilities,
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<PAGE>
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, any amount paid in settlement of, any
action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the Managers, such
as persons who control the Company within the meaning of the Securities Act or
the Exchange Act, officers and directors of the Company, who also may be liable
for contribution) to which the Company and any one or more of the Manages may be
subject in such proportion as shall be appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Managers on the
other. The relative benefits received by the Company, on the one hand, and the
Managers on the other shall be deemed to be in the same proportion as the total
net proceeds from the Offering (before deducting expenses) received by the
Company bears to the total selling concession and combined underwriting and
management fee received by the Managers, in each case as set forth in Section 1
hereof. If, but only if, the allocation provided by the foregoing sentences is
not permitted by applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Managers, on the other, with respect to the
statements or omissions which resulted in such loss, claim, liability, expense
or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to the Offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Lead Managers on behalf of the
Managers, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Managers agree that it would not be just and equitable
if contributions pursuant to this Section 9(d) were to be determined by pro rata
allocation (even if the Managers were treated as one entity for such purpose) or
by any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 9(d) shall be deemed to
include, for purposes of this Section 9(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim.
Notwithstanding the provisions of this Section 9(d), (i) no Manager shall
be required to contribute, cumulatively, any amount in excess of the selling
concession and combined underwriting and management fee received by it less any
amounts paid by such Manager and (ii) no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Managers' obligations to contribute as
provided in this Section 9(d) are several in proportion to their respective
subscription obligations and not joint. For purposes of this Section 9(d), any
person who controls a party to this Agreement within the meaning of the
Securities Act or the Exchange Act will have the same rights to contribution as
that party, and each director or officer of the Company will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
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commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 9(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 9(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
to which a claim for contribution may be made against another party or parties
under this Section 9(d), notify such party or parties from whom contribution may
be sought, but the omission so to notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any other
obligation (x) it or they may have hereunder or otherwise than under this
Section 9(d) or (y) to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may otherwise have.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
several Managers set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, any Managers or any controlling person referred to in
Section 9 hereof and (ii) delivery of and payment for the Debentures. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 7 and 9 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. The obligations of the Managers under this Agreement may
be terminated at any time prior to the Initial Closing Date or, with respect to
the Option Debentures, on or prior to the Option Closing Date, by notice to the
Company from the Lead Managers, without liability on the part of any Manager to
the Company, if, prior to delivery and payment for the Debentures, in the sole
discretion of the Managers:
(i) the Company shall have failed, refused or been unable to perform
all obligations and satisfy all coon its part to be performed or satisfied
hereunder at or prior thereto;
(ii) trading in any equity securities of the Company shall have been
suspended by the Commission or by an exchange that lists the Common Stock;
(iii) trading in securities generally on Nasdaq, the New York Stock
Exchange, the American Stock Exchange, the over-the-counter market, the
Luxembourg Stock Exchange or the International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited shall have been
suspended or limited or minimum or maximum prices shall have been
generally established on any such exchange, or additional material
governmental
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restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by any of such exchanges or
by order of the Commission or any court or other governmental authority;
(iv) a general banking moratorium shall have been declared by any
United States federal, New York State or United Kingdom authorities; or
(v) any material adverse change in the financial or securities
markets in the United States or the United Kingdom or any outbreak or
escalation of hostilities or declaration by the United States or the
United Kingdom of a national emergency or war or other calamity or crisis
shall have occurred, the effect of any of which is such as to make it, in
the sole judgment of the Lead Managers, impracticable to proceed with the
Offering or the delivery of the Debentures on the terms and in the manner
contemplated by the Offering Circular.
Any termination pursuant to this Section 11 shall be without liability of any
party to any other party except as provided in Sections 7 and 9.
12. Notices. All communications hereunder shall be in writing and, if sent
to the Lead Managers, shall be mailed or delivered or telecopied and confirmed
in writing to their address set forth on the first page hereof, Attention: Jack
Getzelman, and if sent to the Company, shall be mailed, delivered or telecopied
and confirmed in writing to the Company at 565 Taxter Road, Elmsford, New York
10523, Attention Robert Grosser.
13. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the several Managers, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnities
of the Company contained in Section 9(a) of this Agreement shall also be for the
benefit of any person named therein and (ii) the indemnities of the Managers
contained in Section 9(b) of this Agreement shall also be for the benefit of the
persons named therein. No purchaser of Debentures shall be deemed a successor
because of such purchase. This Agreement shall not be assignable by any party
hereto without the prior written consent of the other party.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-28-
<PAGE>
16. Waiver of Jury Trial. The Company and the Managers each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
-29-
<PAGE>
If the foregoing correctly sets forth the agreement among the Company and
the Managers, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
CITYSCAPE FINANCIAL CORP.
By: /s/ Robert C. Patent
-------------------------------
Name: Robert C. Patent
Title: Executive Vice President
Accepted:
NATWEST SECURITIES LIMITED
BEAR, STEARNS & CO. INC.
CIBC WOOD GUNDY SECURITIES CORP.
WASSERSTEIN PERELLA SECURITIES, INC.
For themselves and, as Lead Managers,
for each of the several Managers
By: NATWEST SECURITIES LIMITED
By:
--------------------------------
<PAGE>
If the foregoing correctly sets forth the agreement among the Company and
the Managers, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
CITYSCAPE FINANCIAL CORP.
By:
-------------------------------
Name:
Title:
Accepted:
NATWEST SECURITIES LIMITED
BEAR, STEARNS & CO. INC.
CIBC WOOD GUNDY SECURITIES CORP.
WASSERSTEIN PERELLA SECURITIES, INC.
For themselves and, as Lead Managers,
for each of the several Managers
By: NATWEST SECURITIES LIMITED
By: /s/ Melvin Rowe
--------------------------------
Melvin Rowe
Director, Equity Capital Markets
<PAGE>
SCHEDULE I
Principal Amount
of Firm Debentures
Managers to be Purchased
-------- ---------------
NATWEST SECURITIES LIMITED $ 56,250,000
BEAR, STEARNS & CO. INC. 37,500,000
CIBC WOOD GUNDY SECURITIES CORP. 25,000,000
WASSERSTEIN PERELLA SECURITIES, INC. 6,250,000
------------
Total $125,000,000
------------
SchI-1
<PAGE>
SCHEDULE II
Activity List by Entity
- --------------------------------------------------------------------------------
Entity Incorporation Activity List
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Cityscape Financial Corp. Delaware
- --------------------------------------------------------------------------------
New York
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Cityscape Corp. New York
- --------------------------------------------------------------------------------
Arizona
- --------------------------------------------------------------------------------
California
- --------------------------------------------------------------------------------
Colorado
- --------------------------------------------------------------------------------
Connecticut
- --------------------------------------------------------------------------------
Delaware
- --------------------------------------------------------------------------------
District of Columbia
- --------------------------------------------------------------------------------
Florida
- --------------------------------------------------------------------------------
Georgia
- --------------------------------------------------------------------------------
Hawaii
- --------------------------------------------------------------------------------
Illinois
- --------------------------------------------------------------------------------
Indiana
- --------------------------------------------------------------------------------
Kansas
- --------------------------------------------------------------------------------
Kentucky
- --------------------------------------------------------------------------------
Louisiana
- --------------------------------------------------------------------------------
Maryland
- --------------------------------------------------------------------------------
Massachusetts
- --------------------------------------------------------------------------------
Michigan
- --------------------------------------------------------------------------------
Minnesota
- --------------------------------------------------------------------------------
Missouri
- --------------------------------------------------------------------------------
New Hampshire
- --------------------------------------------------------------------------------
New Jersey
- --------------------------------------------------------------------------------
SchII-1
<PAGE>
- --------------------------------------------------------------------------------
Entity Incorporation Activity List
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
New Mexico
- --------------------------------------------------------------------------------
North Carolina
- --------------------------------------------------------------------------------
Ohio
- --------------------------------------------------------------------------------
Oregon
- --------------------------------------------------------------------------------
Pennsylvania
- --------------------------------------------------------------------------------
Rhode Island
- --------------------------------------------------------------------------------
South Carolina
- --------------------------------------------------------------------------------
Tennessee
- --------------------------------------------------------------------------------
Texas
- --------------------------------------------------------------------------------
Utah
- --------------------------------------------------------------------------------
Vermont
- --------------------------------------------------------------------------------
Virginia
- --------------------------------------------------------------------------------
Washington
- --------------------------------------------------------------------------------
West Virginia
- --------------------------------------------------------------------------------
Wisconsin
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Cityscape Funding Corp. Delaware
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
City Mortgage Corporation England and Wales
Limited
- --------------------------------------------------------------------------------
Scotland
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
City Mortgage Service Limited England and Wales
- --------------------------------------------------------------------------------
Scotland
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
J&J Securities Limited England and Wales
- --------------------------------------------------------------------------------
Scotland
- --------------------------------------------------------------------------------
SchII-2
<PAGE>
SCHEDULE III
Robert Grosser
Robert C. Patent
Asher Fensterheim
Jonah L. Goldstein
Arthur Gould
Hollis W. Rademacher
Robert M. Stata
Cheryl P. Carl
Steven P. Weiss
Eric S. Goldstein
Tim S. Ledwick
David A. Steene
Martin H.S. Brand
Gerald Epstein
Jay L. Botchman
Michael Jay
David Johnson
SchIII-1
<PAGE>
EXHIBIT A
Form of Opinion of General Counsel to Issuer
(1) Each of the Subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Offering Circular; except in the State
of New Jersey where the failure to be so qualified will not have a material
adverse effect on the Company or its subsidiaries taken as a whole, each of the
subsidiaries is duly qualified to transact business in each jurisdiction in
which they conduct an Activity, as identified on the Activity List by Entity and
in all other jurisdictions, if any, in which the conduct of its business
requires such qualification, or in which the failure to qualify would have a
materially adverse effect upon the business of the Company and the Subsidiaries
taken as a whole; and the outstanding shares of capital stock of each of the
subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and, except as otherwise set forth in the Offering Circular, are
owned by the Company or a Subsidiary free and clear of all liens, encumbrances
and security interests, and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into any shares of capital stock or of ownership interests in the
Subsidiaries are outstanding.
(2) The Statements under the captions "Business - Regulation- US,"
"Management-Executive Compensation - Employment Agreements," "Certain
Transactions - General" and "Shares Eligible for Future Sales" (only to the
extent of the number of shares set forth therein) in the Offering Circular,
insofar as they are descriptions of contracts, agreements and other legal
documents, or refer to statements of law or legal conclusions, have been
reviewed by such counsel and are accurate in all material respects.
(3) Such counsel does not know of any contracts or documents that are
material to the business of the Company that are not described in the Offering
Circular and any such contracts and documents as are described in the Offering
Circular are described accurately in all material respects.
(4) Such counsel knows of no material legal proceedings pending or
threatened against the Company or any of its subsidiaries.
(5) The execution and delivery of the Subscription Agreement, and the
delivery and performance by the Company of the Indenture, the Registration
Rights Agreement and +the Debentures, the issuance, sale and delivery of the
Debentures, and the reservation for issuance of the Conversion Shares upon
conversion of the Debentures will not (i) conflict with any provision of the
certificate of incorporation or bylaws of the Company, or (ii) conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
(or will be an event which with notice or lapse of time, or both, would
constitute a default) under any agreement, contract, indenture or other
instrument known to such counsel to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries may be bound.
A-1
<PAGE>
As of the date hereof, the Company's subsidiaries have such waivers and
consents as shall be necessary to permit them to make dividends, advances and
other distributions at such times and in such amounts as shall permit the
Company to make payments in respect of the Debentures as and when they come due,
in accordance with, and subject to, the terms thereof.
Such counsel shall also state that in the course of the preparation of the
Offering Circular, such counsel participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants of the Company and the Lead Managers, at which conferences the
contents of the Offering Circular and related matters were discussed. Such
counsel may state that it did not establish or confirm factual matters and did
not verify, and therefore is not passing upon and does not assume any
responsibility for, the accuracy or completeness or fairness of the statements
contained in the Offering Circular except to the extent set forth below. On the
basis of the foregoing, and except for the financial statements and other
financial and statistical data included therein, as to which such counsel shall
express no opinion or belief, no facts have come to its attention that would
lead it to believe that the Offering Circular (or any amendment thereof or
supplement thereto made prior to the Initial Closing Date or the Option Closing
Date, as the case may be, as of the date of such amendment or supplement), taken
as a whole, as of its date or as of the date of its opinion, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering this opinion, such counsel may rely as to matters of fact on
certifications of responsible public officials.
A-2
<PAGE>
EXHIBIT B
Form of Opinion of Special Counsel to the Issuer
(1) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Offering Circular, and is duly qualified to transact business
in each jurisdiction in which it conducts an Activity, as identified on the
Activity List by Entity attached to the Subscription Agreement.
(2) The Company has authorized capital stock as set forth under the
caption "Capitalization" in the Prospectus, to such counsel's knowledge, the
information concerning the Company's outstanding capital stock as set forth
under the caption "Capitalization" in the Offering Circular (excluding the
information under "Changes in Equity Capital" as to which such counsel need
express no opinion) is accurate and complete (except for information regarding
shares issuable pursuant to the Company's stock option and purchase plans); the
authorized shares of the Company's Common Stock have been duly authorizThe
Conversion Shares initially issuable upon conversion of the Debentures have been
duly and validly authorized and reserved for issuance, and such shares, when
issued and delivered upon such conversion in the manner provided in the
Indenture will be validly issued, fully paid and nonassessable. The Stockholders
of the Company do not have preemptive or other rights to subscribe for any
shares of Common Stock or any other equity securities of the Company pursuant to
the certificate of incorporation or by-laws of the Company or by operation of
law. The capital stock of the Company, conforms to the description thereof
contained in the Offering Circular and the certificates for the Common Stock,
conform to the requirements of the Delaware General Corporation Law and the
Nasdaq National Market.
(3) The statements contained in the Offering Circular under the caption
"Certain US Federal Tax Considerations" insofar as they purport to summarize the
provisions of statutes or regulations, have been prepared or reviewed by such
counsel and such statements are accurate in all material respects; provided that
no inference shall be drawn that such counsel is giving any opinion with respect
to tax matters as they apply to any particular holder.
(4) The statements under the captions "Business - Loans - Foreclosure -
US" (fourth paragraph only), "Business - Environmental Matters - US," the last
paragraph under "Certain Transactions - General," "Description of Capital
Stock," "Description of the Debentures" and "Shares Eligible for Future Sale"
(except that such counsel need not assume responsibility for the accuracy of the
number of shares set forth thereunder in the Offering Circular), insofar as they
are descriptions of laws, regulations and rules, of contracts, agreements and
other legal documents, or refer to statements of law or legal conclusions, have
been reviewed by such counsel and are accurate in all material respects.
(5) We do not know of any contracts or documents that are material (as
identified to such counsel by the Company) to the business of the Company that
are not described in the Offering
B-1
<PAGE>
Circular and any such contracts and documents as are described in the Offering
Circular are described accurately in all material respects.
(6) Pursuant to exemptions under the 1940 Act and based upon no-action
letters issued by the staff of the Commission, the Company, or any of its
subsidiaries, is not and will not be upon and as a result of the sale of the
Debentures and the application of the proceeds therefrom as described in the
Offering Circular under the caption "Use of Proceeds," an "investment company",
as such term is defined in the 1940 Act.
(7) Such counsel knows of no material legal proceedings pending or
threatened against the Company or any of the Subsidiaries except as set forth in
the Offering Circular.
(8) The execution and delivery of the Subscription Agreement, and the
delivery and performance by the Company of the Indenture, the
Registration-Rights Agreement and the Debentures, the issuance, sale and
delivery of the Debentures and the reservation for issuance of the Conversion
Shares will not (i) conflict with any provision of the certificate of
incorporation or bylaws of the Company, or (ii) conflict with or result in a
breach of any of the terms or provisions of, or constitute a default (or will be
an event which with notice or lapse of time, or both, would constitute a
default) under any agreement, contract, indenture or other instrument identified
to such counsel by the Company as being material to the Company and its
subsidiaries.
(9) The Subscription Agreement and the Registration Rights Agreement have
each been duly authorized, executed and delivered by the Company; the
description of the Registration Rights Agreement contained in the Offering
Circular is accurate in all material respects.
(10) No approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other governmental body
is necessary in connection with the execution and delivery of the Subscription
Agreement or in connection with the execution, delivery and performance of the
Indenture, the Registration Rights Agreement or the sale of the Debentures to
the Managers pursuant to the Subscription Agreement, except such as have been
obtained and such as may be required under (i) the Securities Act and foreign
and state securities or "Blue Sky" laws, (ii) the bylaws and rules of the
National Association of Securities Dealers, Inc. (the "NASD"), (iii) the rules
of the Luxembourg Stock Exchange, (iv) the Securities Act with respect to the
registration of the Restricted Debentures and related Conversion Shares solely
insofar as such registration is required by the terms of the Debentures and the
Indenture and (v) the qualification of the Indenture and the Trustee under the
TIA.
(11) The Company has the requisite corporate power and authority, and any
approval required by law (other than as may be required by state securities and
blue sky laws as to which such counsel need express no opinion) to sell and
deliver the Debentures and issue and deliver the Conversion Shares in accordance
with and upon the terms and conditions set forth in the Subscription Agreement,
the Indenture, the Registration Rights Agreement and the Debentures, perform its
obligations under the Indenture, the Registration Rights Agreement and the
Debentures.
B-2
<PAGE>
(12) The Indenture has been duly authorized, executed and delivered, and
assuming the due authorization, execution and delivery thereof by the Trustee,
constitutes the legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or other law affecting
creditors' rights generally, and to general equitable principles); the
description of the Indenture contained in the Offering Circular is accurate in
all material respects.
(13) The Debentures are in the forms contemplated by the Indenture, and
have been duly and validly authorized by the Company, and when issued and
authenticated in accordance with the terms of the Indenture and delivered
against payment therefor in accordance with the terms of the Subscription
Agreement, will constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally, and to general equitable principles); the description of the
Debentures contained in the Offering Circular is accurate in all material
respects.
(14) Assuming the accuracy of the representations and warranties of the
Company and the Managers set forth in this Agreement, it is not necessary in
connection with the offer, sale and delivery of the Debentures in the manner
contemplated by this Agreement to register the sale of Debentures under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.
Such counsel shall also state that in the course of the preparation of the
Offering Circular, such counsel participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants of the Company and the Lead Managers, at which conferences the
contents of the Offering Circular and related matters were discussed. Because
the purpose of such counsel's professional engagement was not to establish or
confirm factual matters and because the scope of such examination of the affairs
of the Company did not include the verification of, and such counsel therefore
is not passing upon and is not assuming any responsibility for, the accuracy or
completeness or fairness of the statements contained in the Offering Circular
except to the extent set forth in paragraphs (3) and (4) above and as set forth
below. On the basis of the foregoing, and except for the financial statements
and other financial and statistical data included therein, as to which such
counsel shall express no opinion or belief, no facts have come to its attention
that would lead it to believe that the Offering Circular (or any amendment
thereof or supplement thereto made prior to the Initial Closing Date or the
Option Closing Date, as the case may be, as of the date of such amendment or
supplement), taken as a whole, as of its date or as of the date of its opinion,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
In rendering this opinion, such counsel may rely upon certificates of
responsible officers of the Company as to matters of fact.
B-3
<PAGE>
EXHIBIT C
Opinion of Counsel to the Issuer as to Certain Matters Governed by English Law
(1) Each of CMC and the subsidiaries is a company limited by shares duly
incorporated under the laws of England and, a search as described in such
opinion shall have revealed, no order or resolution for the winding up of CMC
and the subsidiaries; no notice of appointment in respect of CMC and the
subsidiaries of a liquidator, receiver, administrative receiver or
administrator; and no mortgage or charge subsisting over any of the assets of
CMC or City Mortgage Financial Services Limited.
(2) CMC has been duly organized and is validly existing as a corporation
in good standing under the laws of England, with corporate power and authority
to own its properties and conduct its business as described in the Offering
Circular and is duly qualified to transact business in all jurisdictions in
which the conduct of its business requires such qualification, or in which the
failure to qualify would have a materially adverse effect upon the business of
CMC and its subsidiaries taken as a whole and each of its subsidiaries has been
duly organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as described in the
Offering Circular; and the outstanding shares of capital stock of CMC have been
duly authorized and validly issued, are fully paid, owned by the Company and are
non-assessable except for 312,501 "A" ordinary shares of (pound)1.00 each in CMC
which are not as yet paid and subject to a (pound)1.00 per share call); and each
of its subsidiaries is duly qualified to transact business in all jurisdictions
in which the conduct of its business requires such qualification, or in which
the failure to qualify would have a materially adverse effect upon the business
of the Company and its subsidiaries taken as a whole; and the outstanding shares
of capital stock of each of its subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are owned by CMC or one of
its subsidiaries; and the outstanding shares of capital stock of each of CMC's
subsidiaries is owned free and clear of all liens, encumbrances and security
interests, and no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into any
shares of capital stock or of ownership interests in any such subsidiary are
outstanding.
(2) The statements in the Offering Circular under the captions
"Business-UK Overview," "Business - Loans - UK Originations," (second paragraph
only) "Business - Loans - Loan Underwriting - UK," (fourth paragraph only)
"Business - Loans - Foreclosures - UK," "Business Regulation - UK,"
"Business-Environmental Matters - UK," the last paragraph under "Management
Executive Compensation - Employment Agreements," and "Certain Transactions -
CSC-UK Transactions," insofar as they are descriptions of laws, regulations and
rules, of written contracts, written agreements and other legal documents, or
refer to statements of law or legal conclusions, have been reviewed by such
counsel and are accurate in all material respects.
C-1
<PAGE>
(3) The contracts and documents governed by English law which are
described in the Offering Circular are described accurately in all material
respects.
(4) Such counsel knows of no material legal proceedings pending or
threatened against the Company or CMC or any of its subsidiaries in the United
Kingdom.
(5) After due inquiry, such counsel is not aware that the execution and
delivery of the Subscription Agreement, and the delivery and performance by the
CMC of the Indenture, the Registration Rights Agreement and the Debentures, the
issuance, sale and delivery of the Debentures, and the issuance of the
Conversion Shares upon conversion of the Debentures will (i) conflict with any
provision of the certificate of incorporation or bylaws of the CMC, or (ii)
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default (or will be an event which with notice or lapse of time, or
both, would constitute a default) under any agreement, contract, indenture or
other instrument identified to such counsel by the CMC as being material to the
CMC and its subsidiaries.
Such counsel shall also state that in the course of the preparation of the
Offering Circular, such counsel participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants of the Company and the Lead Managers, at which conferences the
contents of the Offering Circular were discussed, as well as its review of
certain documents and other information, and that although such counsel cannot
guarantee, and does not assume responsibility for, the accuracy, completeness
and fairness of the statements contained or incorporated by reference in the
Offering Circular, nothing has come to its attention that would lead it to
believe that the Offering Circular (or any amendment thereof or supplement
thereto made prior to the Initial Closing Date or the Option Closing Date, as
the case may be, as of the date of such amendment or supplement), taken as a
whole, as of its date or as of the date of its opinion, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided that such counsel need
express no belief or opinion with respect to the financial statements and
related notes, financial statement schedules and other financial and statistical
data included or incorporated by reference therein or omitted therefrom.
In rendering this opinion, such counsel may rely upon certificates of
responsible officers of the Company as to matters of fact and, as to matters
governed by laws other than the laws of the United Kingdom, on opinions of local
counsel in such jurisdiction and on certifications by responsible public
officials.
C-2
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,660,401
<SECURITIES> 25,174,355
<RECEIVABLES> 43,955,434
<ALLOWANCES> 0
<INVENTORY> 61,133,898
<CURRENT-ASSETS> 0 <F1>
<PP&E> 2,794,752
<DEPRECIATION> 0
<TOTAL-ASSETS> 211,793,559
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 47,000,000
0
0
<COMMON> 144,721
<OTHER-SE> 66,145,590
<TOTAL-LIABILITY-AND-EQUITY> 211,793,559
<SALES> 0
<TOTAL-REVENUES> 28,779,068
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 11,283,504
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,698,045
<INCOME-PRETAX> 15,797,519
<INCOME-TAX> 6,524,375
<INCOME-CONTINUING> 9,273,144
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,273,144
<EPS-PRIMARY> .62
<EPS-DILUTED> .62
<FN>
<F1> The Company makes use of an unclassified balance sheet style, due to the
nature of its business. Current Assets and Current Liabilities are
therefore relected as zero in accordance with the instructions of Appendix
E to the EDGAR Filer Manual.
</FN>
</TABLE>
