<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 9, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
======================
FORM S-3
REGISTRATION STATEMENT
AND
POST-EFFECTIVE AMENDMENT
UNDER
THE SECURITIES ACT OF 1933
======================
THE MONEY STORE INC.
and the Guarantors listed on Schedule A
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
See Schedule A See Schedule A
(State of jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
2840 Morris Avenue Eric R. Elwin, Esq.
Union, New Jersey 07083 Vice President and Corporate Counsel
(908) 686-2000 2840 Morris Avenue
Union, New Jersey 07083
(Address, including zip code, (908) 686-2000
and telephone number, including
area code, of registrant's (Name, address, including zip code,
principal executive offices) and telephone number, including
area code, of agent for service)
</TABLE>
======================
Copies to:
JAMES R. TANENBAUM, ESQ.
STROOCK & STROOCK & LAVAN LLP
180 MAIDEN LANE
NEW YORK, NEW YORK 10038-4982
======================
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of
this Registration Statement.
======================
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
------------------
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
-----------------
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [X]
================================================================================
<TABLE>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C>
=======================================================================================================================
| |
| Proposed Maximum |
| Aggregate Offering | Amount of
Title of Each Class of Securities to be Registered | Price | Registration Fee
- --------------------------------------------------------------------------|---------------------|----------------------
Guarantees of Guarantors................................................. | (1) | $100
=======================================================================================================================
</TABLE>
(1) No additional consideration is being paid for the Guarantees. A registration
fee of $361,802 was previously paid upon the filing of The Money Store
Inc.'s Registration Statement on Form S-3 (File No. 33-98972). $734,146,250
of securities to be offered by The Money Store Inc. under such Registration
Statement and 1,250,000 shares of common stock of The Money Store Inc. to be
offered by the Selling Shareholder under such Registration Statement are
being carried forward to the prospectus included in this Registration
Statement.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), THE PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT IS THE
COMBINED PROSPECTUS THAT RELATES TO THE SECURITIES THAT MAY BE ISSUED PURSUANT
TO THIS REGISTRATION STATEMENT AND ALSO TO CERTAIN SECURITIES PREVIOUSLY
REGISTERED AND REMAINING UNISSUED UNDER THE MONEY STORE INC.'S REGISTRATION
STATEMENT ON FORM S-3 (FILE NO. 33-98972). THIS REGISTRATION STATEMENT
CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION NO. 33-98972, WHICH
POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE
EFFECTIVENESS OF THIS REGISTRATION STATEMENT AND IN ACCORDANCE WITH SECTION 8(c)
OF THE SECURITIES ACT.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
<PAGE>
SCHEDULE A
----------
<TABLE>
<CAPTION>
State of jurisdiction
of incorporation or I.R.S. Employer
organization Identification Number
- --------------------- ---------------------
<S> <C> <C>
New Jersey The Money Store Inc. 22-2293022
- -----------------------------------------------------------------------------------------------
<CAPTION>
State of jurisdiction
of incorporation or I.R.S. Employer
organization Guarantors Identification Number
- ---------------------- ---------- ----------------------
<S> <C> <C>
Virginia The Money Store/D.C. Inc. 22-2133027
Kentucky The Money Store/Kentucky Inc. 22-2459832
Minnesota The Money Store/Minnesota Inc. 22-3003495
Delaware The Money Store Auto Finance Inc. 22-3331186
Delaware Class Notes Inc. 22-3400682
New Jersey Dyna-Mark, Inc. 22-1920775
New Jersey Equity Insurance Agency, Inc. 22-1936537
New Jersey Major Brokerage Co., Inc. 22-1902811
California Princeton Escrow 95-3427953
Kentucky The Money Store Home Equity Corp. 22-2522232
New Jersey The Money Store Investment Corporation 22-2293019
New York The Money Store of New York Inc. 22-3143559
California The Commerce Group 68-0103196
New Jersey The Money Store Commercial Mortgage Inc. 22-2378261
New Jersey The Money Store Service Corp. 22-2293016
New Jersey TMS Mortgage Inc. 22-3217781
Delaware The Money Store U.K Inc. 91-1784015
California The Money Store Realty Inc. 68-0379803
Delaware TMS Venture Holdings, Inc. 91-1771259
</TABLE>
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 9, 1997
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL , 1997)
$250,000,000
THE MONEY STORE(R)[LOGO]
% SENIOR NOTES DUE 2002
% SENIOR NOTES DUE 2004
---------------
The % Senior Notes Due 2002 (the "Five Year Notes") of The Money Store Inc.
(the "Company") will mature on , 2002 and are not redeemable prior to
maturity. The % Senior Notes Due 2004 (the "Seven Year Notes" and,
collectively with the Five Year Notes, the "Notes") of the Company will mature
on , 2004 and are not redeemable prior to maturity. Each of the Five
Year Notes and the Seven Year Notes are sometimes referred to herein as a
"Series." Interest on each Series of Notes will be payable semiannually on
and each year, commencing , 1997. The Notes of each Series
will constitute unsecured and unsubordinated senior indebtedness of the
Company and will rank equally in right of payment, on a pari passu basis, with
the other Series of Notes and with all existing and future unsecured and
unsubordinated senior indebtedness and guarantees of the Company. Each Series
of Notes will be fully and unconditionally guaranteed (the "Subsidiary
Guarantees") on a senior unsecured basis by certain of the Company's
subsidiaries (the "Guarantors"), jointly and severally, although the
Subsidiary Guarantees may terminate prior to maturity of the Notes upon the
occurrence of certain circumstances set forth herein. The Subsidiary
Guarantees will rank equally in right of payment, on a pari passu basis, with
all existing and future unsecured and unsubordinated indebtedness and
guarantees of the Guarantors. See "Description of the Notes."
Each Series of Notes will be represented by one or more Global Notes
registered in the name of the nominee of The Depository Trust Company ("DTC").
Beneficial interests in the Global Notes will be shown on, and transfers
thereof will be effected only through, records maintained by DTC and its
participants. Except as described herein, Notes in definitive form will not be
issued. Each Series of Notes will trade in DTC's Same-Day Funds Settlement
System until maturity, and secondary market trading activity for the Notes
will, therefore, settle in immediately available funds. All payments of
principal and interest will be made by the Company in immediately available
funds. See "Description of the Notes--Same-Day Settlement and Payment."
-------------------
SEE "INVESTMENT CONSIDERATIONS" ON PAGES S-6 TO S-9 FOR A DISCUSSION OF
CERTAIN MATERIAL FACTORS WHICH SHOULD BE CONSIDERED IN CONNECTION WITH AN
INVESTMENT IN THE NOTES OFFERED HEREBY.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Five Year Note......................... % % %
- --------------------------------------------------------------------------------
Per Seven Year Note........................ % % %
- --------------------------------------------------------------------------------
Total...................................... $ $ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from April , 1997.
(2) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated to be $ .
-------------------
The Notes are offered subject to receipt and acceptance by the Underwriters,
to prior sale and to the Underwriters' right to reject any order in whole or
in part and to withdraw, cancel or modify the offer without notice. It is
expected that delivery of the Global Notes will be made through the facilities
of DTC on or about April , 1997.
-------------------
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
PRUDENTIAL SECURITIES INCORPORATED
SALOMON BROTHERS INC
APRIL , 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES OFFERED
HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT
COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE "UNDERWRITING."
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
CERTAIN INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT, THE RELATED
PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN AND THEREIN
CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SECTION 21E
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), WHICH
CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY,"
"WILL," "EXPECT," "ANTICIPATE," "ESTIMATE" OR "CONTINUE" OR THE NEGATIVES
THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. THE STATEMENTS
IN "INVESTMENT CONSIDERATIONS" ON PAGES S-6 TO S-9 OF THIS PROSPECTUS
SUPPLEMENT CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS,
INCLUDING CERTAIN RISKS AND UNCERTAINTIES, WITH RESPECT TO SUCH STATEMENTS
THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE
COMPANY TO DIFFER MATERIALLY FROM THOSE REFLECTED IN SUCH FORWARD-LOOKING
STATEMENTS.
S-2
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements appearing elsewhere and
incorporated by reference in the Prospectus and this Prospectus Supplement.
Unless the context otherwise requires, all references herein to the "Company"
include The Money Store Inc. and its wholly-owned subsidiaries. Capitalized
terms used in this Prospectus Supplement but not defined herein shall have the
meanings set forth in the Prospectus unless otherwise provided herein.
THE COMPANY
The Company is a financial services company engaged, through its
subsidiaries, in the business of originating (including purchasing), selling
and servicing consumer and commercial loans of specified types and offering
related services. Loans originated by the Company primarily consist of (i)
fixed and adjustable rate mortgage loans on residential real estate ("Home
Equity Loans"), which include FHA Title I home improvement loans insured by the
Federal Housing Authority (the "FHA") of the United States Department of
Housing and Urban Development ("HUD") and other home improvement loans not
insured by the FHA, (ii) loans guaranteed in part ("SBA Loans") by the United
States Small Business Administration (the "SBA") and commercial loans generally
secured by first mortgages ("Small Business Loans" and, together with SBA
Loans, "Commercial Loans"), (iii) government-guaranteed student loans ("Student
Loans") and (iv) motor vehicle retail installment sale contracts purchased from
automotive dealers ("Auto Loans").
For the years ended December 31, 1996 and 1995, the Company originated or
purchased approximately $5.7 billion and $3.8 billion of loans, respectively.
Of these loans, approximately 73% and 75%, respectively, by principal amount
were Home Equity Loans, approximately 11% and 12%, respectively, by principal
amount were Commercial Loans, approximately 8% and 10%, respectively, by
principal amount were Student Loans and approximately 8% and 3%, respectively,
by principal amount were Auto Loans. Management believes that during 1996 the
Company was among the largest originators, by principal amount, of Home Equity
Loans and Student Loans in the United States. Based upon government agency
sources, management believes that during each of the last 14 SBA fiscal years
the Company originated a greater principal amount of SBA Loans than any other
originator of SBA Loans in the United States.
Substantially all of the loans originated and purchased by the Company are
sold to institutional investors or pledged to the Company's lenders until the
loans can be sold and the lenders repaid. Revenue is recognized as gain on sale
of receivables, which represents the present value of the difference between
the interest charged by the Company to a borrower and the interest rate
received by the investor who purchased the loan, in excess of normal loan
servicing fees (the "Excess Servicing Spread") and non-refundable fees and
premiums on loans sold. The Company recognizes such gain on sale of receivables
in the year that the loans are sold, although cash (representing the Excess
Servicing Spread and servicing fees) is received by the Company over the lives
of the loans. The Company's practice of selling its loans is designed to
increase the Company's liquidity, reduce the need to access markets for capital
and reduce certain risks associated with interest rate fluctuations. For loans
sold during 1996 and 1995, the Excess Servicing Spread averaged approximately
3.68% and 3.65%, respectively, on Home Equity Loans, 2.09% and 2.04%,
respectively, on Commercial Loans, 1.90% and 1.63%, respectively, on Student
Loans and 10.09% and 10.60%, respectively, on Auto Loans.
The Company generally retains the right to service loans it sells or pledges.
In addition to the Excess Servicing Spread, the Company receives fees in
connection with its loan origination and servicing activities. The total
portfolio of loans which the Company services (the "Serviced Loan Portfolio")
was approximately $12.2 billion and $8.6 billion at December 31, 1996 and 1995,
respectively, consisting of approximately $11.2 billion and $7.8 billion,
respectively, of loans that had been sold with servicing rights retained,
approximately $1.0 billion and $807.7 million, respectively, of loans (the
"Retained Loan Portfolio") which the Company had not sold and approximately
$24.4 million and $29.2 million, respectively, of loans (the "Repurchased Loan
S-3
<PAGE>
Portfolio") which the Company had repurchased from investors pursuant to
contractual commitments. At December 31, 1996 and 1995, the Company's allowance
for credit losses was $240.0 million and $140.7 million, respectively. The
Retained Loan Portfolio consists of (i) Home Equity Loans, Commercial Loans,
Student Loans, Auto Loans and other loans that are warehoused pending their
sale, (ii) the unsold, unguaranteed portion of SBA Loans for which the related
guaranteed portions have been sold, (iii) certain Student Loans during the
period prior to the commencement of the borrower's repayment obligation, and
(iv) loans that the Company otherwise determines to retain.
At December 31, 1996, the Company operated out of 217 branch offices and was
doing business in 50 states, the District of Columbia and the Commonwealth of
Puerto Rico.
The Company was incorporated in New Jersey in 1974. The predecessor of the
Company, which is now a wholly-owned subsidiary of the Company, began making
Home Equity Loans in 1967. The Company's principal executive offices are
located at 2840 Morris Avenue, Union, New Jersey 07083. Its telephone number is
(908) 686-2000.
THE OFFERING
Securities Offered:
Five Year Notes............ $ aggregate principal amount of %
Senior Notes due 2002.
Seven Year Notes........... $ aggregate principal amount of %
Senior Notes due 2004.
Maturity:
Five Year Notes............ , 2002.
Seven Year Notes........... , 2004.
Interest Payment Dates...... and of each year, commencing
, 1997.
Sinking Fund................ There will be no sinking fund payments for
either Series of Notes.
Optional Redemption......... Neither Series of Notes will be redeemable
prior to maturity.
Ranking..................... The Notes of each Series will be unsecured
obligations and will rank equally in right of
payment, on a pari passu basis, with the
other Series of Notes and with all existing
and future unsecured and unsubordinated
senior indebtedness and guarantees of the
Company. Each Series of Notes will be fully
and unconditionally guaranteed on a senior
unsecured basis by the Guarantors, jointly
and severally, although the Subsidiary
Guarantees may terminate prior to maturity of
either Series of Notes upon the occurrence of
certain circumstances set forth herein. The
Subsidiary Guarantees will rank equally in
right of payment, on a pari passu basis, with
all existing and future unsecured and
unsubordinated indebtedness and guarantees of
the Guarantors. See "Description of the
Notes--General" and "--Ranking."
S-4
<PAGE>
Covenants................... Each Series of Notes contains certain
covenants which, subject to certain
limitations described herein, limit the
Company's ability to incur liens on the stock
of certain subsidiaries and restrict certain
mergers and consolidations of the Company
with other corporations and the sale of all
or substantially all of the Company's assets.
See "Description of the Notes--Covenants."
Neither Series of Notes contains any other
provisions which will restrict the Company or
any of its subsidiaries (including the
Guarantors) from incurring, assuming or
becoming liable with respect to any
indebtedness or other obligations, whether
secured or unsecured, or from paying
dividends or making other distributions on
its or their capital stock or purchasing or
redeeming its or their capital stock. Neither
Series of Notes contains any financial ratios
or specified levels of liquidity to which the
Company must adhere. In addition, neither
Series of Notes contains any provision which
requires the Company to repurchase, redeem or
modify the terms of the Notes upon a change
of control or other events involving the
Company which may adversely affect the
creditworthiness of the Notes or the
Subsidiary Guarantees.
Use of Proceeds.............
The Company intends to use the net proceeds
from the sale of the Notes for general
corporate purposes, including the repayment
of a portion of indebtedness outstanding
under the Credit Facility (as defined herein)
and existing warehouse lines. See "Use of
Proceeds."
S-5
<PAGE>
INVESTMENT CONSIDERATIONS
Prospective investors should carefully consider the following factors, in
addition to the other information contained in this Prospectus Supplement, the
accompanying Prospectus and the documents incorporated by reference herein, in
connection with an investment in the Notes offered hereby.
GENERAL LENDING RISKS. Since its initial public offering in 1991, the
Company has achieved rapid growth in revenues and net income. The financial
services business is subject to various business risks, including, but not
limited to, the following: the risk that borrowers will not satisfy their
payment obligations; the risk that, in the case of Home Equity Loans and
Commercial Loans secured by real property, appraisals of property securing
loans will not reflect the property's actual value, either due to valuation
errors or fluctuations in the value of real estate and that, upon liquidation
of real estate owned or properties securing loans, the Company may suffer a
loss; the risk that, in the case of Auto Loans, upon a default by the
borrower, the Company may not be able to repossess the related vehicle and, if
it is able to repossess the vehicle, the value of the vehicle may be
insufficient to satisfy the loan in full; and the risk that changes in
interest rates after the origination of a loan and prior to its sale may
narrow the spread between the variable interest rates the Company pays under
its warehouse lines and the interest rate paid by the borrower, and may reduce
the Excess Servicing Spread, which is not locked in until the loan is sold. A
decrease in interest rates also could cause an increase in the rate at which
outstanding loans are prepaid, reducing the period of time during which the
Company receives the Excess Servicing Spread and other servicing income with
respect to such prepaid loans. See "--Impact of Prepayment on Excess Servicing
Asset; and Other Accounting Developments." In addition, with respect to Home
Equity Loans that are junior mortgage loans, the Company's security interest
in the property securing its loan is subordinated to the interest of a senior
mortgage lender, if any. If the value of the property securing a Home Equity
Loan that is a junior mortgage loan is not sufficient to repay the borrower's
obligation to the senior mortgage holders upon foreclosure, there will be no
realizable value in such property to satisfy the borrower's obligation to the
Company. Similarly, if the value of the property securing a senior mortgage
loan declines sufficiently over time, the realizable value in such property
may be less than the borrower's obligation to the Company.
Many of the foregoing business risks become more acute in an economic
slowdown or recession, which may be accompanied by decreased demand for credit
and declining real estate and other asset values. Specifically, in the
mortgage business, any material decline in real estate values reduces the
ability of borrowers to use home equity to support borrowings and increases
the loan-to-value ratios of loans previously made by the Company, thereby
weakening collateral coverage and increasing the possibility of a loss in the
event of a default. Delinquencies, foreclosures, repossessions and losses
generally increase during economic slowdowns or recessions. Because certain of
the Company's borrowers may have had past credit problems, in the home equity
loan market, the auto loan market and certain other markets, the actual rates
of delinquencies, foreclosures, repossessions and losses, as applicable, could
be higher under adverse economic conditions than those experienced in such
markets in general. In addition, in an economic slowdown or recession, the
Company's servicing costs may increase. Any sustained period of increased
delinquencies, foreclosures, repossessions, losses or costs could adversely
affect the Company's ability to sell loans or other assets through
securitization and could increase the cost of selling loans or other assets
through securitization, which could adversely affect the Company's financial
condition or results of operations.
IMPACT OF PREPAYMENT ON EXCESS SERVICING ASSET; AND OTHER ACCOUNTING
DEVELOPMENTS. Gain on sale of receivables is the most significant component of
the Company's reported revenues. Gain on sale of receivables includes the
Excess Servicing Spread, which is based on certain estimates made by
management at the time loans are sold, including estimates regarding
prepayment rates. The rate of prepayment of loans may be affected by a variety
of economic and other factors, including prevailing interest rates and the
availability of alternative financing. The effects of these factors may vary
depending on the particular type of loan. Estimates of prepayment rates are
made based on management's expectations of future prepayment rates, which are
based, in part, on the historic performance of the Company's loans and other
considerations. There can be no assurance of the accuracy of management's
estimates. If actual prepayments occur more quickly than was projected at the
S-6
<PAGE>
time loans were sold, the carrying value of the excess servicing asset may
have to be written down through a charge to earnings in the period of
adjustment.
There can be no assurance that the implementation by the Company of
Financial Accounting Standard No. 125, which was effective January 1, 1997 and
is to be applied prospectively, will not reduce the Company's gain on sale of
receivables in the future or otherwise adversely affect the Company's results
of operations or financial condition.
NEED FOR ADDITIONAL FUNDS AND DEPENDENCE ON SECURITIZATION TO FINANCE
LENDING ACTIVITIES. The Company has a constant need for capital to finance its
lending activities. At December 31, 1996, the Company had outstanding $1.3
billion of notes payable, $796.2 million of which will mature in 1997. The
notes payable include $637.0 million principal amount of senior unsecured
notes (the "Senior Unsecured Notes"), $250.0 million of borrowings outstanding
under the Company's $400.0 million unsecured revolving credit facility (the
"Credit Facility") and $408.2 million outstanding under various warehouse
lines of credit. While the Company believes that it will be able to refinance
or otherwise repay its outstanding indebtedness, including short-term debt, in
the normal course of its business, there can be no assurance that the
Company's existing lenders will agree to refinance such debt, that other
lenders will be willing to extend lines of credit to the Company or that funds
otherwise generated from operations will be sufficient to satisfy such
obligations. Future financing may involve the issuance of additional debt
securities, Common Stock or other securities, including securities convertible
into or exercisable for Common Stock.
Since 1989, the Company has pooled and sold substantially all of the loans
or other assets which it originates or purchases through securitization
transactions as a means to improve its liquidity and to repay the Company's
warehouse lenders. Accordingly, adverse changes in the securitization market
could impair the Company's ability to originate, purchase and sell loans or
other assets on a favorable or timely basis. Any such impairment could have a
material adverse effect upon the Company's business and results of operations.
Any delay in the sale of a loan or other asset pool would postpone the
recognition of gain on such loans until their sale. Such delays could cause
the Company's earnings to fluctuate from quarter to quarter.
REGULATION OF LENDING ACTIVITIES; DEPENDENCE ON FEDERAL PROGRAMS; AND
POSSIBLE ENVIRONMENTAL LIABILITIES. The operations of the Company are subject
to extensive regulation by federal, state and local governmental authorities
and are subject to various laws and judicial and administrative decisions
imposing various requirements and restrictions, including, among other things,
regulating credit granting activities, establishing maximum interest rates,
insurance coverages and charges, requiring disclosures to customers, governing
secured transactions and setting collection, repossession and claims handling
procedures and other trade practices. There can be no assurance that more
restrictive laws, rules and regulations will not be adopted in the future
which could make compliance much more difficult or expensive, restrict the
Company's ability to originate or sell loans, further limit or restrict the
amount of interest and other charges earned under loans originated or
purchased by the Company, or otherwise adversely affect the business or
prospects of the Company. In addition, the elimination of or a substantial
reduction in the current home mortgage interest income tax deduction could
curtail the amount of Home Equity Loan originations, which could have an
adverse effect on the Company's results of operations or financial condition.
In the course of its business, the Company has acquired, and may in the
future acquire, properties through foreclosure. Primarily with respect to
commercial properties securing Commercial Loans, there is a risk that
hazardous substances or wastes could be discovered on such properties after
foreclosure. In such event, the Company might be required to remove such
substances at its sole cost and expense. There can be no assurance that the
cost of such removal would not substantially exceed the value of affected
properties or the loans secured by the properties, that the Company would have
adequate remedies against the prior owner or other responsible parties or that
the Company would not find it difficult or impossible to sell the affected
properties either prior to or following any such removal.
For the year ended December 31, 1996, of the loans originated by the
Company, approximately 11% by principal amount were Commercial Loans and
approximately 8% by principal amount were Student Loans. The
S-7
<PAGE>
discontinuation, elimination or significant reduction of guarantee levels for
the related federal programs could have a material adverse effect on the
Company's operations.
From time to time legislation has been introduced in both houses of the
United States Congress that would, among other things, abolish HUD, reduce
federal spending for housing and community development activities and
eliminate the Title I program. Other changes to HUD have been proposed, which,
if adopted, could affect the operation of the Title I program. No assurance
can be given that the Title I program will continue in existence or that HUD
will continue to receive sufficient funding for the operation of the Title I
program. Under the Omnibus Budget Reconciliation Act of 1993, Congress made a
number of changes that may affect the financial condition of the entities
which guarantee Student Loans. In addition, that legislation greatly expanded
the Federal Direct Student Loan Program volume to a target of 60% of Student
Loan demand in academic year 1998-1999, which could result in decreasing
volumes of conventional Student Loans of the type originated by the Company.
There can be no assurance that such changes will not have an adverse effect on
the Company's volume of Student Loan originations or on its ability to
securitize the Student Loans it originates due to the potential adverse impact
on the Student Loan guarantors. Further, the level of competition in the
secondary market for Student Loans could be reduced, resulting in fewer
potential buyers of Student Loans and lower prices for loans sold in the
secondary market. In addition, the United States Department of Education is
implementing a direct consolidation loan program, which may further reduce the
volume of Student Loans originated. Finally, federal legislation considered by
Congress from time to time could modify many of the provisions of existing
federal laws relating to Student Loans. Until final legislation is adopted,
the impact on the Company, if any, is impossible to determine.
STRUCTURAL SUBORDINATION; AND UNSECURED NATURE OF THE NOTES. The Company is
a holding company whose principal assets are the capital stock of its
subsidiaries. Since the Company is a holding company, its rights and the
rights of its creditors, including the holders of the Notes, except to the
extent the Company or the holders of the Notes may be creditors with
recognized claims against such subsidiaries (including under the Subsidiary
Guarantees), will rank junior to the claims of creditors of the subsidiaries
with respect to the assets and earnings of the subsidiaries. Because the
Subsidiary Guarantees may terminate prior to maturity of the Notes, there can
be no assurance that the holders of Notes will continue to have the right to
participate on a pari passu basis with the Guarantors' creditors in the assets
and earnings of any Guarantor.
In addition, as a holding company the Company's ability to meet debt service
obligations and pay operating expenses and dividends depends on receipt of
sufficient funds from its subsidiaries. There can be no assurance that the
Company's subsidiaries will not enter into financing arrangements in the
future that may restrict their ability to pay dividends to the Company.
Since the Notes are unsecured obligations of the Company, in the event of a
bankruptcy, reorganization or liquidation of the Company, there may not be
sufficient assets remaining to satisfy the claims of the holders of the Notes
after satisfying the claims of holders of the Company's indebtedness having
priority over the Notes. The Company has available warehouse lines of credit,
which are subject to renewal periodically, for warehousing of loans of $2.6
billion at December 31, 1996. The Company had outstanding $412.0 million of
secured notes payable at December 31, 1996, all of which will be effectively
senior to the Notes, of which $408.2 million was outstanding under its
warehouse lines of credit. See "Description of the Notes--Ranking."
OBLIGATIONS OF THE COMPANY UPON CERTAIN CHANGES IN CONTROL. Marc Turtletaub,
the Chief Executive Officer and President of the Company, and Alan Turtletaub,
the Chairman of the Board of Directors of the Company, beneficially own or
otherwise control an aggregate of approximately 35.5% of the outstanding
Common Stock of the Company (32.5% assuming all of the shares of the Company's
$1.72 Mandatory Convertible Preferred Stock (the "Preferred Shares") are
converted at the maximum conversion rate of one share of Common Stock per
Preferred Share). Certain of the Company's loan agreements, including the
Credit Facility and the agreements pursuant to which the Senior Unsecured
Notes were issued (the "Note Agreements"), prohibit Marc Turtletaub and Alan
Turtletaub from beneficially owning in the aggregate less than a specified
percentage of the outstanding voting stock of the Company, prohibit third
parties from beneficially owning more
S-8
<PAGE>
than a specified percentage of the outstanding voting stock of the Company
and/or prohibit certain changes in management of the Company. In the case of
the Note Agreements, violation of such provisions could require the Company to
offer to prepay such Senior Unsecured Notes or could permit the holders of 50%
of the outstanding principal amount of any issue of Senior Unsecured Notes to
declare all the outstanding Senior Unsecured Notes of such issue immediately
due and payable. A default in any of such provisions could also cause defaults
under the Credit Facility and other loan agreements. While a majority of the
executive officers relevant to such covenants have entered into employment
agreements with the Company, there can be no assurance that any or all of such
persons will remain employed with the Company. There can be no assurance that
Marc Turtletaub and Alan Turtletaub will retain the required percentages of
the voting control of the Company necessary to avoid violating such changes in
control provisions.
ABSENCE OF PUBLIC MARKET FOR THE NOTES. Each Series of Notes is a new issue
of securities with no established trading market. The Company does not intend
to apply for listing of either Series of Notes on a national securities
exchange but has been advised by the Underwriters that they presently intend
to make a market in the Notes, as permitted by applicable laws and
regulations. The Underwriters are not obligated, however, to make a market in
either Series of Notes and any such market making may be discontinued at any
time at the sole discretion of the Underwriters. Accordingly, no assurance can
be given as to the liquidity of or trading markets for either Series of Notes
or that an active public market for either Series of Notes will develop. If
active public markets for the Notes do not develop, the market prices and
liquidity of the Notes may be adversely affected.
S-9
<PAGE>
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Notes
are estimated to be $ million, after deducting underwriting discounts and
estimated offering expenses. The Company intends to use the net proceeds from
the sale of the Notes for general corporate purposes, including the repayment
of a portion of indebtedness outstanding under the Credit Facility and
existing warehouse lines. See "Underwriting." Indebtedness was incurred under
the Credit Facility for general corporate purposes, including loan
originations and purchases. Borrowings under the Credit Facility mature in
August 1999. At December 31, 1996, outstanding advances under the Credit
Facility were $250.0 million with a weighted average interest rate of 5.98%.
The Company's warehouse lines generally mature within one year and had a
weighted average interest rate of 7.48% at December 31, 1996.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at December 31, 1996 and as adjusted to give effect to the receipt by
the Company of the net proceeds from the sale of the Notes and the application
of the net proceeds therefrom to reduce outstanding indebtedness. See "Use of
Proceeds."
<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Notes payable(1)........................................ $1,319,197 $
% Senior Notes due 2002............................... --
% Senior Notes due 2004............................... --
Subordinated debt....................................... 2,000 2,000
---------- ---------
Total debt.......................................... 1,321,197
---------- ---------
Shareholders' equity:
$1.72 Mandatory Convertible Preferred Stock, no par
value;
5,290,000 shares authorized; 5,215,000 shares issued
and outstanding; $144,064,000 aggregate liquidation
value................................................ 133,363 133,363
Common stock, no par value; 250,000,000 shares
authorized;
57,791,436 shares issued and outstanding(2).......... 188,276 188,276
Retained earnings..................................... 260,870 260,870
---------- ---------
Total shareholders' equity.......................... 582,509 582,509
---------- ---------
Total capitalization................................ $1,903,706 $
========== =========
</TABLE>
- --------
(1) Includes short-term notes payable.
(2) Does not include options to purchase 3,351,226 shares of Common Stock
which were outstanding at December 31, 1996.
S-10
<PAGE>
RATIOS OF EARNINGS
The following table sets forth the ratio of earnings to fixed charges for
the Company for each of the years in the five-year period ended December 31,
1996.
The ratio of earnings to fixed charges has been computed by dividing
earnings by fixed charges. Earnings consist of income before income taxes plus
fixed charges. Fixed charges consist of interest on all indebtedness and the
portion of rental expense considered to be representative of interest.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------
1996 1995 1994 1993 1992
-------- -------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Earnings......................... $273,357 $180,389 $98,462 $71,429 $58,552
-------- -------- ------- ------- -------
Interest expense................. 124,076 93,985 43,059 29,184 31,504
Rent expense(1).................. 4,741 3,371 2,376 1,672 1,448
-------- -------- ------- ------- -------
Total fixed charges.............. $128,817 $ 97,356 $45,435 $30,856 $32,952
======== ======== ======= ======= =======
Ratio............................ 2.12x 1.85x 2.17x 2.31x 1.78x
======== ======== ======= ======= =======
</TABLE>
- --------
(1) Rent expense reflects one-third of the Company's total rent expense.
S-11
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables set forth consolidated financial data with respect to
the Company for each of the five years in the period ended December 31, 1996.
The data for each of the five years in the period ended December 31, 1996 are
derived in part from the audited Consolidated Financial Statements of the
Company. See the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, incorporated by reference herein.
CONSOLIDATED STATEMENTS OF INCOME DATA:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
REVENUES:
Gain on sale of
receivables............ $ 544,451 $ 353,995 $ 259,913 $ 159,576 $ 94,515
Finance income, fees
earned and other....... 234,211 156,563 70,557 60,233 62,791
---------- ---------- ---------- ---------- ----------
778,662 510,558 330,470 219,809 157,306
---------- ---------- ---------- ---------- ----------
EXPENSES:
Salaries and employee
benefits............... 170,296 119,423 85,596 53,844 40,831
Other operating
expenses............... 194,098 123,394 96,188 53,462 33,521
Provision for credit
losses................. 145,652 90,723 52,600 42,746 25,850
Interest................ 124,076 93,985 43,059 29,184 31,504
---------- ---------- ---------- ---------- ----------
634,122 427,525 277,443 179,236 131,706
---------- ---------- ---------- ---------- ----------
Income before income
taxes.................. 144,540 83,033 53,027 40,573 25,600
Income taxes............ 58,885 34,318 21,706 18,802 10,374
---------- ---------- ---------- ---------- ----------
Net income.............. $ 85,655 $ 48,715 $ 31,321 $ 21,771 $ 15,226
========== ========== ========== ========== ==========
Net income per common
share(1):
Primary............... $ 1.44 $ 0.95 $ 0.62 $ 0.48 $ 0.34
========== ========== ========== ========== ==========
Fully diluted......... $ 1.41 $ 0.95 $ 0.62 $ 0.48 $ 0.34
========== ========== ========== ========== ==========
Weighted average number
of common shares
outstanding(1):
Primary............... 59,085,322 51,023,609 50,804,963 45,347,486 45,168,750
========== ========== ========== ========== ==========
Fully diluted......... 60,821,321 51,023,609 50,804,963 45,347,486 45,168,750
========== ========== ========== ========== ==========
Cash dividends.......... $ 6,308 $ 3,492 $ 2,371 $ 1,688 $ 402
========== ========== ========== ========== ==========
</TABLE>
- --------
(1) Net income per common share is computed using the weighted average number
of shares of common stock outstanding during the period, after giving
effect to common stock equivalents arising from the issuance and the
assumed conversion of the Preferred Shares and the assumed exercise of
stock options. In addition, all share and per share amounts have been
restated to reflect stock splits effected by the Company.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION DATA:
<TABLE>
<CAPTION>
AT DECEMBER 31,
-------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- --------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Receivables, net............. $1,385,934 $1,029,853 $ 637,017 $570,856 $348,769
Excess servicing asset....... 806,385 524,359 319,605 224,892 158,229
Total assets................. 2,612,025 1,792,248 1,165,130 910,335 611,541
Notes payable................ 1,319,197 1,075,892 676,420 501,636 285,864
Subordinated debt............ 2,000 24,000 24,000 41,000 53,000
Shareholders' equity......... 582,509 241,126 194,263 165,313 126,155
</TABLE>
S-12
<PAGE>
OTHER SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------
1996 1995 1994 1993 1992
----------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Volume of loans
originated or
purchased.............. $ 5,693,054 $3,822,971 $2,779,408 $1,699,010 $1,007,465
Serviced loan
portfolio.............. $12,192,432 $8,621,467 $5,898,469 $3,872,708 $2,963,930
Average shareholders'
equity to average total
assets................. 18.70% 14.72% 17.33% 19.15% 19.48%
Return on average assets
(net income divided by
average total assets).. 3.89% 3.29% 3.02% 2.86% 2.50%
Return on average equity
(net income divided by
average equity)........ 20.80% 22.38% 17.42% 14.93% 12.82%
Debt to equity ratio
(notes payable plus
subordinated debt
divided by
shareholders' equity).. 2.27:1 4.56:1 3.61:1 3.28:1 2.68:1
</TABLE>
The following table sets forth certain selected operating data with respect
to the Company for each of the three years in the period ended December 31,
1996:
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------
1996 1995 1994
-------------- -------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Originations:
Home Equity Loans............... $ 4,150,992 $ 2,885,044 $ 2,013,027
Commercial Loans................ 635,498 440,728 420,416
Student Loans................... 458,459 369,129 345,965
Auto Loans...................... 448,105 128,070 --
-------------- ------------- -------------
Total originations.............. $ 5,693,054 $ 3,822,971 $ 2,779,408
============== ============= =============
Serviced Loan Portfolio:
Home Equity Loans............... $ 8,230,776 $ 5,751,677 $ 3,725,918
Commercial Loans................ 2,282,384 1,907,050 1,605,645
Student Loans................... 1,203,739 845,501 566,906
Auto Loans...................... 475,533 117,239 --
-------------- ------------- -------------
Total Serviced Loan Portfolio... $ 12,192,432 $ 8,621,467 $ 5,898,469
============== ============= =============
Charge-offs, net:
Home Equity Loans............... $ 37,039 $ 24,205 $ 19,942
Percent of total (1)........... 0.45% 0.42% 0.54%
Commercial Loans................ $ 2,553 $ 1,732 $ 1,293
Percent of total (2)........... 0.41% 0.40% 0.37%
Auto Loans...................... $ 7,474 $ 290 --
Percent of total (3)........... 1.57% 0.25% --
-------------- ------------- -------------
Total charge-offs, net.......... $ 47,066 $ 26,227 $ 21,235
============== ============= =============
</TABLE>
- --------
(1) Represents the amount of Home Equity Loans charged-off, net, as a
percentage of the Home Equity Loans in the Serviced Loan Portfolio.
(2) Represents the amount of Commercial Loans charged-off, net, as a
percentage of the unguaranteed portion of the Commercial Loans in the
Serviced Loan Portfolio.
(3) Represents the amount of Auto Loans charged-off, net, as a percentage of
the Auto Loans in the Serviced Loan Portfolio.
S-13
<PAGE>
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------------
1996 1995 1994
-------------- -------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Delinquencies:
Home Equity Loans:
30-59 days................... 1.31% 1.76% 1.77%
60-89 days................... 0.81 0.68 0.42
90 + days.................... 3.83 2.42 1.86
-------------- -------------- -------------
Total delinquencies.......... 5.95% 4.86% 4.05%
============== ============== =============
Commercial Loans:
30-59 days................... 1.08% 1.01% 0.89%
60-89 days................... 0.60 0.35 0.41
90 + days.................... 4.21 3.97 3.67
-------------- -------------- -------------
Total delinquencies.......... 5.89% 5.33% 4.97%
============== ============== =============
Auto Loans(1):
30-59 days................... 2.15% 1.60% --%
60-89 days................... 0.47 0.15 --
90 + days.................... 0.41 0.04 --
-------------- -------------- -------------
Total delinquencies.......... 3.03% 1.79% --%
============== ============== =============
Collateral owned or serviced
for others (Home Equity,
Commercial and Auto Loans) at
end of period(2).............. $ 44,785 $ 24,337 $ 25,592
============== ============== =============
Allowance for credit losses.... $ 19,895 $ 15,591 $14,014
Allowance for credit losses and
loans sold.................... 220,085 125,155 63,849
-------------- -------------- -------------
Total allowance for credit
losses...................... $ 239,980 $ 140,746 $ 77,863
============== ============== =============
</TABLE>
- --------
(1) The Company began originating Auto Loans in 1995.
(2) Includes collateral owned by trusts which have issued asset-backed
securities in the amounts of $37,586,000, $14,126,000 and $13,705,000 at
December 31, 1996, 1995 and 1994, respectively.
S-14
<PAGE>
DESCRIPTION OF THE NOTES
Each Series of Notes is to be issued under a Senior Indenture dated as of
, 1997 entered into by the Company and The Chase Manhattan Bank, as
trustee (the "Trustee"), as supplemented by the first and second supplemental
indentures (the "Indenture"). The following summaries of certain provisions of
the Notes and the Indenture, a copy of which has been incorporated by
reference as an exhibit to the Registration Statement of which the Prospectus
is a part, do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all of the provisions of the Notes and the
Indenture, including the definitions therein of certain terms. Capitalized
terms used in "Description of the Notes" have the meanings attributed to them
in the Notes or the Indenture unless otherwise defined herein.
The following description of the particular terms of each Series of Notes
offered hereby supplements and, to the extent inconsistent therewith, replaces
the description of the general terms and provisions of the Debt Securities and
the Indenture set forth in the Prospectus, to which reference is hereby made.
GENERAL
The Five Year Notes will be limited to $ million aggregate principal
amount and will mature on , 2002. The Seven Year Notes will be limited to
$ million aggregate principal amount and will mature on , 2004. Each
Series of Notes will bear interest at the rate set forth on the front cover of
this Prospectus Supplement from April , 1997, payable semi-annually on
and of each year, commencing , 1997, to the registered holders at
the close of business on the or preceding such or , whether
or not such day is a business day. Interest on each Series of Notes will be
computed on the basis of a 360-day year of twelve 30-day months.
RANKING
The Notes of each Series will be general unsecured obligations and will rank
equally in right of payment, on a pari passu basis, with the other Series of
Notes and with all existing and future unsecured and unsubordinated senior
indebtedness and guarantees of the Company. Each Series of Notes will be fully
and unconditionally guaranteed on a senior unsecured basis by the Guarantors,
jointly and severally, although the Subsidiary Guarantees may terminate prior
to the maturity of the Notes upon the occurrence of certain circumstances
described below. The Subsidiary Guarantees will rank equally in right of
payment, on a pari passu basis, with all existing and future unsecured and
unsubordinated indebtedness and guarantees of the Guarantors. At December 31,
1996, the Company had outstanding $907.2 million of unsecured notes payable
and $412.0 million of secured notes payable, the latter of which will be
effectively senior to the Notes. At December 31, 1996, the Guarantors had
outstanding guarantees with respect to substantially all of the unsecured
notes payable.
The Subsidiary Guarantees will terminate upon repayment in full of, or upon
any earlier termination for any other reason of the guarantees by the
Guarantors of, the Senior Unsecured Notes.
The Company is a holding company whose principal assets are the capital
stock of its subsidiaries. Since the Company is a holding company, its rights
and the rights of its creditors, including the holders of the Notes, except to
the extent the Company or the holders of the Notes may be creditors with
recognized claims against such subsidiaries (including under the Subsidiary
Guarantees), will rank junior to the claims of creditors of the subsidiaries
with respect to the assets and earnings of the subsidiaries. Because the
Subsidiary Guarantees may terminate prior to maturity of the Notes, there can
be no assurance that the holders of Notes will continue to have the right to
participate on a pari passu basis with the Guarantors' creditors, including
the banks under guarantees by the Guarantors of the Company's obligations
under the Credit Facility, in the assets and earnings of any Guarantor.
In addition, as a holding company the Company's ability to meet debt service
obligations and pay operating expenses and dividends depends on receipt of
sufficient funds from its subsidiaries. There can be no assurance that the
Company's subsidiaries will not enter into financing arrangements in the
future that may restrict their ability to pay dividends to the Company.
S-15
<PAGE>
Since the Notes are unsecured obligations of the Company, in the event of a
bankruptcy, reorganization or liquidation of the Company, there may not be
sufficient assets remaining to satisfy the claims of the holders of the Notes
after satisfying the claims of holders of the Company's indebtedness having
priority over the Notes. The Company has available warehouse lines of credit,
which are subject to renewal periodically, for warehousing of loans of $2.6
billion at December 31, 1996. The Company had outstanding $412.0 million at
December 31, 1996, all of which will be effectively senior to the Notes, of
which $408.2 million was outstanding under its warehouse lines of credit. See
"Investment Considerations--Structural Subordination; and Unsecured Nature of
the Notes."
The ability of the holders of the Notes or the Trustee to enforce the
Subsidiary Guarantees may be limited by certain fraudulent conveyance and
similar laws that have been enacted for the protection of creditors. The
requirements for establishing a fraudulent conveyance vary depending on the
law of the jurisdiction which is being applied. Generally, if in a bankruptcy,
reorganization, liquidation or similar proceeding in respect of a Guarantor,
or in a lawsuit by or on behalf of creditors against a Guarantor, a court were
to find that (i) a Guarantor incurred the Subsidiary Guarantee with the intent
of hindering, delaying or defrauding current or future creditors of such
Guarantor or (ii) a Guarantor received less than reasonably equivalent value
or fair consideration for incurring a Subsidiary Guarantee and either (a) was
insolvent at the time of the incurrence of such Subsidiary Guarantee, (b) was
rendered insolvent by reason of incurring such Subsidiary Guarantee, (c) was
at such time engaged or about to engage in a business or transaction for which
its assets constituted unreasonably small capital or (d) intended to incur, or
believed that it would incur, debts beyond its ability to pay such debts as
they matured, such court could declare void, in whole or in part, the
obligations of such Guarantor in connection with the Subsidiary Guarantee
and/or subordinate claims with respect to the Subsidiary Guarantee to all
other debts of such Guarantor. If the obligations of a Guarantor under its
Subsidiary Guarantee were subordinated, there can be no assurance that after
payment of the other debts of such Guarantor, there would be sufficient assets
to pay such subordinated claims with respect to its Subsidiary Guarantee.
OPTIONAL REDEMPTION
Neither Series of Notes will be redeemable prior to maturity.
SINKING FUND
There will be no sinking fund payments for either Series of Notes.
COVENANTS
Each Series of Notes contains, among others, the following covenants:
Limitation upon Merger or Consolidation. The Company may not consolidate
with or merge into any other corporation, or convey all or substantially all
of its assets as an entirety to any Person, unless (i) the corporation formed
by such consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, all or substantially all
of the assets of the Company as an entirety (the "successor corporation") is a
corporation organized and existing under the laws of the United States or any
State or the District of Columbia and expressly assumes, by a supplemental
indenture, the due and punctual payment of the principal of (and premium, if
any) and interest on all the Notes and the performance of every covenant in
the Indenture on the part of the Company to be performed or observed; (ii)
immediately after giving effect to such transaction, no Event of Default, and
no event which, after notice or lapse of time, or both, would become an Event
of Default, shall have happened and be continuing; and (iii) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
each stating that such consolidation, merger, conveyance, transfer or lease
and such supplemental indenture comply with the Indenture provisions and that
all conditions precedent therein provided for relating to such transaction
have been complied with.
For purposes of the preceding paragraph, assets of the Company which did not
account for at least 50% of the consolidated net income of the Company for its
most recent fiscal year ending prior to the consummation of such transaction
shall not in any event be deemed to be all or substantially all of the assets
of the Company.
S-16
<PAGE>
Limitation upon Liens. The Company may not create or assume, except in favor
of the Company or a Wholly-Owned Subsidiary, any pledge, lien or encumbrance
upon any stock of any Subsidiary directly owned by the Company without equally
and ratably securing the Notes.
For purposes of the preceding paragraph, Subsidiary shall mean a Subsidiary
which accounted for at least 25% of the consolidated net income of the Company
for its most recent fiscal year ending prior to the creation or assumption of
such pledge, lien or encumbrance.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the outstanding
voting stock (other than directors' qualifying shares) is at the time,
directly or indirectly, owned by the Company, or by one or more Wholly-Owned
Subsidiaries of the Company or by the Company and one or more Wholly-Owned
Subsidiaries of the Company.
Neither the Notes nor the Indenture contain any provisions other than the
foregoing which will restrict the Company or any of its subsidiaries
(including the Guarantors) from incurring, assuming or becoming liable with
respect to any indebtedness or other obligations, whether secured or
unsecured, or from paying dividends or making other distributions on its or
their capital stock or purchasing or redeeming its or their capital stock.
Neither the Notes nor the Indenture contain any financial ratios or specified
levels of liquidity to which the Company must adhere. In addition, neither the
Notes nor the Indenture contain any provision which requires the Company to
repurchase, redeem or modify the terms of the Notes upon a change in control
or other events involving the Company which may adversely affect the
creditworthiness of the Notes or the Subsidiary Guarantees.
EVENTS OF DEFAULT
Each Series of Notes shall be subject to the Events of Default set forth in
the Prospectus.
DEFEASANCE
Each Series of Notes is subject to the Company's legal defeasance option and
covenant defeasance option as set forth under "Description of Securities--Debt
Securities--Discharge, Legal Defeasance and Covenant Defeasance" in the
Prospectus.
BOOK-ENTRY, DELIVERY AND FORM
Each Series of Notes initially will be represented by one or more Global
Notes deposited with The Depository Trust Company ("DTC") and registered in
the name of DTC's nominee. Except as described in the Prospectus, each Series
of Notes will be available for purchase in denominations of $1,000 principal
amount, and integral multiples thereof, in book-entry form only. Unless and
until certificated Notes are issued under the limited circumstances described
in the Prospectus, no beneficial owner of a Note shall be entitled to receive
a definitive certificate representing a Note. So long as the Notes are
represented by the Global Notes, any payments in respect of the Notes will be
made to DTC or its nominee, as the registered owner of the Global Notes. See
"Description of Securities--Debt Securities--Book-Entry Debt Securities" in
the Prospectus.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for each Series of Notes will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be
made by the Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in same-day funds. The Notes will trade in DTC's Same-Day
Funds Settlement System until maturity, and secondary market trading activity
in the Notes will therefore be required by DTC to settle in immediately
available funds.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank is the Trustee under the Indenture and has been
appointed by the Company as Registrar and Paying Agent with respect to each
Series of Notes.
S-17
<PAGE>
UNDERWRITING
The Underwriters named below (the "Underwriters") have severally agreed,
subject to the terms and conditions contained in the Underwriting Agreement,
to purchase from the Company the principal amount of Notes set forth below
opposite their respective names:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITER OF FIVE YEAR NOTES OF SEVEN YEAR NOTES TOTAL
----------- ------------------ ------------------- ------------
<S> <C> <C> <C>
Bear, Stearns & Co.
Inc. .................. $ $ $
Lehman Brothers Inc. ...
Prudential Securities
Incorporated...........
Salomon Brothers Inc....
----------- ----------- ------------
Total................. $ $ $250,000,000
=========== =========== ============
</TABLE>
The Company is obligated to sell, and the Underwriters are obligated to
purchase, all of the Notes offered hereby if any are purchased.
The Underwriters have advised the Company that they propose to offer each
Series of Notes initially at the respective public offering prices set forth
on the cover page hereof and to certain dealers at a price that represents a
concession not in excess of % and % of the principal amount of the Five
Year Notes and the Seven Year Notes, respectively. The Underwriters may allow,
and such dealers may reallow, a concession not in excess of % and % of the
principal amount of the Five Year Notes and the Seven Year Notes,
respectively, to certain other dealers. After the initial public offering, the
public offering price and the concessions may be changed by the Underwriters.
The Company has agreed to indemnify the several Underwriters, or to
contribute to losses arising out of certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended.
Each Series of Notes is a new issue of securities with no established
trading market. The Company does not intend to apply for listing of the either
Series of Notes on a national securities exchange but has been advised by the
Underwriters that they presently intend to make a market in the Notes, as
permitted by applicable laws and regulations. The Underwriters are not
obligated, however, to make a market in either Series of Notes and any such
market making may be discontinued at any time at the sole discretion of the
Underwriters. Accordingly, no assurance can be given as to the liquidity of or
trading markets for either Series of Notes or that an active public market for
either Series of Notes will develop. If active public markets for the Notes do
not develop, the market prices and liquidity of the Notes may be adversely
affected.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation
M under the Securities Exchange Act of 1934, as amended. Over-allotment
involves syndicate sales in excess of the offering size, which creates a
syndicate short position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a specific
maximum. Syndicate covering transactions involve purchases of the Notes in the
open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim a
selling concession from a syndicate member when the Notes originally sold by
such syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Notes to be
higher than it would otherwise be in the absence of such transactions.
The Underwriters receive customary fees for ordinary brokerage transactions
with the Company and its affiliates. The Underwriters and their affiliates
have performed investment banking services in the ordinary course of their
respective businesses for the Company and its affiliates in the past, for
which they have received customary compensation, and may continue to do so in
the future.
S-18
<PAGE>
Bear Stearns Mortgage Capital Corporation, an affiliate of Bear, Stearns &
Co. Inc., provides the Company with a mortgage warehouse line of credit under
which the outstanding balance may not exceed $450 million. Prudential
Securities Credit Corp., an affiliate of Prudential Securities Incorporated,
provides the Company with various warehouse lines of credit under which the
aggregate outstanding balance may not exceed $600 million. Lehman Commercial
Paper Inc., an affiliate of Lehman Brothers Inc., provides the Company with a
warehouse line of credit under which the outstanding balance may not exceed
$750 million. The Company may use all or a portion of the net proceeds of the
offering of the Notes to repay some or all of the amounts outstanding under
one or more of such warehouse lines.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the Company
by Stroock & Stroock & Lavan LLP, New York, New York. Certain other legal
matters will be passed upon for the Company by Stroock & Stroock & Lavan LLP
and Corporate Counsel to the Company. Sills Cummis Zuckerman Radin Tischman
Epstein & Gross, P.A., New York, New York will pass upon certain legal matters
for the Underwriters. Stroock & Stroock & Lavan LLP will rely as to matters of
New Jersey law upon Corporate Counsel to the Company. Sills Cummis Zuckerman
Radin Tischman Epstein & Gross, P.A. represents the Company in certain matters
from time to time.
S-19
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 9, 1997
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
THE MONEY STORE INC.
COMMON STOCK, PREFERRED STOCK AND DEBT SECURITIES
The Money Store Inc. (the "Company") may offer from time to time, together
or separately, (i) shares of its Common Stock, no par value per share (the
"Common Stock"), (ii) shares of its preferred stock, no par value per share
(the "Preferred Stock"), (iii) its unsecured debt securities, which may be
either senior (the "Senior Debt Securities") or subordinated (the "Subordinated
Debt Securities" and, together with the Senior Debt Securities, the "Debt
Securities") (the Common Stock, the Preferred Stock and the Debt Securities are
collectively referred to herein as the "Securities"), in amounts, at prices and
on terms to be determined at the time of the offering thereof. The Subordinated
Debt Securities and Preferred Stock may be convertible or exchangeable into
other series of Debt Securities or shares of Common Stock. The Debt Securities
may be guaranteed by certain wholly-owned subsidiaries of the Company named
herein. The Securities offered pursuant to this Prospectus by the Company may
be issued in one or more series or issuances the aggregate offering price of
which will not exceed $734,146,250 (or the equivalent thereof if the Debt
Securities are denominated in one or more foreign currencies or foreign
currency units).
The Selling Shareholder (as defined herein) also may offer and sell from
time to time up to an aggregate of 1,250,000 shares of Common Stock. The
Company will not receive any of the proceeds from the sale of shares by the
Selling Shareholder.
The specific terms of the Securities in respect of which this Prospectus is
being delivered (the "Offered Securities") will be set forth in an accompanying
supplement to this Prospectus (each, a "Prospectus Supplement"), including,
where applicable, (i) in the case of Common Stock, the aggregate number of
shares offered and whether such shares will be offered by the Company and/or
the Selling Shareholder, (ii) in the case of the Preferred Stock, the specific
designation, the aggregate number of shares offered, the dividend rate (or
method of calculation thereof), the dividend period and dividend payment dates,
whether such dividends will be cumulative or noncumulative, the liquidation
preference, the voting rights, if any, any terms for optional or mandatory
redemption, any terms for conversion or exchange into other series of Debt
Securities or Common Stock and any other special terms, and (iii) in the case
of Debt Securities, the specific designation, the aggregate principal amount,
the ranking as Senior Debt Securities or Subordinated Debt Securities, the
authorized denominations, the maturity, any premium, rate or method of
calculation of interest and dates for payment thereof, any terms for optional
or mandatory redemption, any sinking fund provisions, any terms for conversion
or exchange into other series of Debt Securities or Common Stock and any other
special terms. If so specified in the applicable Prospectus Supplement, Debt
Securities of a series may be issued in whole or in part in the form of one or
more temporary or permanent global securities.
The Senior Debt Securities will rank equally with all other unsubordinated
and unsecured indebtedness of the Company. The Subordinated Debt Securities
will be subordinate in right of payment to all existing and future Senior
Indebtedness (as defined herein) of the Company.
The Company and the Selling Shareholder may sell the Securities (i) through
underwriting syndicates represented by managing underwriters, or by
underwriters without a syndicate, with such underwriters to be designated at
the time of sale, (ii) through agents designated from time to time, or (iii)
directly. The names of any underwriters or agents of the Company or of the
Selling Shareholder involved in the sale of the Securities, the public offering
price or purchase price thereof, any applicable commissions or discounts, any
other terms of the offering of such Securities and the net proceeds to the
Company or to the Selling Shareholder from such sale, will be set forth in the
applicable Prospectus Supplement.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
------------
April , 1997
<PAGE>
FOR NORTH CAROLINA PURCHASERS: THE COMMISSIONER OF INSURANCE FOR THE STATE
OF NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING, NOR HAS THE
COMMISSIONER ACTED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the following
public reference facilities maintained by the Commission: Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; Seven World Trade
Center, Suite 1300, New York, New York 10048; and the Citibank Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material may also be obtained by mail from the Public Reference Station of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, upon payment of prescribed rates. In addition, such materials may
be accessed electronically at the Commission's site on the World Wide Web
located at http://www.sec.gov. Reports, proxy statements and other information
concerning the Company also may be inspected at the offices of the National
Association of Securities Dealers, Inc. 1735 K Street, N.W., Washington, D.C.
20006.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement and related exhibits for further
information with respect to the Company and the securities offered hereby.
Statements contained herein concerning the provisions of any document are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference. These documents may be inspected without charge at the office
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and copies may be obtained at fees and charges prescribed by the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1996;
(b) The Company's Current Report on Form 8-K dated April 9, 1997; and
(c) The Company's Registration Statements on Form 8-A with respect to the
Common Stock and the $1.72 Mandatory Convertible Preferred Stock
(No. 1-10785).
All reports and any definitive proxy or information statements filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified, or superseded, to
constitute a part of this Prospectus.
2
<PAGE>
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER
THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO ERIC R. ELWIN, ESQ., VICE PRESIDENT AND CORPORATE COUNSEL, 2840
MORRIS AVENUE, UNION, NEW JERSEY, 07083. TELEPHONE REQUESTS MAY BE DIRECTED TO
ERIC R. ELWIN, ESQ. AT (908) 686-2000.
3
<PAGE>
THE COMPANY
The Company is a financial services company engaged, through its
subsidiaries, in the business of originating (including purchasing), selling
and servicing consumer and commercial loans of specified types and offering
related services. Loans originated by the Company primarily consist of (i)
fixed and adjustable rate mortgage loans on residential real estate ("Home
Equity Loans"), (ii) loans guaranteed in part ("SBA Loans") by the United
States Small Business Administration (the "SBA") and commercial loans
generally secured by first mortgages ("Small Business Loans" and, together
with SBA Loans, "Commercial Loans"), (iii) government-guaranteed student loans
("Student Loans") and (iv) motor vehicle retail installment sale contracts
purchased from automotive dealers ("Auto Loans").
For the year ended December 31, 1996, the Company originated or purchased
approximately $5.7 billion of loans. Of these loans, approximately 73% by
principal amount were Home Equity Loans, approximately 11% by principal amount
were Commercial Loans, approximately 8% by principal amount were Student Loans
and approximately 8% by principal amount were Auto Loans. Based upon
government agency sources, management believes that during each of the last 14
SBA fiscal years the Company originated a greater principal amount of SBA
Loans than any other originator of SBA Loans in the United States.
Substantially all of the loans originated and purchased by the Company are
sold to institutional investors or pledged to the Company's lenders until the
loans can be sold and the lenders repaid. Revenue is recognized as gain on
sale of receivables, which represents the present value of the difference
between the interest charged by the Company to a borrower and the interest
rate received by the investor who purchased the loan, in excess of normal loan
servicing fees (the "Excess Servicing Spread") and non-refundable fees and
premiums on loans sold. The Company recognizes such gain on sale of
receivables in the year that the loans are sold, although cash (representing
the Excess Servicing Spread and servicing fees) is received by the Company
over the lives of the loans. The Company's practice of selling its loans is
designed to increase the Company's liquidity, reduce the need to access
markets for capital and reduce certain risks associated with interest rate
fluctuations. For loans sold during 1996, the Excess Servicing Spread averaged
approximately 3.68% on Home Equity Loans, 2.09% on Commercial Loans, 1.90% on
Student Loans and 10.09% on Auto Loans.
The Company generally retains the right to service loans it sells or
pledges. In addition to the Excess Servicing Spread, the Company receives fees
in connection with its loan origination and servicing activities. The total
portfolio of loans which the Company services (the "Serviced Loan Portfolio")
was approximately $12.2 billion at December 31, 1996, consisting of $11.2
billion of loans that had been sold with servicing rights retained, $1.0
billion of loans (the "Retained Loan Portfolio") which the Company has not
sold and approximately $24.4 million of loans (the "Repurchased Loan
Portfolio") which the Company has repurchased from investors pursuant to
contractual commitments. The Retained Loan Portfolio consists of (i) Home
Equity Loans, Commercial Loans, Student Loans, Auto Loans and other loans that
are warehoused pending their sale, (ii) the unsold unguaranteed portion of SBA
Loans for which the related guaranteed portions have been sold, (iii) certain
Student Loans during the period prior to the commencement of the borrower's
repayment obligation, and (iv) loans that the Company otherwise determines to
retain.
At December 31, 1996, the Company operated out of 217 branch offices and
was doing business in 50 states, the District of Columbia and the Commonwealth
of Puerto Rico.
The Company was incorporated in New Jersey in 1974. The predecessor of the
Company, which is now a wholly-owned subsidiary of the Company, began making
Home Equity Loans in 1967. The Company's principal executive offices are
located at 2840 Morris Avenue, Union, New Jersey 07083. Its telephone number
is (908) 686-2000.
4
<PAGE>
RATIOS OF EARNINGS
The following table sets forth the ratio of earnings to fixed charges for
the Company for each of the years in the five-year period ended December 31,
1996.
The ratio of earnings to fixed charges has been computed by dividing
earnings by fixed charges. Earnings consist of income before income taxes plus
fixed charges. Fixed charges consist of interest on all indebtedness and the
portion of rental expense considered to be representative of interest.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994 1993 1992
-------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Earnings.......................... $273,357 180,389 $98,462 $71,429 $58,552
-------- ------- ------- ------- -------
Interest expense.................. 124,076 93,985 43,059 29,184 31,504
Rent expense(1)................... 4,741 3,371 2,376 1,672 1,448
-------- ------- ------- ------- -------
Total fixed charges............... $128,817 $97,356 $45,435 $30,856 $32,952
======== ======= ======= ======= =======
Ratio 2.12x 1.85x 2.17x 2.31x 1.78x
======== ======= ======= ======= =======
</TABLE>
- --------
(1) Rent expense reflects one-third of the Company's total rent expense.
USE OF PROCEEDS
Except as may otherwise be set forth in the applicable Prospectus
Supplement, the net proceeds from the sale of the Offered Securities will be
used for general corporate purposes. The Company will not receive any of the
proceeds from the sale of shares of Common Stock by the Selling Shareholder.
5
<PAGE>
SELLING SHAREHOLDER
The Selling Shareholder is Marc Turtletaub, the President and Chief
Executive Officer and a Director of the Company. The following table sets
forth certain information with respect to the Selling Shareholder's beneficial
ownership of Common Stock, as adjusted to reflect the sale by him of the
shares registered for sale, at February 1, 1997.
<TABLE>
<CAPTION>
SHARES SHARES BENEFICIALLY
BENEFICIALLY OWNED IF ALL
OWNED PRIOR TO REGISTERED SHARES
OFFERING NUMBER OF SHARES ARE SOLD
------------------ BEING REGISTERED -----------------------
SELLING SHAREHOLDER NUMBER PERCENT FOR SALE NUMBER PERCENT
- ------------------- ---------- ------- ---------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Marc Turtletaub....... 19,969,750 34.5% 1,250,000 18,719,750 32.3%
</TABLE>
Marc Turtletaub is a general partner in a general partnership with Alan
Turtletaub, the Chairman of the Board of Directors of the Company, which has a
one-third interest in a joint venture which is the lessor of the Company's
corporate headquarters in Union, New Jersey. During the past three years, the
Company has occupied approximately 50,000 square feet in Union under a lease
recently extended to the year 2000. The annual rent under the lease, subject
to certain adjustments, is approximately $1,200,000.
From 1990 to 1993, Commercial Capital Co., Inc., a subsidiary of the
Company ("CCC"), provided a secured revolving credit facility (the "MTGB
Facility") to MTGB Partners ("MTGB"), a general partnership whose partners
were Marc Turtletaub and another individual who was neither affiliated with
the Company nor related to any Director or officer of the Company. The maximum
amount of the MTGB Facility was $5 million and such facility bore interest at
prime plus 2% per annum, adjusted quarterly. The term of the MTGB Facility
expired on the earlier to occur of September 30, 1995 or the date of sale of
all real property owned by Delta Diamond Oaks IV ("Delta Diamond"), a
California limited partnership, or of MTGB's direct or indirect interest in
Delta Diamond. MTGB repaid the facility in 1993.
DESCRIPTION OF SECURITIES
GENERAL
The following description of the terms of the Securities sets forth certain
general terms and provisions of the Securities to which any Prospectus
Supplement may relate. The particular terms of the Securities offered by any
Prospectus Supplement and the extent, if any, to which such general provisions
may apply to the Securities so offered will be described in the Prospectus
Supplement relating to such Securities.
COMMON STOCK
General
The Company has 100,000,000 shares of authorized Common Stock, no par value
per share. Holders of the Company's Common Stock are entitled to receive such
dividends as may be legally declared by the Board of Directors. The Company
has paid a quarterly dividend on its Common Stock since November 1992. The
Company anticipates continuing this quarterly dividend program. Holders of the
Common Stock are entitled to one vote for each share held of record. Action of
the stockholders may generally be taken by the affirmative vote of a majority
of the shares present or represented at a duly called meeting at which a
quorum is present or represented. Holders of Common Stock have no preemptive
or subscription rights and have no liability for further calls or assessments.
All shares of Common Stock are entitled to share ratably in the net assets of
the Company upon liquidation. The transfer agent and registrar for the Common
Stock is Registrar and Transfer Company of Cranford, New Jersey.
6
<PAGE>
DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be
described in the Prospectus Supplement relating to such Debt Securities.
The Senior Debt Securities are to be issued under an indenture, as
supplemented from time to time (the "Senior Indenture"), between the Company
and The Chase Manhattan Bank, as Trustee (the "Senior Trustee"). The
Subordinated Debt Securities are to be issued under an indenture as
supplemented from time to time (the "Subordinated Indenture"), between the
Company and The Bank of New York, as Trustee (the "Subordinated Trustee"). The
term "Trustee" as used herein shall refer to either the Senior Trustee or the
Subordinated Trustee, as appropriate, for Senior Debt Securities or
Subordinated Debt Securities. The Senior Indenture and the Subordinated
Indenture (being referred to herein collectively as the "Indentures" and
individually as an "Indenture") are filed as exhibits to the Registration
Statement. The Indentures are subject to and governed by the Trust Indenture
Act of 1939, as amended (the "TIA").
The statements made under this heading relating to the Debt Securities and
the Indentures are summaries of the provisions thereof, do not purport to be
complete and are qualified in their entirety by reference to the Indentures,
including the definitions of certain terms therein and in the TIA. Certain
capitalized terms used below but not defined herein have the meanings ascribed
to them in the applicable Indenture. Unless otherwise noted below, section
references below are to both Indentures.
The particular terms of the Debt Securities being offered (the "Offered
Debt Securities"), any modifications of or additions to the general terms of
the Debt Securities as described herein that may be applicable in the case of
the Offered Debt Securities and any applicable federal income tax
considerations will be described in the Prospectus Supplement relating to the
Offered Debt Securities. Accordingly, for a description of the terms of the
Offered Debt Securities, reference must be made both to the Prospectus
Supplement relating thereto and the description of Debt Securities set forth
in this Prospectus.
General
The Debt Securities will be direct, unsecured obligations of the Company.
The indebtedness represented by the Senior Debt Securities will rank equally
with all other unsecured and unsubordinated indebtedness of the Company. The
indebtedness represented by the Subordinated Debt Securities will be
subordinated in right of payment to the prior payment in full of the Senior
Indebtedness of the Company (including the Senior Debt Securities) as
described under "--Debt Securities--Subordination" below. The Debt Securities
may be issued in one or more series. The respective Indentures provide that
there is no limitation on the amount of debt securities that may be issued
thereunder from time to time.
The Company primarily conducts its operations through its Subsidiaries. The
rights of the Company and its creditors, including the Holders of the Debt
Securities, to participate in the assets of any Subsidiary upon the latter's
liquidation or reorganization will be subject to the prior claims of the
Subsidiary's creditors except to the extent that the Company may itself be a
creditor with recognized claims against the Subsidiary.
The accompanying Prospectus Supplement will set forth the terms of the
Offered Debt Securities, which may include the following:
(1)The title of the Offered Debt Securities and whether they are
Senior Debt Securities or Subordinated Debt Securities.
(2)The aggregate principal amount of the Offered Debt Securities and
any limit on the aggregate principal amount of the Offered Debt
Securities.
7
<PAGE>
(3)The percentage of the principal amount at which the Offered Debt
Securities will be issued and, if other than the principal amount
thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity thereof or the method by
which such portion shall be determined.
(4)The date or dates on which or periods during which the Offered Debt
Securities may be issued, and the date or dates, or the method by which
such date or dates will be determined, on which the principal of (and
premium, if any, on) the Offered Debt Securities will be payable.
(5)The rate or rates at which the Offered Debt Securities will bear
interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest, if any, shall
accrue or the method by which such date or dates shall be determined, the
interest payment dates on which such interest will be payable and, if the
Offered Debt Securities are Registered Securities, the regular record
dates, if any, for the interest payable on such interest payment dates,
and, if the Offered Debt Securities are floating rate securities, the
notice, if any, to Holders regarding the determination of interest and
the manner of giving such notice.
(6)The place or places where the principal of (and premium, if any)
and interest on the Offered Debt Securities shall be payable; the extent
to which, or the manner in which, any interest payable on any Global Note
(as defined below) on an interest payment date will be paid, and the
manner in which any principal of, or premium, if any, on, any Global Note
will be paid.
(7)The obligation, if any, of the Company to redeem, repay or purchase
the Offered Debt Securities pursuant to any mandatory redemption, sinking
fund or analogous provisions or at the option of the Holder thereof and
the period or periods within which, or the dates on which, the prices at
which and the terms and conditions upon which the Offered Debt Securities
shall be redeemed, repaid or purchased, in whole or in part, pursuant to
such obligation.
(8)The right, if any, of the Company to redeem the Offered Debt
Securities at its option and the period or periods within which, or the
date or dates on which, the price or prices at which, and the terms and
conditions upon which Offered Debt Securities may be redeemed, if any, in
whole or in part, at the option of the Company or otherwise.
(9)If the coin or currency in which the Offered Debt Securities shall
be issuable is U.S. dollars, the denominations of the Offered Debt
Securities if other than denominations of $1,000 and any integral
multiple thereof.
(10)Whether the Offered Debt Securities are to be issued as original
issue discount securities ("Discount Securities") and the amount of
discount at which such Offered Debt Securities may be issued and, if
other than the principal amount thereof, the portion of the principal
amount of Offered Debt Securities which shall be payable upon declaration
of acceleration of the Maturity thereof upon an Event of Default.
(11)Provisions, if any, for the defeasance of Offered Debt Securities
or certain of the Company's obligations with respect to the Offered Debt
Securities.
(12)Whether the Offered Debt Securities are to be issued as Registered
Securities or Bearer Securities or both, and, if Bearer Securities are
issued, whether any interest coupons appertaining thereto ("Coupons")
will be attached thereto, whether such Bearer Securities may be exchanged
for Registered Securities and the circumstances under which, and the
place or places at which, any such exchanges, if permitted, may be made.
(13)Whether provisions for payment of additional amounts or tax
redemptions shall apply and, if such provisions shall apply, such
provisions; and, if any of the Offered Debt Securities are to be issued
as Bearer Securities, the applicable procedures and certificates relating
to the exchange of temporary Global Notes for definitive Bearer
Securities.
8
<PAGE>
(14)If other than U.S. dollars, the currency, currencies or currency
units (the term "currency" as used herein will include currency units) in
which the Offered Debt Securities shall be denominated or in which
payment of the principal of (and premium, if any) and interest on the
Offered Debt Securities may be made, and particular provisions applicable
thereto and, if applicable, the amount of Offered Debt Securities which
entitles the Holder of an Offered Debt Security or its proxy to one vote
for purposes of voting at a meeting of Holders of the Offered Debt
Securities.
(15)If the principal of (and premium, if any) or interest on the
Offered Debt Securities is to be payable, at the election of the Company
or a Holder thereof, in a currency other than that in which the Debt
Securities is denominated or payable without such election, in addition
to or in lieu of the applicable provisions of the Indentures, the period
or periods within which and the terms and conditions upon which, such
election may be made and the time and the manner of determining the
exchange rate or rates between the currency or currencies in which the
Offered Debt Securities are denominated or payable without such election
and the currency or currencies in which the Offered Debt Securities are
to be paid if such election is made.
(16)The date as of which any Offered Debt Securities shall be dated.
(17)If the amount of payments of principal of (and premium, if any) or
interest on the Offered Debt Securities may be determined with reference
to an index, including, but not limited to, an index based on a currency
or currencies other than that in which the Offered Debt Securities are
denominated or payable, or any other type of index, the manner in which
such amounts shall be determined.
(18)If the Offered Debt Securities are denominated or payable in
foreign currency, any other terms concerning the payment of principal of
(and premium, if any) or any interest on the Offered Debt Securities
(including the currency or currencies of payment thereof).
(19)The designation of the original Currency Determination Agent, if
any.
(20)The applicable Overdue Rate, if any.
(21)If the Offered Debt Securities do not bear interest, the
applicable dates upon which the Company will furnish or cause to be
furnished to the Trustee a list of the names and addresses of the
Registered Holders of the Offered Debt Securities.
(22)Any addition to, or modification or deletion of, any Events of
Default or covenants provided for in the applicable Indenture with
respect to the Offered Debt Securities.
(23)If any of the Offered Debt Securities are to be issued as Bearer
Securities, (x) whether interest in respect of any portion of a temporary
Offered Debt Security in global form (representing all of the Outstanding
Bearer Securities of the series) payable in respect of any interest
payment date prior to the exchange of such temporary Offered Debt
Security for definitive Offered Debt Securities shall be paid to any
clearing organization with respect to the portion of such temporary
Offered Debt Security held for its account and, in such event, the terms
and conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such interest
payment date, (y) the terms upon which interests in such temporary
Offered Debt Security in global form may be exchanged for interests in a
permanent Global Note or for definitive Offered Debt Securities and the
terms upon which interests in a permanent Global Note, if any, may be
exchanged for definitive Offered Debt Securities and (z) the cities in
which the Authorized Newspapers designated for the purposes of giving
notices to Holders are published.
(24)Whether the Offered Debt Securities shall be issued in whole or in
part in the form of one or more Global Notes and, in such case, the
depositary or any common depositary for such Global Notes; and if the
Offered Debt Securities are issuable only as Registered Securities, the
manner in which and the circumstances under which Global Notes
representing Offered Debt Securities may be exchanged for Registered
Securities in definitive form.
9
<PAGE>
(25)The designation, if any, of any depositaries, trustees (other than
the applicable Trustee), paying agents, authenticating agents, security
registrars (other than the applicable Trustee) or other agents with
respect to the Offered Debt Securities.
(26)If the Offered Debt Securities are to be issuable in definitive
form only upon receipt of certain certificates or other documents or upon
satisfaction of certain conditions, the form and terms of such
certificates, documents or conditions.
(27)If the Offered Debt Securities are Subordinated Debt Securities,
whether they will be convertible or exchangeable into another series of
Debt Securities or shares of Common Stock and, if so, the terms and
conditions, which may in addition to or in lieu of the provisions
contained in the Subordinated Indenture, upon which such Offered Debt
Securities will be so convertible or exchangeable, including the
conversion or exchange price and the conversion or exchange period.
(28)Any other terms of the Offered Debt Securities not specified in
the Indenture under which such Offered Debt Securities are to be issued
(which other terms shall not be inconsistent with the provisions of such
Indenture).
(29)Whether the Offered Debt Securities will be guaranteed by the
Subsidiary Guarantors named herein under "--Subsidiary Guarantees."
The Debt Securities may be issued in one or more series under the
Indentures, in each case as authorized from time to time by the Board of
Directors of the Company, or any committee thereof or any duly authorized
officer or pursuant to any modification of an Indenture. (Section 3.01)
In the event that Discount Securities are issued, the Federal income tax
consequences and other special considerations applicable to such Discount
Securities will be described in the Prospectus Supplement relating thereto.
The general provisions of the Indentures do not contain any provisions that
would limit the ability of the Company or its Subsidiaries to incur
indebtedness or that would afford holders of Debt Securities protection in the
event of a highly leveraged or similar transaction involving the Company or
its Subsidiaries. Reference is made to the accompanying Prospectus Supplement
for information with respect to any deletions from, modifications of or
additions, if any, to the Events of Default or covenants of the Company
described below that are applicable to the Offered Debt Securities, including
any addition of covenants or other provisions providing event risk or similar
protection.
All of the Debt Securities of a series need not be issued at the same time,
and may vary as to denomination, interest rate, maturity and other provisions
and unless otherwise provided, a series may be reopened for issuance of
additional Debt Securities of such series. (Section 3.01)
Denominations, Registration and Transfer
Unless specified in the Prospectus Supplement, the Debt Securities of any
series shall be issuable only as Registered Securities in denominations of
$1,000 and any integral multiple thereof and shall be payable only in U.S.
dollars. (Section 3.02) The Indentures also provide that Debt Securities of a
series may be issuable in global form. See "--Debt Securities--Book-Entry Debt
Securities." Unless otherwise indicated in the Prospectus Supplement, Bearer
Securities (other than in global form) will have Coupons attached. (Section
2.01)
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of like aggregate principal amount
and of like Stated Maturity and with like terms and conditions. If so
specified in the Prospectus Supplement, at the option of the Holder thereof,
to the extent permitted by law, any Bearer Security of any series which by its
terms is registrable as to principal and interest may be exchanged for a
Registered Security of such series of like aggregate principal amount and of a
like Stated Maturity and with like terms and conditions, upon surrender of
such Bearer Security at the corporate trust office of the applicable Trustee
or at any other office or agency of the Company designated for the purpose of
making any such exchanges. Subject to certain exceptions, any Bearer Security
issued with Coupons surrendered for exchange
10
<PAGE>
must be surrendered with all unmatured Coupons and any matured Coupons in
default attached thereto. (Section 3.05)
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States
income tax laws and regulations applicable to Debt Securities in effect at the
time of such exchange. (Section 3.05)
Except as otherwise specified in the Prospectus Supplement, in no event may
Registered Securities, including Registered Securities received in exchange
for Bearer Securities, be exchanged for Bearer Securities. (Section 3.05)
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency of the Company maintained for such purpose,
the Company shall deliver, in the name of the designated transferee, one or
more new Registered Securities of the same series of like aggregate principal
amount of such denominations as are authorized for Registered Securities of
such series and of a like Stated Maturity and with like terms and conditions.
No service charge will be made for any transfer or exchange of Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. (Section
3.05)
The Company shall not be required to (i) register, transfer or exchange
Debt Securities of any series during a period beginning at the opening of
business 15 days before the day of the transmission of a notice of redemption
of Debt Securities of such series selected for redemption and ending at the
close of business on the day of such transmission, or to (ii) register,
transfer or exchange any Debt Security so selected for redemption in whole or
in part, except the unredeemed portion of any Debt Security being redeemed in
part. (Section 3.05)
Events of Default
Under the Indentures, "Event of Default" with respect to the Debt
Securities of any series means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law, pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (1) default in the payment of any
interest upon any Debt Security or any payment with respect to the Coupons, if
any, of such series when it becomes due and payable, and continuance of such
default for a period of 30 days; (2) default in the payment of the principal
of (and premium, if any, on) any Debt Security of such series at its Maturity;
(3) default in the deposit of any sinking fund payment, when and as due by the
terms of a Debt Security of such series; (4) default in the performance, or
breach of any covenant or warranty in the applicable Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in the applicable Indenture specifically dealt with or which
expressly has been included in the applicable Indenture solely for the benefit
of Debt Securities of a series other than such series), and continuance of
such default or breach for a period of 60 days after there has been given to
the Company by the applicable Trustee or to the Company and the applicable
Trustee by the Holders of at least 25% in principal amount of the Outstanding
Debt Securities of such series, a written notice specifying such default or
breach and requiring it to be remedied; (5) certain events of bankruptcy,
insolvency or reorganization with respect to the Company; or (6) any other
Event of Default provided with respect to Debt Securities of that series
pursuant to the applicable Indenture. (Section 5.01)
Each Indenture requires the Company to file with the applicable Trustee,
annually, an officers' certificate as to the Company's compliance with all
conditions and covenants under the applicable Indenture. (Section 12.02) Each
Indenture provides that the applicable Trustee may withhold notice to the
Holders of a series of Debt Securities of any default (except payment defaults
on such Debt Securities) if it considers such withholding to be in the
interest of the Holders of such series of Debt Securities to do so. (Section
6.02)
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then in every case the applicable
Trustee or the Holders of not less than 25% in principal amount of
11
<PAGE>
the Outstanding Debt Securities of such series may declare the principal
amount (or, if any Debt Securities of such series are Discount Securities,
such portion of the principal amount of such Discount Securities as may be
specified in the terms of such Discount Securities) of the Debt Securities of
such series to be due and payable immediately, by a notice in writing to the
Company (and to the applicable Trustee if given by Holders), and upon any such
declaration such principal amount (or specified amount), plus accrued and
unpaid interest (and premium, if any) shall become immediately due and
payable. Upon payment of such amount in the currency in which such Debt
Securities are denominated (except as otherwise provided in the applicable
Indenture or specified in the Prospectus Supplement), all obligations of the
Company in respect of the payment of principal of the Debt Securities of such
series shall terminate. (Section 5.02)
Subject to the provisions of each Indenture relating to the duties of the
applicable Trustee, in case an Event of Default with respect to Debt
Securities of a particular series shall occur and be continuing, the
applicable Trustee shall be under no obligation to exercise any of its rights
or powers under such Indenture at the request, order or direction of any of
the Holders of Debt Securities of that series, unless such Holders shall have
offered to the applicable Trustee reasonable indemnity against the expenses
and liabilities which might be incurred by it in compliance with such request.
(Section 5.07) Subject to such provisions for the indemnification of the
applicable Trustee, the Holders of a majority in principal amount of the
Outstanding Debt Securities of such series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the applicable Trustee under such Indenture, or exercising any trust or
power conferred on the applicable Trustee with respect to the Debt Securities
of that series provided that such direction does not conflict with law or with
the applicable Indenture. (Section 5.12)
At any time after such a declaration of acceleration with respect to Debt
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the applicable Trustee as
provided in the Indentures, the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series, by written notice to the
Company and the applicable Trustee, may rescind and annul such declaration and
its consequences if (1) the Company has paid or deposited with the applicable
Trustee a sum in the currency in which such Debt Securities are denominated
(except as otherwise provided in the applicable Indenture or specified in the
Prospectus Supplement) sufficient to pay (A) all overdue installments of
interest on all Debt Securities or all overdue payments with respect to any
Coupons of such series, (B) the principal of (and premium, if any, on) any
Debt Securities of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Debt Securities, (C) to the extent that payment of
such interest is lawful, interest upon overdue installments of interest on
each Debt Security of such series or upon overdue payments on any Coupons of
such series at a rate established for such series, and (D) all sums paid or
advanced by the applicable Trustee and the reasonable compensation, expenses,
disbursements and advances of the applicable Trustee, its agents and counsel;
and (2) all Events of Default with respect to Debt Securities of such series,
other than the nonpayment of the principal of Debt Securities of such series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in the applicable Indenture. No such rescission
and waiver will affect any subsequent default or impair any right consequent
thereon. (Section 5.02)
Modification or Waiver
Without prior notice to or consent of any Holders, the Company and the
applicable Trustee, at any time and from time to time, may modify the
applicable Indenture for any of the following purposes: (1) to evidence the
succession of another corporation to the rights of the Company and the
assumption by such successor of the covenants and obligations of the Company
in the applicable Indenture and in the Debt Securities and Coupons, if any,
issued thereunder; (2) to add to the covenants of the Company for the benefit
of the Holders of all or any series of Debt Securities and the Coupons, if
any, appertaining thereto (and if such covenants are to be for the benefit of
less than all series, stating that such covenants are expressly being included
solely for the benefit of such series), or to surrender any right or power
conferred in the applicable Indenture upon the Company; (3) to add any
additional Events of Default (and if such Events of Default are to be
applicable to less than all series,
12
<PAGE>
stating that such Events of Default are expressly being included solely to be
applicable to such series); (4) to add or change any of the provisions of the
applicable Indenture to such extent as shall be necessary to permit or
facilitate the issuance thereunder of Debt Securities of any series in bearer
form, registrable or not registrable, and with or without Coupons, to permit
Bearer Securities to be issued in exchange for Registered Securities, to
permit Bearer Securities to be issued in exchange for Bearer Securities of
other authorized denominations or to permit the issuance of Debt Securities of
any series in uncertificated form, provided that any such action shall not
adversely affect the interests of the Holders of Debt Securities of any series
or any related Coupons in any material respect; (5) to change or eliminate any
of the provisions of the applicable Indenture, provided that any such change
or elimination will become effective only when there is no Outstanding Debt
Security issued thereunder or Coupon of any series created prior to such
modification which is entitled to the benefit of such provision and as to
which such modification would apply; (6) to secure the Debt Securities issued
thereunder; (7) to supplement any of the provisions of the applicable
Indenture to such extent as is necessary to permit or facilitate the
defeasance and discharge of any series of Debt Securities, provided that any
such action will not adversely affect the interests of the Holders of Debt
Securities of such series or any other series of Debt Securities issued under
such Indenture or any related Coupons in any material respect; (8) to
establish the form or terms of Debt Securities and Coupons, if any, as
permitted by the applicable Indenture; (9) to evidence and provide for the
acceptance of appointment thereunder by a successor Trustee with respect to
one or more series of Debt Securities and to add to or change any of the
provisions of the applicable Indenture as is necessary to provide for or
facilitate the administration of the trusts thereunder by more than one
Trustee; or (10) to cure any ambiguity, to correct or supplement any provision
in the applicable Indenture which may be defective or inconsistent with any
other provision therein, to eliminate any conflict between the terms of the
applicable Indenture and the Debt Securities issued thereunder and the TIA or
to make any other provisions with respect to matters or questions arising
under the applicable Indenture which will not be inconsistent with any
provision of the applicable Indenture; provided such other provisions shall
not adversely affect the interests of the Holders of Outstanding Debt
Securities or Coupons, if any, of any series created thereunder prior to such
modification in any material respect. (Section 11.01)
With the written consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such modification voting separately, the Company and the applicable Trustee
may modify the applicable Indenture for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of the
applicable Indenture or of modifying in any manner the rights of the Holders
of Debt Securities and Coupons, if any, under the applicable Indenture;
provided, however, that no such modification may, without the consent of the
Holder of each Outstanding Debt Security of each such series affected thereby
(1) change the Stated Maturity of the principal of, or any installment of
interest on, any Debt Security, or reduce the principal amount thereof or the
interest thereon or any premium payable upon redemption thereof, or change the
Stated Maturity of or reduce the amount of any payment to be made with respect
to any Coupon, or change the currency or currencies in which the principal of
(and premium, if any) or interest on such Debt Security is denominated or
payable, or reduce the amount of the principal of a Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof, or adversely affect the right of repayment or repurchase, if any, at
the option of the Holder, or reduce the amount of, or postpone the date fixed
for, any payment under any sinking fund or analogous provisions for any Debt
Security, or impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or limit the obligation of the
Company to maintain a paying agency outside the United States for payments on
Bearer Securities, or adversely affect the right to convert any Subordinated
Debt Security into shares of Common Stock as may be set forth in the
Prospectus Supplement; (2) reduce the percentage in principal amount of the
Outstanding Debt Securities of any series, the consent of whose Holders is
required for any such modification, or the consent of whose Holders is
required for any waiver of compliance with certain provisions of the
applicable Indenture or certain defaults or Events of Default thereunder and
their consequences provided for in such Indenture; (3) modify any of the
provisions of the applicable Indenture relating to modifications and waivers
of defaults and covenants, except to increase any such percentage or to
provide that certain other provisions of the applicable Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding Debt
Security of each series affected
13
<PAGE>
thereby; provided, however, that certain of such modifications may be made
without the consent of any Holder of any Debt Security; or (4) in the case of
the Subordinated Indenture, modify any of the provisions relating to the
subordination of the Subordinated Debt Securities in a manner adverse to the
Holders thereof. (Section 11.02)
A modification which changes or eliminates any covenant or other provision
of the applicable Indenture with respect to one or more particular series of
Debt Securities and Coupons, if any, or which modifies the rights of the
Holders of Debt Securities and Coupons of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
the applicable Indenture of the Holders of Debt Securities and Coupons, if
any, of any other series. (Section 11.02)
In the case of the Subordinated Indenture, no modification may adversely
affect the rights of any holder of Senior Indebtedness under the subordination
provisions of the Subordinated Indenture without the consent of such holder.
(Section 11.08 of the Subordinated Indenture)
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
the Debt Securities of any such series waive, by notice to the applicable
Trustee and the Company, any past default or Event of Default under the
applicable Indenture with respect to such series and its consequences, except
a default (1) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series, or in the payment of any sinking
fund installment or analogous obligation with respect to the Debt Securities
of such series, or (2) in respect of a covenant or provision hereof which
pursuant to the second paragraph under "--Debt Securities--Modification or
Waiver" cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of such series affected. Upon any such waiver,
such default will cease to exist, and any Event of Default arising therefrom
will be deemed to have been cured, for every purpose of the Debt Securities of
such series under the applicable Indenture, but no such waiver will extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon. (Section 5.13)
The Company may omit in any particular instance to comply with certain
covenants in the applicable Indenture (including, if so specified in the
Prospectus Supplement, any covenant not set forth in the applicable Indenture
but specified in the Prospectus Supplement to be applicable to the Debt
Securities of any series issued thereunder, except as otherwise specified in
the Prospectus Supplement, and including the covenants relating to the
maintenance by the Company of its existence, rights and franchises), if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Debt Securities of such series either waive such
compliance in such instance or generally waive compliance with such
provisions, but no such waiver may extend to or affect any term, provision or
condition except to the extent expressly so waived, and, until such waiver
becomes effective, the obligations of the Company and the duties of the
applicable Trustee in respect of any such provision will remain in full force
and effect. (Section 12.09 of the Senior Indenture; Section 12.07 of the
Subordinated Indenture)
Subordination
Upon any distribution of assets of the Company upon the dissolution,
winding up, liquidation or reorganization of the Company, the payment of the
principal of (and premium, if any) and interest on the Subordinated Debt
Securities will be subordinated to the extent provided in the Subordinated
Indenture in right of payment to the prior payment in full of all Senior
Indebtedness, including Senior Debt Securities (Sections 16.01 and 16.02 of
the Subordinated Indenture), but the obligation of the Company to make payment
of principal (and premium, if any) or interest on the Subordinated Debt
Securities will not otherwise be affected. (Section 16.02 of the Subordinated
Indenture) No payment on account of principal (or premium, if any), sinking
funds or interest may be made on the Subordinated Debt Securities (including,
without limitation, payment of any Coupons) unless full payment of amounts
then due for principal, premium, if any, sinking funds and interest on Senior
Indebtedness has been made or duly provided for. (Section 16.03 of the
Subordinated Indenture) In the event that, notwithstanding the foregoing, any
payment by the Company described in the foregoing sentence is received by the
Trustee under the Subordinated Indenture, any Paying Agent or the Holders of
any of the
14
<PAGE>
Subordinated Debt Securities before all Senior Indebtedness is paid in full,
such payment or distribution shall be paid over to the holders of such Senior
Indebtedness or on their behalf for application to the payment of all such
Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall
have been paid in full, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness. Subject to payment in
full of Senior Indebtedness, the Holders of the Subordinated Debt Securities
will be subrogated to the rights of the holders of the Senior Indebtedness to
the extent of payments made to the holders of such Senior Indebtedness out of
the distributive share of the Subordinated Debt Securities. (Section 16.02 of
the Subordinated Indenture)
By reason of such subordination, in the event of a distribution of assets
upon insolvency, certain general creditors of the Company may recover more,
ratably, than Holders of the Subordinated Debt Securities. The Subordinated
Indenture provides that the subordination provisions thereof shall not apply
to money and securities held in trust pursuant to the satisfaction and
discharge and the legal defeasance provisions of the Subordinated Indenture.
(Sections 4.02 and 15.02 of the Subordinated Indenture)
If this Prospectus is being delivered in connection with the offering of a
series of Subordinated Debt Securities, the accompanying Prospectus Supplement
or the information incorporated by reference therein will set forth the
approximate amount of Senior Indebtedness outstanding as of a recent date.
Discharge, Legal Defeasance and Covenant Defeasance
The applicable Indenture with respect to the Debt Securities of any series
may be discharged, subject to certain terms and conditions, when (1) either
(A) all Debt Securities and the Coupons, if any, of such series have been
delivered to the applicable Trustee for cancellation, or (B) all Debt
Securities and the Coupons, if any, of such series not theretofore delivered
to the applicable Trustee for cancellation (i) have become due and payable,
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements
satisfactory to the applicable Trustee for the giving of notice by the
applicable Trustee, and the Company, in the case of (i), (ii) or (iii) of
subclause (B), has irrevocably deposited or caused to be deposited with the
applicable Trustee as trust funds in trust for such purpose an amount in the
currency in which such Debt Securities are denominated sufficient to pay and
discharge the entire indebtedness on such Debt Securities for principal (and
premium, if any) and interest to the date of such deposit (in the case of Debt
Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be; provided, however, in the event a
petition for relief under the applicable Federal or state bankruptcy,
insolvency or other similar law is filed with respect to the Company within 91
days after the deposit and the applicable Trustee is required to return the
deposited money to the Company, the obligations of the Company under the
applicable Indenture with respect to such Debt Securities will not be deemed
terminated or discharged; (2) the Company has paid or caused to be paid all
other sums payable under the applicable Indenture by the Company; (3) the
Company has delivered to the applicable Trustee an officers' certificate and
an opinion of counsel each stating that all conditions precedent therein
provided relating to the satisfaction and discharge of the applicable
Indenture with respect to such series have been complied with; and (4) the
Company has delivered to the applicable Trustee an opinion of counsel or a
ruling of the Internal Revenue Service to the effect that such deposit and
discharge will not cause the Holders of the Debt Securities of the series to
recognize income, gain or loss for Federal income tax purposes. (Section 4.01)
If provision is made for the defeasance of Debt Securities of a series, and
if the Debt Securities of such series are Registered Securities and
denominated and payable only in U.S. dollars, then the provisions of each
Indenture relating to defeasance shall be applicable except as otherwise
specified in the Prospectus Supplement for Debt Securities of such series.
Defeasance provisions, if any, for Debt Securities denominated in a foreign
currency or currencies or for Bearer Securities may be specified in the
Prospectus Supplement. (Section 15.01)
At the Company's option, either (a) the Company shall be deemed to have
been Discharged (as defined below) from its obligations with respect to Debt
Securities of any series (including, in the case of Subordinated Debt
Securities, the provisions described under "--Debt Securities--Subordination"
herein) ("legal defeasance
15
<PAGE>
option") or (b) the Company shall cease to be under any obligation to comply
with any obligation of the Company in the applicable Indenture including any
restrictive covenants described in the accompanying Prospectus Supplement and
any other covenants applicable to the Debt Securities which are subject to
covenant defeasance (including, in the case of Subordinated Debt Securities,
the provisions described under "Subordination" herein) ("covenant defeasance
option") at any time after the applicable conditions set forth below have been
satisfied: (1) the Company shall have deposited or caused to be deposited
irrevocably with the applicable Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders
of the Debt Securities of such series (i) money in an amount, or (ii) U.S.
Government Obligations which through the payment of interest and principal in
respect thereof in accordance with their terms will provide, not later than
one day before the due date of any payment, money in an amount, or (iii) a
combination of (i) and (ii), sufficient, in the opinion (with respect to (i)
and (ii)) of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the applicable
Trustee, to pay and discharge each installment of principal (including any
mandatory sinking fund payments) of (and premium, if any) and interest on, the
Outstanding Debt Securities of such series on the dates such installments of
interest or principal and premium are due; (2) such deposit shall not cause
the applicable Trustee with respect to the Debt Securities of that series to
have a conflicting interest with respect to the Debt Securities of any series;
(3) such deposit will not result in a breach or violation of, or constitute a
default under, the applicable Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound; (4) if the Debt
Securities of such series are then listed on any national securities exchange,
the Company shall have delivered to the applicable Trustee an opinion of
counsel or a letter or other document from such exchange to the effect that
the Company's exercise of its legal defeasance option or the covenant
defeasance option, as the case may be, would not cause such Debt Securities to
be delisted; (5) no Event of Default or event (including such deposit) which,
with notice or lapse of time or both, would become an Event of Default with
respect to the Debt Securities of such series shall have occurred and be
continuing on the date of such deposit and, with respect to the legal
defeasance option only, no Event of Default under the provisions of the
applicable Indenture relating to certain events of bankruptcy or insolvency or
event which with the giving of notice or lapse of time, or both, would become
an Event of Default under such bankruptcy or insolvency provisions shall have
occurred and be continuing on the 91st day after such date; and (6) certain
other opinions, officers' certificates and other documents specified in the
applicable Indenture, including an opinion of counsel or a ruling of the
Internal Revenue Service to the effect that such deposit, defeasance or
Discharge will not cause the Holders of the Debt Securities of such series to
recognize income, gain or loss for Federal income tax purposes.
Notwithstanding the foregoing, if the Company exercises its covenant
defeasance option and an Event of Default under the provisions of the
Indentures relating to certain events of bankruptcy or insolvency or event
which with the giving of notice or lapse of time, or both, would become an
Event of Default under such bankruptcy or insolvency provisions shall have
occurred and be continuing on the 91st day after the date of such deposit, the
obligations of the Company referred to under the definition of covenant
defeasance option with respect to such Debt Securities shall be reinstated in
full. (Section 15.02)
Payment and Paying Agents
If Debt Securities of a series are issuable only as Registered Securities,
the Company will maintain in each Place of Payment for such series an office
or agency where Debt Securities of that series may be presented or surrendered
for payment, where Debt Securities of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities of that series and the
applicable Indenture may be served. (Section 12.03)
If Debt Securities of a series are issuable as Bearer Securities, the
Company will maintain (A) in the Borough of Manhattan, The City and State of
New York, an office or agency where any Registered Securities of that series
may be presented or surrendered for payment, where any Registered Securities
of that series may be surrendered for registration of transfer, where Debt
Securities of that series may be surrendered for exchange or redemption, where
Subordinated Debt Securities of that series that are convertible may be
surrendered for conversion, where notices and demands to or upon the Company
in respect of the Debt Securities of that series
16
<PAGE>
and the applicable Indenture may be served and where Bearer Securities of that
series and related Coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not otherwise), (B)
subject to any laws or regulations applicable thereto, in a Place of Payment
for that series which is located outside the United States, an office or
agency where Debt Securities of that series and related Coupons may be
presented and surrendered for payment (including payment of any additional
amounts payable on Debt Securities of that series, if so provided in such
series; provided, however, that if the Debt Securities of that series are
listed on The Stock Exchange of the United Kingdom and the Republic of
Ireland, the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent for the Debt Securities of that series in
London, Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Debt Securities of that series are
listed on such exchange, and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United
States an office or agency where any Registered Securities of that series may
be surrendered for registration of transfer, where Debt Securities of that
series may be surrendered for exchange or redemption, where Subordinated Debt
Securities of that series that are convertible may be surrendered for
conversion and where notices and demands to or upon the Company in respect of
the Debt Securities of that series and the applicable Indenture may be served.
The Company will give prompt written notice to the applicable Trustee of the
locations, and any change in the locations, of such offices or agencies. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the applicable Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
corporate trust office of the applicable Trustee, except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment at the offices specified in the applicable Debt
Security and the Company has appointed the applicable Trustee (or in the case
of Bearer Securities may appoint such other agent as may be specified in the
applicable Prospectus Supplement) as its agent to receive all presentations,
surrenders, notices and demands. (Section 12.03)
No payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that,
if the Debt Securities of a series are denominated and payable in U.S.
dollars, payment of principal of and any premium and interest on Bearer
Securities of such series, if specified in the applicable Prospectus
Supplement, shall be made at the office of the applicable Trustee or the
Company's Paying Agent in the Borough of Manhattan, the City and State of New
York, if (but only if) payment in U.S. dollars of the full amount of such
principal, premium, interest or additional amounts, as the case may be, at all
offices or agencies outside the United States maintained for the purpose by
the Company in accordance with the applicable Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
(Section 12.03)
Book-Entry Debt Securities
The Debt Securities of a series may be issued in whole or in part in global
form that will be deposited with, or on behalf of, a depositary identified in
the Prospectus Supplement. Global Notes may be issued in either registered or
bearer form and in either temporary or permanent form (each a "Global Note").
Payments of principal of (and premium, if any) and interest on Debt Securities
represented by a Global Note will be made by the Company to the applicable
Trustee and then by such Trustee to the depositary.
If specified in the applicable Prospectus Supplement, any Global Notes will
be deposited with, or on behalf of, The Depository Trust Company, New York,
New York ("DTC"), as depositary, or such other depositary as may be specified
in the applicable Prospectus Supplement. In the event that DTC acts as
depositary with respect to any Global Notes, the Company anticipates that such
Global Notes will be registered in the name of DTC's nominee, and that the
following provisions will apply to the depositary arrangements with respect to
any such Global Notes. Additional or differing terms of the depositary
arrangements, if any, applicable to the Offered Debt Securities, will be
described in the accompanying Prospectus Supplement.
17
<PAGE>
So long as DTC or its nominee is the registered owner of a Global Note, DTC
or its nominee, as the case may be, will be considered the sole Holder of the
Debt Securities represented by such Global Note for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in a Global Note will not be entitled to have Debt Securities represented by
such Global Note registered in their names, will not receive or be entitled to
receive physical delivery of Debt Securities in certificated form and will not
be considered the owners or Holders thereof under the applicable Indenture.
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in certificated form; accordingly, such
laws may limit the transferability of beneficial interests in a Global Note.
If DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the Company within 90 days, the
Company will issue individual Debt Securities in certificated form in exchange
for the Global Notes. In addition, the Company may at any time, and in its
sole discretion, determine not to have any Debt Securities represented by one
or more Global Notes and, in such event, will issue individual Debt Securities
in certificated form in exchange for the relevant Global Notes. If Registered
Securities of any series shall have been issued in the form of one or more
Global Notes and if an Event of Default with respect to the Debt Securities of
such series shall have occurred and be continuing, the Company will issue
individual Debt Securities in certificated form in exchange for the relevant
Global Notes. (Section 3.04)
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company organized under the Banking Law of
the State of New York, a "banking organization" within the meaning of the
Banking Law of the State of New York, a member of the Federal Reserve System,
a clearing corporation within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants
are on file with the Commission.
Purchases of Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt
Securities on DTC's records. The ownership interest of each actual purchaser
of each Debt Security ("Beneficial Owner") is in turn recorded on the Direct
and Indirect Participants' records. A Beneficial Owner does not receive
written confirmation from DTC of its purchase, but such Beneficial Owner is
expected to receive a written confirmation providing details of the
transaction, as well as periodic statements of its holdings, from the Direct
or Indirect Participant through which such Beneficial Owner entered into the
transaction. Transfers of ownership interests in Debt Securities are
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners do not receive certificates representing
their ownership interests in Debt Securities, except in the event that use of
the book entry system for the Debt Securities is discontinued.
To facilitate subsequent transfers, the Debt Securities are registered in
the name of DTC's partnership nominee, Cede & Co. The deposit of the Debt
Securities with DTC and their registration in the name of Cede & Co. effects
no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Debt Securities; DTC records reflect only the
identity of the Direct Participants to whose accounts Debt Securities are
credited, which may or may not be the Beneficial Owners. The Participants
remain responsible for keeping account of their holdings on behalf of their
customers.
18
<PAGE>
Delivery of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants
and Indirect Participants to Beneficial Owners are governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the Debt
Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus Proxy")
to the issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts the Debt Securities are credited on the record date
(identified on a list attached to the Omnibus Proxy).
Principal and interest payments on the Debt Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the payable date
in accordance with their respective holdings as shown on DTC's records unless
DTC has reason to believe that it will not receive payment on the payable
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the
Paying Agent or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal and
interest to DTC is the responsibility of the Company or the Paying Agent,
disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to the Debt Securities at any time by giving reasonable notice to the
Company or the Paying Agent. Under such circumstances, in the event that a
successor securities depositary is not appointed, Debt Security certificates
are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
Debt Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
Unless stated otherwise in the applicable Prospectus Supplement, the
underwriters or agents with respect to a series of Debt Securities issued as
Global Notes will be Direct Participants in DTC.
None of the Company, any underwriter or agent, the applicable Trustee or
any applicable Paying Agent will have the responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
interests in a Global Note, or for maintaining, supervising or reviewing any
records relating to such beneficial interests.
Conversion or Exchange Rights
The terms and conditions, if any, upon which Subordinated Debt Securities
being offered are convertible or exchangeable into another series of Debt
Securities or shares of Common Stock will be set forth in the Prospectus
Supplement relating thereto. Such terms will include the conversion or
exchange price, the conversion or exchange period, provisions as to whether
conversion or exchange will be at the option of the Holder or the Company, the
events requiring an adjustment of the conversion or exchange price and
provisions affecting conversions or exchanges in the event of the redemption
of such Subordinated Debt Securities.
19
<PAGE>
Concerning the Trustees
The Company may from time to time maintain deposit accounts and conduct
other banking transactions with The Chase Manhattan Bank or The Bank of New
York and their affiliated entities in the ordinary course of business.
Certain Definitions
Set forth below is summary of certain defined terms used in the applicable
Indenture. Reference is made to the applicable Indenture for the full
definition of all such terms.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Debt Securities of such series and to have satisfied all the obligations under
the applicable Indenture relating to the Debt Securities of such series,
except (i) the right of Holders of Debt Securities of such series to receive,
from the trust fund described under "Discharge, Legal Defeasance and Covenant
Defeasance" above, payment of the principal of (and premium, if any) and
interest on such Debt Securities when such payments are due, (ii) the
Company's obligations with respect to the Debt Securities of such series under
the provisions relating to exchanges, transfers and replacement of Debt
Securities, the maintenance of an office or agency of the Company and the
defeasance trust fund, the provisions relating to compensation and
reimbursement of the applicable Trustee and (iii) the rights, powers, trusts,
duties and immunities of the applicable Trustee thereunder. (Section 15.02)
"Indebtedness" means (i) any liability of any Persons (a) for borrowed
money, or (b) evidenced by a bond, note, debenture or similar instrument
(including purchase money obligations but excluding trade payables), or (c)
for the payment of money relating to a lease that is required to be classified
as a capitalized lease obligation in accordance with generally accepted
accounting principles, or (d) preferred or preference stock of a Subsidiary of
the Company held by Persons other than the Company or a Subsidiary of the
Company; (ii) any liability of others described in the preceding clause (i)
that the Person has guaranteed, that is recourse to such Person or that is
otherwise its legal liability; and (iii) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of
the types referred to in clauses (i) and (ii) above. (Section 1.01)
"Senior Indebtedness" means the principal of (and premium, if any) and
unpaid interest on (i) Indebtedness of the Company, whether outstanding on the
date of the Subordinated Indenture or thereafter created, incurred, assumed or
guaranteed, for money borrowed (other than the Indebtedness evidenced by the
Subordinated Debt Securities of any series), unless in the instrument creating
or evidencing the same pursuant to which the same is outstanding it is
provided that such Indebtedness is not senior or prior in right of payment
to the Subordinated Debt Securities or is pari passu or subordinate by its
terms in right of payment to the Subordinated Debt Securities and (ii)
renewals, extensions and modifications of any such Indebtedness. (Section 1.01
of the Subordinated Indenture)
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation, irrespective of whether or not
at the time stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency, is
at the time, directly or indirectly, owned or controlled by the Company or by
one or more Subsidiaries thereof, or by the Company and one or more
Subsidiaries thereof. (Section 1.01)
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the timely payment of which its full
faith and credit is pledged, or (ii) obligations of a Person controlled for
supervised by and acting as an agency or instrumentality of the United States
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case under clauses (i) or
(ii), are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government
20
<PAGE>
Obligation or a specific payment of interest on (or principal of) any such
U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by
such depository receipt. (Section 15.02)
SUBSIDIARY GUARANTEES
The Subsidiary Guarantors named below may, jointly and severally, fully and
unconditionally guarantee the due and punctual payment of principal of (and
premium, if any) and interest on one or more series of Debt Securities, on
such terms and conditions as may be set forth in the applicable Prospectus
Supplement.
The "Subsidiary Guarantors" will consist of the following wholly-owned
subsidiaries of the Company: The Money Store/D.C. Inc., The Money
Store/Kentucky Inc., The Money Store/Minnesota Inc., The Money Store Auto
Finance Inc., ClassNotes Inc., Dyna-Mark, Inc., Equity Insurance Agency, Inc.,
Major Brokerage Co., Inc., Princeton Escrow, The Money Store Home Equity
Corp., The Money Store Investment Corporation, The Money Store of New York
Inc., The Commerce Group, The Money Store Commercial Mortgage Inc., The Money
Store Service Corp., TMS Mortgage Inc., The Money Store U.K. Inc., The Money
Store Realty Inc., and TMS Venture Holdings, Inc.
As of the date of this Prospectus, the Subsidiary Guarantors conduct all of
the Company's operations other than its Student Loan business and the holding
of its excess servicing asset.
PREFERRED STOCK
The description of certain provisions of the Preferred Stock set forth
below and in any Prospectus Supplement does not purport to be complete and is
subject to and qualified in its entirety by reference to the Company's
Restated Articles of Incorporation, as amended (the "Articles"), and the
Articles of Amendment relating to each such series of Preferred Stock, which
will be filed with the Commission in connection with the offering of such
series of Preferred Stock.
General
Under the Articles, the Board of Directors may, by resolution, establish
series of Preferred Stock having such voting powers, and such designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as the Board of Directors
may determine.
The Preferred Stock offered hereby will have the dividend, liquidation and
voting rights set forth below unless otherwise provided in the Prospectus
Supplement relating to a particular series of Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of
Preferred Stock offered thereby for specific terms, including: (1) the
designation and stated value per share of such Preferred Stock and the number
of shares offered; (2) the amount of liquidation preference per share; (3) the
price at which such Preferred Stock will be issued; (4) the dividend rate (or
method of calculation), the dates on which dividends will be payable, whether
such dividends will be cumulative or noncumulative and, if cumulative, the
dates from which dividends will accrue; (5) any redemption or sinking fund
provisions; (6) any terms by which such series of Preferred Stock may be
convertible into or exchanged for Common Stock or Debt Securities; and (7) any
additional or other rights, preferences, privileges, limitations and
restrictions relating to such series of Preferred Stock.
The Preferred Stock offered hereby will be issued in one or more series.
The holders of Preferred Stock will have no preemptive rights. Preferred Stock
will be fully paid and nonassessable upon issuance against full payment of the
purchase price therefor. Unless otherwise specified in the Prospectus
Supplement relating to a
21
<PAGE>
particular series of Preferred Stock, each series of Preferred Stock will, with
respect to dividend rights and rights on liquidation, dissolution and winding
up of the Company, rank prior to the Common Stock (the "Junior Stock") and on a
parity with each other series of Preferred Stock offered hereby (the "Parity
Stock").
Dividend Rights
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of funds
legally available therefor, cash dividends at such rates and on such dates as
are set forth in the Prospectus Supplement relating to such series of Preferred
Stock. Such rate may be fixed or variable or both. Each such dividend will be
payable to the holders of record as they appear on the stock books of the
Company on such record dates as will be fixed by the Board of Directors of the
Company. Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the Prospectus Supplement relating thereto. If
the Board of Directors of the company fails to declare a dividend payable on a
dividend payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay the dividend accrued for that period, whether or not
dividends are declared for any future period. Dividends on shares of each
series of Preferred Stock for which dividends are cumulative will accrue from
the date set forth in the applicable Prospectus Supplement.
The Preferred Stock of each series will include customary provisions (1)
restricting the payment of dividends or the making of other distributions on,
or the redemption, purchase or other acquisition of, Junior Stock unless full
dividends, including, in the case of cumulative Preferred Stock, accruals, if
any, in respect of prior dividend periods, on the shares of such series of
Preferred Stock have been paid and (2) providing for the pro rata payment of
dividends on such series and other Parity Stock when dividends have not been
paid in full upon such series and other Parity Stock.
Rights Upon Liquidation
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of each series of Preferred Stock will
be entitled to receive out of assets of the Company available for distribution
to stockholders, before any distribution of assets is made to holders of Junior
Stock, liquidating distributions in the amount set forth in the Prospectus
Supplement relating to such series of Preferred Stock plus an amount equal to
accrued and unpaid dividends. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts payable with
respect to the Preferred Stock of any series and any Parity Stock are not paid
in full, the holders of the Preferred Stock of such series and of such Parity
Stock will share ratably in any such distribution of assets of the Company in
proration to the full respective preferential amounts (which may include
accumulated dividends) to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of such series of Preferred Stock will have no right or claim to any of the
remaining assets of the Company. Neither the sale of all or a portion of the
Company's assets nor the merger or consolidation of the Company into or with
any other corporation shall be deemed to be a dissolution, liquidation or
winding up, voluntarily or involuntarily, of the Company.
Voting Rights
The holders of Preferred Stock of a series offered hereby will not be
entitled to vote except as indicated in the Prospectus Supplement relating to
such series of Preferred Stock or as required by applicable law. Unless
otherwise specified in the Prospectus Supplement relating to a particular
series of Preferred Stock, when and if any such series is entitled to vote,
each share in such series will be entitled to one vote.
22
<PAGE>
PLAN OF DISTRIBUTION
The Company and the Selling Shareholder may offer and sell the Securities in
one or more of the following ways: (i) through underwriters or dealers, (ii)
through agents, or (iii) directly to one or more purchasers. The Prospectus
Supplement with respect to a particular offering of a series of Securities will
set forth the terms of the offering of such Securities, including the name or
names of any underwriters or agents with whom the Company has entered into
arrangements with respect to the sale of such Securities, the public offering
or purchase price of such Securities and the proceeds to the Company and/or the
Selling Shareholder from such sales and any underwriting discounts, agency fees
or commissions and other items constituting underwriters' compensation, the
initial public offering price, any discounts or concessions to be allowed or
re-allowed or paid to dealers and any securities exchange, if any, on which
such Securities may be listed. Dealer trading may take place in certain of the
Offered Securities, including Offered Securities not listed on any securities
exchange.
If underwriters are used in the offer and sale of Offered Securities, the
Offered Securities will be acquired by the underwriters for their own account
and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The Offered Securities may be offered to the
public either through underwriting syndicates represented by managing
underwriters, or by underwriters without a syndicate, all of which underwriters
in either case will be designated in the applicable Prospectus Supplement.
Unless otherwise set forth in the applicable Prospectus Supplement, under the
terms of the underwriting agreement, the obligations of the underwriters to
purchase Offered Securities will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all of the Offered Securities if
any are purchased. Any initial public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time
to time.
Offered Securities may be offered and sold directly by the Company and the
Selling Shareholder or through agents designated by the Company and the Selling
Shareholder from time to time. Any agent involved in the offer or sale of the
Offered Securities with respect to which this Prospectus is delivered will be
named in, and any commissions payable to such agent will be set forth in or
calculable from, the applicable Prospectus Settlement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
If so indicated in the applicable Prospectus Supplement, the Company may
authorize underwriters, dealers or agents to solicit offers by certain
institutions to purchase the Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to delayed
delivery contracts ("Delayed Delivery Contracts") providing for payment and
delivery on the date or dates stated in the Prospectus Supplement. Each Delayed
Delivery Contract will be for an amount of the Offered Securities not less than
and, unless the Company otherwise agrees, the aggregate amount of the Offered
Securities sold pursuant to Delayed Delivery Contracts shall be not more than
the respective minimum and maximum amounts stated in the Prospectus Supplement.
Institutions with which Delayed Delivery Contracts, when authorized, may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies and educational and charitable institutions, but shall in
all cases be subject to the approval of the Company in its sole discretion. The
obligations of the purchaser under any Delayed Delivery Contract to pay for and
take delivery of the Offered Securities will not be subject to any conditions
except that (i) the purchase of the Offered Securities by such institution
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such institution is subject, and (ii) any related sale of
the Offered Securities to underwriters shall have occurred. A commission set
forth in the Prospectus Supplement will be paid to underwriters soliciting
purchases of the Offered Securities pursuant to Delayed Delivery Contracts
accepted by the Company. The underwriters will not have any responsibility in
respect of the validity or performance of Delayed Delivery Contracts.
The Debt Securities and the Preferred Stock will be new issues of securities
with no established trading market. Any underwriters to whom Offered Securities
are sold by the Company for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for any Offered Securities.
23
<PAGE>
Any underwriter, dealer or agent participating in the distribution of the
Offered Securities may be deemed to be an underwriter, as that term is defined
in the Securities Act, of the Offered Securities so offered and sold, and any
discounts or commissions received by it from the Company and any profit
realized by it on the sale or resale of the Offered Securities may be deemed to
be underwriting discounts and commissions under the Securities Act.
Under agreements entered into with the Company or the Selling Shareholder,
underwriters, dealers and agents may be entitled to indemnification by the
Company or the Selling Shareholder against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments which the underwriters or agents may be required to make in respect
thereof.
Underwriters, dealers and agents also may be customers of, engage in
transactions with, or perform other services for the Company in the ordinary
course of business.
LEGAL MATTERS
Unless otherwise specified in the applicable Prospectus Supplement, the
validity of the Common Stock and the Preferred Stock offered hereby will be
passed upon by Corporate Counsel to the Company, and the validity of the Debt
Securities and the Subsidiary Guarantees offered hereby will be passed upon by
Stroock & Stroock & Lavan LLP, New York, New York. Certain other legal matters
will be passed upon for the Company by Stroock & Stroock & Lavan LLP. Certain
legal matters in connection with any offering of Securities involving any
underwriters or dealers will be passed upon for such underwriters or dealers by
counsel to be named in the appropriate Prospectus Supplement. Stroock & Stroock
& Lavan LLP and such counsel may rely as to matters of New Jersey law on
Corporate Counsel to the Company.
EXPERTS
The consolidated financial statements of The Money Store Inc. and
subsidiaries as of December 31, 1996 and 1995 and for each of the years in the
three year period ended December 31, 1996 have been incorporated by reference
herein and in the Registration Statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
24
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR IN-
CORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PRO-
SPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTA-
TIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
OF THE UNDERWRITERS. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE ACCOMPANYING
PROSPECTUS CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY
ANY SECURITY OTHER THAN THE SECURITIES OFFERED HEREBY, NOR DO THEY CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITA-
TION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITA-
TION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS, NOR ANY SALE MADE HEREUNDER OR THEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT ANY INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Supplement Summary.............................................. S-3
Investment Considerations.................................................. S-6
Use of Proceeds............................................................ S-10
Capitalization............................................................. S-10
Ratios of Earnings......................................................... S-11
Selected Consolidated Financial Data....................................... S-12
Description of the Notes................................................... S-15
Underwriting............................................................... S-18
Legal Matters.............................................................. S-19
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents By Reference............................ 2
The Company................................................................ 4
Ratios of Earnings......................................................... 5
Use of Proceeds............................................................ 5
Selling Shareholder........................................................ 6
Description of Securities.................................................. 6
Plan of Distribution....................................................... 23
Legal Matters.............................................................. 24
Experts.................................................................... 24
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$250,000,000
THE MONEY STORE(R)[LOGO]
% SENIOR NOTES DUE 2002
% SENIOR NOTES DUE 2004
----------------------------
PROSPECTUS SUPPLEMENT
----------------------------
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
PRUDENTIAL SECURITIES INCORPORATED
SALOMON BROTHERS INC
APRIL , 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the offering all of which will be borne by The
Money Store Inc. are as follows (all amounts are estimates except for the SEC
Registration Fee):
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee............... $ 361,902*
Printing Expenses.................. 150,000
Legal Fees and Expenses............ 200,000
Accounting Fees and Expenses....... 50,000
Blue Sky Fees and Expenses......... 40,000
Indenture Trustees Expenses........ 75,000
Rating Agency Fees and Expenses.... 50,000
Transfer Agent and Registrar Fees.. 10,000
Listing Fees....................... 50,000
Miscellaneous...................... 27,585
----------
Total............................ $1,014,487
==========
</TABLE>
- -----------------
* $361,802 was previously paid upon the filing of The Money Store Inc.'s
Registration Statement on Form S-3 (File No. 33-98972).
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 14A:3-5 of the New Jersey Business Corporation Act provides that
New Jersey corporations such as The Money Store Inc. may indemnify any director,
officer, employee or agent against expenses and liabilities in connection with
any proceeding involving the director, officer, employee or agent by reason of
him or her acting in such capacity if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, did not have reasonable cause to believe such conduct was unlawful.
Section Fifth of The Money Store Inc.'s Amended and Restated Certificate of
Incorporation and Article VIII of The Money Store Inc.'s Amended and Restated
By-Laws entitle officers, directors, employees and agents to indemnification to
the fullest extent permitted by Section 14A:3-5 of the New Jersey Business
Corporation Act.
Section Sixth of The Money Store Inc.'s Amended and Restated Certificate of
Incorporation provides that no director or officer shall have any personal
liability to The Money Store Inc. or its shareholders for any damages for breach
of fiduciary duty as a director, except that such provision does not limit or
eliminate the liability of any director or officer (i) for breach of such
director's or officer's duty of loyalty to The Money Store Inc. or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, or (iii) for any
transaction from which such director or officer derived an improper personal
benefit.
The Money Store Inc. maintains directors' and officers' liability insurance
which covers the directors and officers of The Money Store Inc. with policy
limits of $10,000,000, with excess coverage of an additional $10,000,000.
II-1
<PAGE>
ITEM 16. LIST OF EXHIBITS
1.1 Form of Underwriting Agreement for Debt Securities. (Incorporated by
reference to Exhibit 1.1 to The Money Store Inc.'s Registration
Statement on Form S-3 (No. 33-98972)).
1.2 Form of Underwriting Agreement for Preferred Stock. (Incorporated by
reference to Exhibit 1.2 to The Money Store Inc.'s Registration
Statement on Form S-3 (No. 33-98972)).
1.3 Form of Underwriting Agreement for Common Stock. (Incorporated by
reference to Exhibit 1.3 to The Money Store Inc.'s Registration
Statement on Form S-3 (No. 33-98972)).
4.1 Specimen Common Stock Certificate of The Money Store Inc.
(Incorporated by reference to Exhibit 4.1 to The Money Store
Inc.'s Registration Statement on Form S-1 (No. 33-41172)).
4.2* Senior Indenture.
4.3* Form of Senior Note (included in Exhibit 4.2).
4.4 Subordinated Indenture. (Incorporated by reference to Exhibit 4.4 to
The Money Store Inc.'s Registration Statement on Form S-3
(No. 33-98972)).
4.5 Form of Subordinated Note (included in Exhibit 4.4).
4.6 Form of Articles of Amendment for Preferred Stock. (Incorporated by
reference to Exhibit 4.6 to The Money Store Inc.'s Registration
Statement on Form S-3 (No. 33-98972)).
4.7 Specimen Preferred Stock Certificate. (Incorporated by reference to
Exhibit 4.7 to The Money Store Inc.'s Registration Statement on
Form S-3 (No. 33-98972)).
5.1* Opinion of Eric R. Elwin, Corporate Counsel to The Money Store Inc.
regarding legality of Preferred Stock and Common Stock.
5.2* Opinion of Stroock & Stroock & Lavan LLP regarding legality of Debt
Securities and the Subsidiary Guarantees.
12.1* Statement of Computation of Ratio of Earnings to Fixed Charges.
23.1* Consent of Stroock & Stroock & Lavan LLP (included in Exhibit 5.2).
23.2* Consent of Eric R. Elwin, Esq. (included in Exhibit 5.1).
23.3* Consent of KPMG Peat Marwick LLP.
24.1* Powers of Attorney (included in Part II to this Registration
Statement).
25.1* Statement of Eligibility of Senior Trustee on Form T-1.
- --------------------
* Filed herewith
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement.
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that for purposes of determining
any liability under the Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions in Item 15, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the information
omitted from the form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Act, each post-
effective amendment that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering hereof.
The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act of 1939, as amended (the "Trust
II-3
<PAGE>
Indenture Act"), in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Trust Indenture Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Union, State of New Jersey, on the 8th day of April,
1997.
THE MONEY STORE INC. ("TMS") AND THE
GUARANTORS LISTED ON ANNEX A
(THE "GUARANTORS")
By: /s/ Morton Dear
------------------------------
Morton Dear
Executive Vice President of TMS
and each of the Guarantors, other than The Money
Store Service Corp. of which he is President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Morton Dear, Harry Puglisi or Eric Elwin,
or any of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and any registration statement
relating to any offering made in connection with the offering covered by this
Registration Statement that is to be effective upon filing pursuant to Rule
426(b) under the Securities Act of 1933, as amended, and to file the same with
all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or any of them, or their or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on April 8, 1997.
SIGNATURE TITLE
- --------- -----
/s/ Alan Turtletaub
_______________________ Chairman of the Board of Directors and Executive
Alan Turtletaub Vice President of TMS, Director and Executive
Vice President of each Guarantor listed on Annex B,
and Director and President (Principal Executive
Officer) of Equity Insurance Agency, Inc. and Major
Brokerage Co., Inc.
/s/ Marc Turtletaub
_______________________ President, Chief Executive Officer (Principal
Marc Turtletaub Executive Officer) and Director of TMS, Dyna-Mark,
Inc., The Money Store Realty Inc. and TMS Venture
Holdings, Inc., and Executive Vice President and
Director of each Guarantor listed on Annex C.
/s/Morton Dear
_______________________ Chief Financial Officer (Principal Financial Officer),
Morton Dear Director and Executive Vice President of TMS and each
Guarantor listed on Annex D, and Chief Financial
Officer (Principal Financial Officer), Director and
President (Principal Executive Officer) of The Money
Store Service Corp.
/s/ Harry Puglisi Treasurer and Director of TMS,
_______________________ Dyna-Mark, Inc. and The Money Store Service
Harry Puglisi Corp.
II-5
<PAGE>
SIGNATURE TITLE
- --------- -----
/s/ William S. Templeton Director and Executive Vice President
- ------------------------ of TMS, President (Principal Executive Officer)
William S. Templeton of each Guarantor listed on Annex E and
Director of each Guarantor listed on Annex F.
/s/ Paul Leliakov President (Principal Executive Officer) and
- ------------------------- Director of The Money Store Investment
Paul Leliakov Corporation, The Money Store of New York Inc.,
The Money Store Commercial Mortgage Inc. and The
Commerce Group.
/s/ Alexander C. Schwartz, Jr. Director of TMS
- -----------------------------
Alexander C. Schwartz, Jr.
/s/ Anthony L. Watson Director of TMS
- -----------------------------
Anthony L. Watson
/s/James K. Ransom Vice President and Principal Accounting Officer
- ----------------------------- of TMS and each Guarantor
James K. Ransom
/s/ Paul Eber President (Principal Executive Officer) and
- ----------------------------- Director of ClassNotes Inc.
Paul Eber
/s/ J. Tom Jones President (Principal Executive Officer) and
- ----------------------------- Director of The Money Store Auto Finance Inc.
J. Tom Jones
II-6
<PAGE>
ANNEX A
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store/Minnesota Inc.
The Money Store Auto Finance Inc.
ClassNotes Inc.
Dyna-Mark, Inc.
Equity Insurance Agency, Inc.
Major Brokerage Co., Inc.
Princeton Escrow
The Money Store Home Equity Corp.
The Money Store Investment Corporation
The Money Store of New York Inc.
The Commerce Group
The Money Store Commercial Mortgage Inc.
The Money Store Service Corp.
TMS Mortgage Inc.
The Money Store U.K. Inc.
The Money Store Realty Inc.
TMS Venture Holdings, Inc.
II-7
<PAGE>
ANNEX B
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store/Minnesota Inc.
The Money Store Auto Finance Inc.
ClassNotes Inc.
Dyna-Mark, Inc.
Princeton Escrow
The Money Store Home Equity Corp.
The Money Store Investment Corporation
The Money Store of New York Inc.
The Commerce Group
The Money Store Commercial Mortgage Inc.
The Money Store Service Corp.
TMS Mortgage Inc.
The Money Store Realty Inc.
TMS Venture Holdings, Inc.
II-8
<PAGE>
ANNEX C
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store/Minnesota Inc.
The Money Store Auto Finance Inc.
ClassNotes Inc.
Equity Insurance Agency, Inc.
Major Brokerage Co., Inc.
Princeton Escrow
The Money Store Home Equity Corp.
The Money Store Investment Corporation
The Money Store of New York Inc.
The Commerce Group
The Money Store Commercial Mortgage Inc.
The Money Store Service Corp.
TMS Mortgage Inc.
II-9
<PAGE>
ANNEX D
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store/Minnesota Inc.
The Money Store Auto Finance Inc.
ClassNotes Inc.
Dyna-Mark, Inc.
Equity Insurance Agency, Inc.
Major Brokerage Co., Inc.
The Money Store Home Equity Corp.
The Money Store Investment Corporation
The Money Store of New York Inc.
The Commerce Group
The Money Store Commercial Mortgage Inc.
TMS Mortgage Inc.
The Money Store Realty Inc.
The Money Store U.K. Inc.
TMS Venture Holdings, Inc.
II-10
<PAGE>
ANNEX E
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store/Minnesota Inc.
Princeton Escrow
The Money Store Home Equity Corp.
TMS Mortgage Inc.
The Money Store U.K. Inc.
II-11
<PAGE>
ANNEX F
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store/Minnesota Inc.
Dyna-Mark, Inc.
Equity Insurance Agency, Inc.
Major Brokerage Co., Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
The Money Store Auto Finance Inc.
The Money Store U.K. Inc.
II-12
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBERS
1.1 Form of Underwriting Agreement for Debt Securities. (Incorporated by
reference to Exhibit 1.1 to The Money Store Inc.'s Registration
Statement on Form S-3 (No. 33-98972)).
1.2 Form of Underwriting Agreement for Preferred Stock. (Incorporated by
reference to Exhibit 1.2 to The Money Store Inc.'s Registration
Statement on Form S-3 (No. 33-98972)).
1.3 Form of Underwriting Agreement for Common Stock. (Incorporated by
reference to Exhibit 1.3 to The Money Store Inc.'s Registration
Statement on Form S-3 (No. 33-98972)).
4.1 Specimen Common Stock Certificate of The Money Store Inc.
(Incorporated by reference to Exhibit 4.1 to The Money Store
Inc.'s Registration Statement on Form S-1 (No. 33-41172)).
4.2* Senior Indenture.
4.3* Form of Senior Note (included in Exhibit 4.2).
4.4 Subordinated Indenture. (Incorporated by reference to Exhibit 4.4 to
The Money Store Inc.'s Registration Statement on Form S-3
(No. 33-98972)).
4.5 Form of Subordinated Note (included in Exhibit 4.4).
4.6 Form of Articles of Amendment for Preferred Stock. (Incorporated by
reference to Exhibit 4.6 to The Money Store Inc.'s Registration
Statement on Form S-3 (No. 33-98972)).
4.7 Specimen Preferred Stock Certificate. (Incorporated by reference to
Exhibit 4.7 to The Money Store Inc.'s Registration Statement on
Form S-3 (No. 33-98972)).
5.1* Opinion of Eric R. Elwin, Corporate Counsel to The Money Store Inc.
regarding legality of Preferred Stock and Common Stock.
5.2* Opinion of Stroock & Stroock & Lavan LLP regarding legality of Debt
Securities and the Subsidiary Guarantees.
12.1* Statement of Computation of Ratio of Earnings to Fixed Charges.
23.1* Consent of Stroock & Stroock & Lavan LLP (included in Exhibit 5.2).
23.2* Consent of Eric R. Elwin, Esq. (included in Exhibit 5.1).
23.3* Consent of KPMG Peat Marwick LLP.
24.1* Powers of Attorney (included in Part II to this Registration
Statement).
25.1* Statement of Eligibility of Senior Trustee on Form T-1.
- --------------------
* Filed herewith
<PAGE>
EXHIBIT 4.2
- --------------------------------------------------------------------------------
THE MONEY STORE INC.,
as Issuer
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
as Subsidiary Guarantors
and
THE CHASE MANHATTAN BANK,
as Trustee
----------
Indenture
Dated as of April __, 1997
----------
SENIOR DEBT SECURITIES
- --------------------------------------------------------------------------------
<PAGE>
INDENTURE dated as of April __, 1997, among THE MONEY STORE INC., a
New Jersey corporation (hereinafter called the "Company"), having its principal
executive office at 2840 Morris Avenue, Union, New Jersey 07083, each of the
Subsidiary Guarantors (as hereinafter defined), and THE CHASE MANHATTAN BANK, a
New York banking corporation, as trustee (hereinafter called the "Trustee"),
having its Corporate Trust Office at 450 West 33rd Street, New York, New York
10001.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes, bonds or other evidences of indebtedness (herein generally
called the "Debt Securities"), to be issued in one or more series, as in this
Indenture provided.
The Company, directly or indirectly, owns as of the date hereof
beneficially and of record 100% of the capital stock of the Subsidiary
Guarantors, the Company and the Subsidiary Guarantors are members of the same
consolidated group of companies and are engaged in related businesses; the
Subsidiary Guarantors will derive direct and indirect economic benefit from the
issuance of the Debt Securities; accordingly, each Subsidiary Guarantor has duly
authorized the execution and delivery of this Indenture to provide for its full,
unconditional and joint and several guarantee of the Debt Securities on the
terms and conditions set forth herein.
All things necessary to make the Debt Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, to make the Guarantees (as
hereinafter defined) of each of the Subsidiary Guarantors, when executed by the
respective Subsidiary Guarantors and endorsed on the Securities, the valid
obligations of the respective Subsidiary Guarantors, and to make this Indenture
a valid agreement of the Company and each of the Subsidiary Guarantors in
accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of Debt Securities or of Debt
Securities of any series, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean
-1-
<PAGE>
such accounting principles as are generally accepted in the United States
of America at the date of such computation; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Three or Article Six, are defined in
those respective Articles.
"Act" when used with respect to any Holder, has the meaning specified
in Section 8.01.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" has the meaning specified in Section 6.14.
"Authorized Newspaper" means a newspaper or financial journal in an
official language of the country of publication customarily published at
least once a day, and customarily published for at least five days in each
calendar week, and of general circulation in the place in connection with
which the term is used or in the financial community of such place. Where
successive publications are required to be made in Authorized Newspapers,
the successive publications may be made in the same or in different
newspapers in the same city meeting the foregoing requirements and in each
case on any Business Day in such city.
"Bearer Security" means any Debt Security (with or without Coupons),
in the form established pursuant to Section 2.01, which is payable to
bearer (including any Global Note payable to bearer) and title to which
passes by delivery only, but does not include any Coupons.
"Board of Directors" means either the board of directors of the
Company, or any committee of that board duly authorized to act hereunder or
any director or directors and/or officer or officers of the Company to whom
that board or committee shall have delegated its authority.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
-2-
<PAGE>
"Business Day" when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Debt
Securities means any day which is not a Saturday, a Sunday or a day on
which banking institutions or trust companies in that Place of Payment or
other location are authorized or obligated by law to close, except as
otherwise specified pursuant to Section 3.01.
"CEDEL" means Cedel Bank, societe anonyme.
"Code" means the Internal Revenue Code of 1986, as amended and as in
effect on the date hereof.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties on such date.
"Common Depositary" has the meaning specified in Section 3.04(b).
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by any two of the
Chairman, a Vice Chairman, the President, the Chief Financial Officer, an
Executive Vice President, any Vice President, the Treasurer, the Controller
or the Secretary of the Company and delivered to the Trustee.
"Component Currency" has the meaning specified in Section 3.10(i).
"Conversion Date" has the meaning specified in Section 3.10(e).
"Conversion Event" means the cessation of (i) a Foreign Currency to be
used both by the government of the country which issued such Currency and
for the settlement of transactions by public institutions of or within the
international banking community, (ii) the ECU to be used both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) any Currency
Unit other than the ECU to be used for the purposes for which it was
established.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this
instrument is located at 450 West 33rd Street, 15th Floor, New York,
New York 10001.
-3-
<PAGE>
"Corporation" includes corporations, associations, companies
(including joint stock companies and limited liability companies) and
business trusts.
"Coupon" means any interest coupon appertaining to any Debt Security.
"Coupon Security" means any Bearer Security authenticated and
delivered with one or more Coupons appertaining thereto.
"Currency" means Dollars or Foreign Currency or Currency Unit.
"Currency Determination Agent" means the New York Clearing House bank,
if any, from time to time selected by the Company pursuant to Section 3.01;
provided that such agent shall accept such appointment in writing and the
--------
terms of such appointment shall be acceptable to the Company and shall, in
the opinion of the Company and the Trustee at the time of such appointment,
require such agent to make the determinations required by this Indenture by
a method consistent with the method provided in this Indenture for the
making of such decision or determination.
"Currency Unit" means a composite currency or currency unit the value
of which is determined by reference to the value of the currencies of any
group of countries.
"Debt Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Debt Securities (including any
Global Notes) authenticated and delivered under this Indenture.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Discharged" has the meaning specified in Section 15.02.
"Discount Security" means any Debt Security which is issued with
"original issue discount" within the meaning of Section 1273(a) of the Code
and the regulations thereunder.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time of payment is legal tender
for the payment of public and private debts.
"Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 3.10(h).
"Dollar Equivalent of the Foreign Currency" has the meaning specified
in Section 3.10(g).
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.
-4-
<PAGE>
"Election Date" has the meaning specified in Section 3.10(i).
"Euro-clear Operator" means Morgan Guaranty Trust Company of New York,
Brussels office, or its successor as operator of the Euro-clear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the
European Communities.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Date" has the meaning specified in Section 3.04(b).
"Exchange Rate Officer's Certificate" means a certificate setting
forth (i) the applicable Market Exchange Rate and (ii) the Dollar, Foreign
Currency or Currency Unit amounts of principal, premium, if any, and any
interest respectively (on an aggregate basis and on the basis of a Debt
Security having the lowest denomination principal amount determined in
accordance with Section 3.02 in the relevant Currency or Currency Unit),
payable on the basis of such Market Exchange Rate signed by the Treasurer
or any Assistant Treasurer of the Company.
"Fixed Rate Security" means a Debt Security which provides for the
payment of interest at a fixed rate.
"Floating Rate Security" means a Debt Security which provides for the
payment of interest at a variable rate determined periodically by reference
to an interest rate index or any other index specified pursuant to Section
3.01.
"Foreign Currency" means a currency issued by the government of any
country other than the United States or a composite currency or currency
unit the value of which is determined by reference to the values of the
currencies of any group of countries.
"Global Note" means a Registered or Bearer Security evidencing all or
part of a series of Debt Securities, including, without limitation, any
temporary or permanent Global Note.
"Holder" means, with respect to a Registered Security, the Registered
Holder, and with respect to a Bearer Security or a Coupon, the bearer
thereof.
"Indebtedness" means (1) any liability of any Person (a) for borrowed
money, or (b) evidenced by a bond, note, debenture or similar instrument
(including purchase money obligations but excluding Trade Payables), or (c)
for the payment of money
-5-
<PAGE>
relating to a lease that is required to be classified as a capitalized
lease obligation in accordance with generally accepted accounting
principles, or (d) with respect to preferred or preference stock of a
Subsidiary of the Company held by Persons other than the Company or a
Subsidiary of the Company; (2) any liability of others described in the
preceding clause (1) that the Person has guaranteed, that is recourse to
such Person or that is otherwise its legal liability; and (3) any
amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of the types referred to in clauses (1) and (2)
above.
"Indenture" means this instrument as originally executed, or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof and, unless the context otherwise requires, shall include the terms
of a particular series of Debt Securities as established pursuant to
Section 3.01.
The term "interest," when used with respect to a Discount Security
which by its terms pays interest only after Maturity, means interest
payable after Maturity, and, when used with respect to a Bearer Security,
includes any additional amounts payable on such Bearer Security, if so
provided pursuant to Section 3.01.
"Interest Payment Date" with respect to any Debt Security means the
Stated Maturity of an installment of interest on such Debt Security.
"Market Exchange Rate" means (i) for any conversion involving a
Currency Unit on the one hand and Dollars or any Foreign Currency on the
other, the exchange rate between the relevant Currency Unit and Dollars or
such Foreign Currency calculated for noon New York time, on the Valuation
Date by the method specified pursuant to Section 3.01 for the securities of
the relevant series, (ii) for any conversion of Dollars into any Foreign
Currency, the noon (New York City time) buying rate for such Foreign
Currency for cable transfers quoted in New York City as certified for
customs purposes by the Federal Reserve Bank of New York and (iii) for any
conversion of one Foreign Currency into Dollars or another Foreign
Currency, the spot rate at noon local time in the relevant market at which,
in accordance with normal banking procedures, the Dollars or Foreign
Currency into which conversion is being made could be purchased with the
Foreign Currency from which conversion is being made from major banks
located in either New York City, London or any other principal market for
Dollars or such purchased Foreign Currency. In the event of the
unavailability of any of the exchange rates provided for in the foregoing
clauses (i), (ii) and (iii), the Company shall use, in its sole discretion
and without liability on its part, such quotation of the Federal Reserve
Bank of New York as of the most recent available date, or quotations from
one or more major banks in New York City, London or other principal market
for such Currency or Currency Unit in question, or such other quotations as
the Company shall deem appropriate, in its sole discretion and without
liability on its part. Unless otherwise specified by the Currency
Determination Agent, if any, or if there shall not be a Currency
Determination Agent, then by the Trustee, if there is more than one market
for dealing in any Currency or
-6-
<PAGE>
Currency Unit by reason of foreign exchange regulations or otherwise, the
market to be used in respect of such Currency or Currency Unit shall be
that as determined by the Currency Determination Agent, or if there shall
not be a Currency Determination Agent, then by the Trustee, in its sole
discretion and without liability on its part, upon which a nonresident
issuer of securities designated in such Currency or Currency Unit would
purchase such Currency or Currency Unit in order to make payments in
respect of such securities.
"Maturity" when used with respect to any Debt Security means the date
on which the principal of such Debt Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption,
repayment at the option of the Holder thereof or otherwise.
"Officers' Certificate" means a certificate signed by any two of the
Chairman, a Vice Chairman, the President, the Chief Financial Officer, an
Executive Vice President, any Vice President, the Treasurer, the Controller
or the Secretary of the Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Company (including an employee of the Company) and who shall
be reasonably satisfactory to the Trustee, which is delivered to the
Trustee.
"Outstanding" when used with respect to Debt Securities, means, as of
the date of determination, all Debt Securities theretofore authenticated
and delivered under this Indenture, except:
(i) Debt Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Debt Securities with respect to which payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Debt Securities and any Coupons
thereto pertaining; provided, however, that if such Debt Securities are to
-------- -------
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) Debt Securities which have been paid pursuant to Section 3.06
or in exchange for or in lieu of which other Debt Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Debt Securities in respect of which there shall have been presented to the
Trustee proof reasonably satisfactory to it that such Debt Securities are
held by a bona fide purchaser in whose hands such Debt Securities are valid
obligations of the Company;
-7-
<PAGE>
provided, however, that in determining whether the Holders of the requisite
-------- -------
principal amount of Debt Securities Outstanding have performed any Act
hereunder, Debt Securities owned by the Company or any other obligor upon
the Debt Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Trustee shall be protected in relying upon any
such Act, only Debt Securities which a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded. Debt Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right
to act with respect to such Debt Securities and that the pledgee is not the
Company or any other obligor upon the Debt Securities or any Affiliate of
the Company or of such other obligor. In determining whether the Holders
of the requisite principal amount of Outstanding Debt Securities have
performed any Act hereunder, the principal amount of a Discount Security
that shall be deemed to be Outstanding for such purpose shall be the amount
of the principal thereof that would be due and payable as of the date of
such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.02 and the principal amount of a Debt
Security denominated in a Foreign Currency that shall be deemed to be
Outstanding for such purpose shall be the amount calculated pursuant to
Section 3.10(k).
"Overdue Rate", when used with respect to any series of the Debt
Securities, means the rate designated as such in or pursuant to the Board
Resolution or the supplemental indenture, as the case may be, relating to
such series as contemplated by Section 3.01.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities on
behalf of the Company.
"permanent Global Note" shall have the meaning given such term in
Section 3.04(b).
"Person" means any individual, Corporation, partnership, joint
venture, association, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" when used with respect to the Debt Securities of
any series means the place or places where the principal of (and premium,
if any) and interest on the Debt Securities of that series are payable as
specified pursuant to Section 3.01.
"Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or a portion of the same debt as that
evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section
3.06 in lieu of a mutilated, lost, destroyed or stolen Debt Security or a
Debt Security to which a mutilated, lost, destroyed or stolen Coupon
-8-
<PAGE>
appertains shall be deemed to evidence the same debt as the mutilated,
lost, destroyed or stolen Debt Security or the Debt Security to which the
mutilated, lost, destroyed or stolen Coupon appertains, as the case may be.
"Redemption Date" means the date fixed for redemption of any Debt
Security pursuant to this Indenture which, in the case of a Floating Rate
Security, unless otherwise specified pursuant to Section 3.01, shall be an
Interest Payment Date only.
"Redemption Price" means, in the case of a Discount Security, the
amount of the principal thereof that would be due and payable as of the
Redemption Date upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.02 or any other redemption specified pursuant to
Section 3.01, and in the case of any other Debt Security, the principal
amount thereof, plus, in each case, premium, if any, and accrued and unpaid
interest, if any, to the Redemption Date.
"Registered Holder" means the Person in whose name a Registered
Security is registered in the Security Register.
"Registered Security" means any Debt Security in the form established
pursuant to Section 2.01 which is registered as to principal and interest
in the Security Register.
"Regular Record Date" for the interest payable on the Registered
Securities of any series on any Interest Payment Date means the date
specified for the purpose pursuant to Section 3.01 for such Interest
Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee with direct responsibility for the administration of
this Indenture and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05(a).
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.07(c)(i).
"Specified Amount" has the meaning specified in Section 3.10(i).
"Stated Maturity" when used with respect to any Debt Security or any
installment of principal thereof or premium thereon or interest thereon
means the date specified in such Debt Security or the Coupon, if any,
representing such installment of interest, as the date on which the
principal of such Debt Security or such installment of principal, premium
or interest is due and payable.
"Subsidiary" means any Corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to
elect a majority
-9-
<PAGE>
of the directors of such corporation, irrespective of whether or not, at
the Time, stock of any other class or classes of such Corporation shall
have or might have voting power by reason of the happening of any
contingency, is at the time, directly or indirectly, owned or controlled by
the Company or by one or more Subsidiaries thereof, or by the Company and
one or more Subsidiaries thereof.
"Subsidiary Guarantees" means the Guarantees of each Guarantor in the
form determined pursuant to Section 2.01 and as provided in Article
Sixteen.
"Subsidiary Guarantor" means each of (i) The Money Store/D.C. Inc.,
The Money Store/Kentucky Inc., The Money Store/Minnesota Inc., The Money
Store Auto Finance Inc., ClassNotes Inc., Dyna-Mark, Inc., Equity Insurance
Agency, Inc., Major Brokerage Co., Inc., Princeton Escrow, The Money Store
Home Equity Corp., The Money Store Investment Corporation, The Money Store
of New York Inc., The Commerce Group, The Money Store Commercial Mortgage
Inc., The Money Store Service Corp., TMS Mortgage Inc., The Money Store
U.K. Inc., The Money Store Realty Inc., TMS Venture Holdings, Inc.; and
(ii) any successor of any of the foregoing, in each case until such
Subsidiary Guarantor ceases to be such in accordance with the terms hereof.
"temporary Global Note" shall have the meaning given such term in
Section 3.04(b).
"Trade Payables" means accounts payable or any other indebtedness or
monetary obligations to trade creditors created or assumed in the ordinary
course of business in connection with the obtaining of materials or
services.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Debt Securities of any series shall
mean the Trustee with respect to Debt Securities of such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended and as in force at the date as of which this instrument was
executed, except as provided in Section 11.05; provided, however, that in
-------- -------
the event the Trust Indenture Act is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act as so amended.
"United States" means the United States of America (including the
States and the District of Columbia), and its possessions, which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and
the Northern Mariana Islands.
"U.S. Depositary" means a clearing agency registered under the
Exchange Act or any successor thereto, which shall in either case be
designated by the Company pursuant to Section 3.01 until a successor U.S.
Depositary shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "U.S. Depositary" shall mean or include each
Person who is then a U.S. Depositary hereunder, and if at any time there is
more than one such Person, "U.S. Depositary" as used with respect to the
Debt Securities of any series shall mean the U.S. Depositary with respect
to the Debt Securities of that series.
"U.S. Government Obligations" has the meaning specified in Section
15.02.
"U.S. Person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under
the laws of the United States, or an estate or trust the income of which is
subject to United States Federal income taxation regardless of its source.
-10-
<PAGE>
"Valuation Date" has the meaning specified in Section 3.10(d).
"Vice President" includes with respect to the Company and the Trustee,
any Vice President of the Company or the Trustee, as the case may be,
whether or not designated by a number or word or words added before or
after the title "Vice President".
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the
outstanding voting stock (other than directors' qualifying shares) is at
the time, directly or indirectly, owned by the Company, or by one or more
Wholly-Owned Subsidiaries of the Company or by the Company and one or more
Wholly-Owned Subsidiaries of the Company.
Section 1.02. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture (other
than certificates provided pursuant to Section 12.02) shall include:
(1) a statement that each individual signing such Officers'
Certificate or Opinion of Counsel has read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
-11-
<PAGE>
Section 1.03. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.04. Notices, etc., to Trustee and Company.
-------------------------------------
Any Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Administration.
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid or airmail postage
prepaid if sent from outside the United States, to the Company addressed to
it at the address of its principal office specified in the first paragraph
of this Indenture, to the attention of its Treasurer, or at any other
address previously furnished in writing to the Trustee by the Company.
Any such Act or other document shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
-12-
<PAGE>
Section 1.05. Notice to Holders; Waiver.
-------------------------
When this Indenture provides for notice to Holders of any event, (1)
such notice shall be sufficiently given to Registered Holders (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to such Registered Holders as their names and addresses appear in the
Security Register, within the time prescribed, and (2) such notice shall be
sufficiently given to Holders of Bearer Securities or Coupons (unless otherwise
herein expressly provided) if published at least twice in an Authorized
Newspaper or Newspapers in The City of New York and, if Debt Securities of such
series are then listed on The Stock Exchange of the United Kingdom and the
Republic of Ireland or the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, in a
daily newspaper or financial journal in London or Luxembourg or in such other
city or cities specified pursuant to Section 3.01 or in any Debt Security on
Business Days, the first such publication to be not earlier than the earliest
date and not later than the latest date prescribed for the giving of such
notice; provided, however, that, in any case, any notice to Holders of Floating
-------- -------
Rate Securities regarding the determination of a periodic rate of interest, if
such notice is required pursuant to Section 3.01, shall be sufficiently given if
given in the manner specified pursuant to Section 3.01.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, such notification
as shall be given with the approval of the Trustee shall constitute sufficient
notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspapers
or by reason of any other cause it shall be impracticable to give notice by
publication, such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance on such waiver. In any case where notice to Holders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders, and any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given. In any case
where notice to Holders is given by publication, any defect in any notice so
published as to any particular Holder shall not affect the sufficiency of such
notice with respect to other Holders, and any notice which is published in the
manner herein provided shall be conclusively presumed to have been duly given.
-13-
<PAGE>
Section 1.06. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with the duties
imposed on any person by the provisions of Sections 310 to 317, inclusive, of
the Trust Indenture Act, such duties imposed by the Trust Indenture Act shall
control.
Section 1.07. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.08. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the parties hereto
shall bind their respective successors and assigns and inure to the benefit of
their permitted successors and assigns, whether so expressed or not.
Section 1.09. Separability Clause.
-------------------
In case any provision in this Indenture or in the Debt Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 1.10. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Debt Securities, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent and their successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.11. Governing Law.
-------------
This Indenture, the Debt Securities and the Coupons shall be deemed to
be contracts made and to be performed entirely in the State of New York, and for
all purposes shall be governed by and construed in accordance with the laws of
said State without regard to the conflicts of law rules of said State.
Section 1.12. Legal Holidays.
--------------
Unless otherwise specified pursuant to Section 3.01 or in any Debt
Security, in any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debt Security of any series shall not be a Business Day at any
Place of Payment for the Debt Securities of that series, then (notwithstanding
any other provision of this Indenture or of the Debt Securities or Coupons)
payment of principal (and premium, if any) or interest need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment
-14-
<PAGE>
Date, Redemption Date or at the Stated Maturity, and no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to such Business Day if
such payment is made or duly provided for on such Business Day.
Section 1.13. No Security Interest Created.
----------------------------
Nothing in this Indenture or in the Debt Securities or Coupons,
express or implied, shall be construed to constitute a security interest or
mortgage or other pledge of collateral under the Uniform Commercial Code or
similar legislation or real property laws, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.
Section 1.14. Liability Solely Corporate.
--------------------------
No recourse shall be had for the payment of the principal of (or
premium, if any) or the interest on any Debt Securities or Coupons, or any part
thereof, or of the indebtedness represented thereby, or upon any obligation,
covenant or agreement of this Indenture, against any incorporator, or against
any stockholder, officer or director, as such, past, present or future, of the
Company (or any incorporator, stockholder, officer or director of any
predecessor or successor corporation), either directly or through the Company
(or any such predecessor or successor corporation), whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that this
Indenture and all the Debt Securities and Coupons are solely corporate
obligations, and that no personal liability whatsoever shall attach to, or be
incurred by, any such incorporator, stockholder, officer or director, past,
present or future, of the Company (or any incorporator, stockholder, officer or
director of any such predecessor or successor corporation), either directly or
indirectly through the Company or any such predecessor or successor corporation,
because of the indebtedness hereby authorized or under or by reason of any of
the obligations, covenants, promises or agreements contained in this Indenture
or in any of the Debt Securities or Coupons or to be implied herefrom or
therefrom; and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of this Indenture and the issue of Debt Securities; provided, however, that
-------- -------
nothing herein or in the Debt Securities or Coupons contained shall be taken to
prevent recourse to and the enforcement of the liability, if any, of any
stockholder or subscriber to capital stock upon or in respect of the shares of
capital stock not fully paid.
-15-
<PAGE>
Section 1.15. Counterparts.
------------
This Indenture may be executed in counterparts (including executed
counterparts delivered and exchanged by facsimile transmission) each of which
shall be deemed to constitute one and the same instrument.
ARTICLE TWO
DEBT SECURITY FORMS
Section 2.01. Forms Generally.
---------------
The Debt Securities and the Coupons and Subsidiary Guarantees, if any,
of each series shall be substantially in one of the forms (including global
form) established in or pursuant to a Board Resolution or one or more indentures
supplemental hereto, and shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
or designation and such legends or endorsements placed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange on which any series of the Debt Securities may be listed, or
to conform to usage, all as determined by the officers executing such Debt
Securities and Coupons and Subsidiary Guarantees as conclusively evidenced by
their execution of such Debt Securities and Coupons and Subsidiary Guarantees.
If the form of a series of Debt Securities or Coupons (or any Global Note) or
Subsidiary Guarantees is established in or pursuant to a Board Resolution, a
copy of such Board Resolution shall be delivered to the Trustee, together with
an Officers' Certificate setting forth the form of such series, at or prior to
the delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Debt Securities (or any such Global Note) or
Coupons. Any form of Debt Security, Coupon, Global Note or Subsidiary Guarantees
approved by or pursuant to a Board Resolution shall be reasonably acceptable as
to form to the Trustee, such acceptance to be evidenced by the Trustee's
authentication of the Debt Securities, Coupons, Global Notes or Subsidiary
Guarantees in such form or by a certificate signed by a Responsible Officer of
the Trustee delivered to the Company.
Unless otherwise specified as contemplated by Section 3.01, Debt
Securities in bearer form (other than in global form) shall have Coupons
attached.
The definitive Debt Securities and Coupons, if any, of each series
shall be printed, lithographed or engraved or produced by any combination of
these methods on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Debt Securities and Coupons, as
conclusively evidenced by their execution of such Debt Securities and Coupons.
-16-
<PAGE>
Section 2.02. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The form of the Trustee's certificate of authentication to be borne by
the Debt Securities shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
issued under the within mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By ___________________________
Authorized Officer
Section 2.03. Securities in Global Form.
-------------------------
If any Debt Security of a series is issuable in global form, the
Global Note so issued may provide that it shall represent the aggregate amount
of Outstanding Debt Securities from time to time endorsed thereon and may also
provide that the aggregate amount of Outstanding Debt Securities represented
thereby may from time to time be reduced or increased to reflect exchanges. Any
endorsement of a Global Note to reflect the amount, or any increase or decrease
in the amount, of Outstanding Debt Securities represented thereby shall be made
by the Trustee and in such manner as shall be specified in such Global Note.
Any instructions by the Company with respect to a Global Note, after its initial
issuance, shall be in writing but need not comply with Section 1.02.
Global Notes may be issued in either registered or bearer form and in
either temporary or permanent form. Permanent Global Notes will be issued in
definitive form.
ARTICLE THREE
THE DEBT SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be issued from time to time in one or more
series. There shall be established in or pursuant to a Board Resolution and
(subject to Section 3.03) set forth in
-17-
<PAGE>
an Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Debt Securities of any series:
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of such series from all other series of
Debt Securities);
(2) the limit, if any, upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of such series pursuant to Sections 3.04, 3.05, 3.06, 11.06 or
13.07);
(3) the percentage of the principal amount at which the Debt
Securities will be issued and, if other than the principal amount thereof,
the portion of the principal amount thereof payable upon declaration of
acceleration of the Maturity thereof or the method by which such portion
shall be determined;
(4) the date or dates on which or periods during which the Debt
Securities of the series may be issued, and the date or dates (or the
method of determination thereof) on which the principal of (and premium, if
any, on) the Debt Securities of such series are or may be payable (which,
if so provided in such Board Resolution or supplemental indenture, may be
determined by the Company from time to time and set forth in the Debt
Securities of the series issued from time to time);
(5) the rate or rates (or the method of determination thereof) at
which the Debt Securities of the series shall bear interest, if any, and
the dates from which such interest shall accrue (which, in either case or
both, if so provided in such Board Resolution or supplemental indenture,
may be determined by the Company from time to time and set forth in the
Debt Securities of the series issued from time to time); and the Interest
Payment Dates on which such interest shall be payable (or the method of
determination thereof), and, in the case of Registered Securities, the
Regular Record Dates for the interest payable on such Interest Payment
Dates and, in the case of Floating Rate Securities, the notice, if any, to
Holders regarding the determination of interest and the manner of giving
such notice;
(6) the place or places where the principal of (and premium, if any)
and interest on Debt Securities of the series shall be payable; the extent
to which, or the manner in which, any interest payable on any Global Note
on an Interest Payment Date will be paid, if other than in the manner
provided in Section 3.07; the extent, if any, to which the provisions of
the last sentence of Section 12.01 shall apply to the Debt Securities of
the series; and the manner in which any principal of, or premium, if any,
on, any Global Note will be paid, if other than as set forth elsewhere
herein;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Debt Securities of the series pursuant to any mandatory
redemption, sinking fund or analogous
-18-
<PAGE>
provisions or at the option of the Holder and the period or periods within
which or the dates on which, the prices at which and the terms and
conditions upon which Debt Securities of the series shall be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation;
(8) the right, if any, of the Company to redeem the Debt Securities of
such series, in whole or in part, at its option and the period or periods
within which, or the date or dates on which, the price or prices at which,
and the terms and conditions upon which Debt Securities of the series may
be redeemed, if any, in whole or in part, at the option of the Company or
otherwise;
(9) if the coin or Currency in which the Debt Securities shall be
issuable is in Dollars, the denominations of such Debt Securities if other
than denominations of $1,000 and any integral multiple thereof (except as
provided in Section 3.04);
(10) whether the Debt Securities of the series are to be issued as
Discount Securities and the amount of discount with which such Debt
Securities may be issued and, if other than the principal amount thereof,
the portion of the principal amount of Debt Securities of the series which
shall be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 5.02;
(11) provisions, if any, for the defeasance of the Debt Securities of
such series or certain of the Company's obligations with respect to the
Debt Securities;
(12) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer
Securities are issued, whether Coupons will be attached thereto, whether
Bearer Securities of the series may be exchanged for Registered Securities
of the series, as provided in Section 3.05(b) or otherwise and the
circumstances under which and the place or places at which any such
exchanges, if permitted, may be made;
(13) whether provisions for payment of additional amounts or tax
redemptions shall apply and, if such provisions shall apply, such
provisions; and, if Bearer Securities of the series are to be issued,
whether a procedure other than that set forth in Section 3.04(b) shall
apply and, if so, such other procedure, and if the procedure set forth in
Section 3.04(b) shall apply, the forms of certifications to be delivered
under such procedure;
(14) if other than Dollars, the Foreign Currency or Currencies or
Currency Unit in which Debt Securities of the series shall be denominated
or in which payment of the principal of (and/or premium, if any) and/or
interest on the Debt Securities of the series may be made, and the
particular provisions applicable thereto and, if applicable, the amount of
Debt Securities of the series which entitles the Holder of a Debt Security
of the series or its proxy to one vote for purposes of Section 9.06;
-19-
<PAGE>
(15) if the principal of (and premium, if any) or interest on Debt
Securities of the series are to be payable, at the election of the Company
or a Holder thereof, in a Currency other than that in which the Debt
Securities are denominated or payable without such election, in addition to
or in lieu of the provisions of Section 3.10, the period or periods within
which and the terms and conditions upon which, such election may be made
and the time and the manner of determining the exchange rate or rates
between the Currency or Currencies in which the Debt Securities are
denominated or payable without such election and the Currency or Currencies
in which the Debt Securities are to be paid if such election is made;
(16) the date as of which any Debt Securities of the series shall be
dated, if other than as set forth in Section 3.03;
(17) if the amount of payments of principal of (and premium, if any)
or interest on the Debt Securities of the series may be determined with
reference to an index, including, but not limited to, an index based on a
Currency or Currencies other than that in which the Debt Securities are
denominated or payable, or any other type of index, the manner in which
such amounts shall be determined;
(18) if the Debt Securities of the series are denominated or payable
in a Foreign Currency, any other terms concerning the payment of principal
of (and premium, if any) or any interest on such Debt Securities (including
the Currency or Currencies of payment thereof);
(19) the designation of the original Currency Determination Agent, if
any;
(20) the applicable Overdue Rate, if any;
(21) if the Debt Securities of the series do not bear interest, the
applicable dates for purposes of Section 7.01;
(22) any addition to, or modification or deletion of, any Events of
Default or covenants provided for with respect to Debt Securities of the
series;
(23) if Bearer Securities of the series are to be issued, (x) whether
interest in respect of any portion of a temporary Debt Security in global
form (representing all of the Outstanding Bearer Securities of the series)
payable in respect of any Interest Payment Date prior to the exchange of
such temporary Debt Security for definitive Debt Securities of the series
shall be paid to any clearing organization with respect to the portion of
such temporary Debt Security held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which
any such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such Interest
Payment Date, (y) the terms upon which interests in such temporary Debt
Security in global form may be exchanged for interests in a permanent
-20-
<PAGE>
Global Note or for definitive Debt Securities of the series and the terms
upon which interests in a permanent Global Note, if any, may be exchanged
for definitive Debt Securities of the series and (z) the cities in which
the Authorized Newspapers designated for the purposes of giving notices to
Holders are published;
(24) whether the Debt Securities of the series shall be issued in
whole or in part in the form of one or more Global Notes and, in such case,
the U.S. Depositary or any Common Depositary for such Global Note or Notes;
and if the Debt Securities of the series are issuable only as Registered
Securities, the manner in which and the circumstances under which Global
Notes representing Debt Securities of the series may be exchanged for
Registered Securities in definitive form, if other than, or in addition to,
the manner and circumstances specified in Section 3.04(c);
(25) the designation, if any, of the U.S. Depositary; and the
designation of any trustees (other than the Trustee), depositaries,
Authenticating Agents, Paying Agents, Security Registrars, or any other
agents with respect to the Debt Securities of such series;
(26) if the Debt Securities of such series are to be issuable in
definitive form (whether upon original issuance or upon exchange of a
temporary Debt Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, the
form and terms of such certificates, documents or conditions; and
(27) any other terms of the series (which other terms shall not be
inconsistent with the provisions of this Indenture).
All Debt Securities of any one series and Coupons, if any, shall be
substantially identical to all other Debt Securities of such series except as to
denomination, rate of interest, Stated Maturity and the date from which
interest, if any, shall accrue, which, as set forth above, may be determined by
the Company from time to time as to Debt Securities of a series if so provided
in or established pursuant to the authority granted in a Board Resolution or in
any such indenture supplemental hereto, and except as may otherwise be provided
in or pursuant to such Board Resolution and (subject to Section 3.03) set forth
in such Officers' Certificate, or in any such indenture supplemental hereto.
All Debt Securities of any one series need not be issued at the same time, and
unless otherwise provided, a series may be reopened for issuance of additional
Debt Securities of such series.
If any of the terms of a series of Debt Securities is established in
or pursuant to a Board Resolution, a copy of such Board Resolution shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 3.02. Denominations.
-------------
In the absence of any specification pursuant to Section 3.01 with
respect to the Debt Securities of any series, the Debt Securities of such series
shall be issuable only as
-21-
<PAGE>
Registered Securities in denominations of $1,000 and any integral multiple
thereof and shall be payable only in Dollars.
Section 3.03. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Debt Securities and the Coupons and Subsidiary Guarantees, if any,
of any series shall be executed on behalf of the Company or the Subsidiary
Guarantors, as the case may be, by its Chairman, a Vice Chairman, its President,
one of its Executive Vice Presidents, its Vice Presidents or its Treasurer,
under its corporate seal reproduced thereon and attested by its Secretary or one
of its Assistant Secretaries. The signature of any of these officers may be
manual or facsimile.
Debt Securities and Coupons and Subsidiary Guarantees bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Company or the Subsidiary Guarantors, as the case may be, shall
bind the Company or the Subsidiary Guarantors, as the case may be,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debt Securities and
Coupons and Subsidiary Guarantees or did not hold such offices at the date of
such Debt Securities and Coupons and Subsidiary Guarantees.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debt Securities, with appropriate
Coupons, if any, having endorsed thereon the Subsidiary Guarantees, if
applicable, of any series, executed by the Company, to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Debt Securities and Coupons and the Trustee in accordance with
the Company Order shall authenticate and deliver such Debt Securities and
Coupons; provided, however, that, in connection with its sale during the
-------- -------
"restricted period" (as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United
States Treasury Regulations), no Bearer Security shall be mailed or otherwise
delivered to any location in the United States; and provided, further, that a
-------- -------
Bearer Security (other than a temporary Global Note in bearer form) may be
delivered outside the United States in connection with its original issuance
only if the Person entitled to receive such Bearer Security shall have furnished
to the Euro-clear Operator or to CEDEL a certificate substantially in the form
set forth in Exhibit A to this Indenture and if the Euro-clear Operator or CEDEL
has furnished the Trustee a certificate substantially in the form set forth in
Exhibit B. If all the Debt Securities of any one series are not to be issued at
one time and if a Board Resolution or supplemental indenture relating to such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Debt Securities and other matters which
are subject to variation, such as interest rate, Stated Maturity, date of
issuance and date from which interest, if any, shall accrue. If any Debt
Security shall be represented by a permanent Global Note, then, for purposes of
this Section and Section 3.04, the notation by the Common Depositary of a
beneficial owner's interest therein upon original issuance of such Debt Security
or upon exchange of a portion of a temporary Global Note shall be deemed to be
delivery in connection with the original issuance of such beneficial owner's
interest in such permanent Global Note. Except as permitted by Section 3.06 or
3.07, the Trustee shall not authenticate and deliver any Bearer Security unless
all Coupons for interest then matured have been detached and canceled.
The Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, prior to the authentication and
delivery of the Debt Securities and
-22-
<PAGE>
Coupons, if any, of any series, (i) the supplemental indenture or the Board
Resolution by or pursuant to which the form and terms of such Debt Securities
and Coupons have been approved, (ii) the certificates and opinions required
pursuant to Section 1.02 and (iii) one or more Opinions of Counsel substantially
to the effect that:
(1) all instruments furnished by the Company to the Trustee in
connection with the authentication and delivery of such Debt Securities and
Coupons, if any, conform to the requirements of this Indenture and
constitute sufficient authority hereunder for the Trustee to authenticate
and deliver such Debt Securities and Coupons, if any;
(2) the forms and terms of such Debt Securities and Coupons, if any,
have been established in conformity with the provisions of this Indenture;
(3) in the event that the forms or terms of such Debt Securities and
Coupons, if any, have been established in a supplemental indenture, the
execution and delivery of such supplemental indenture has been duly
authorized by all necessary corporate action of the Company, such
supplemental indenture has been duly executed and delivered by the Company
and, assuming due authorization, execution and delivery by the Trustee, is
a valid and binding obligation enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(4) the execution and delivery of such Debt Securities and Coupons, if
any, have been duly authorized by all necessary corporate action of the
Company and such Debt Securities and Coupons, if any, have been duly
executed by the Company and, assuming due authentication by the Trustee and
delivery by the Company, are valid and binding obligations enforceable
against the Company in accordance with their terms, entitled to the benefit
of the Indenture, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and subject to
such other exceptions as counsel shall reasonably request and as to which
the Trustee shall not reasonably object; and
(5) to the best of such counsel's knowledge, all governmental
consents, authorizations and approvals which are required for the execution
and delivery of the Indenture and the Debt Securities under all applicable
New York laws, if any, have been received other than such as may be
required by the securities or blue sky laws of the various states in
connection with the offer and sale of the Debt Securities.
For purposes of this opinion, such counsel may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Company or upon certificates of public
officials and such opinion may contain assumptions,
-23-
<PAGE>
limitations, exceptions and restrictions which are reasonably satisfactory to
the Trustee and its counsel.
The Trustee shall not be required to authenticate any Debt Securities
and Coupons if the issuance of such Debt Securities and Coupons pursuant to this
Indenture will affect the Trustee's own rights, duties or immunities under the
Debt Securities and this Indenture in a manner which is not reasonably
acceptable to the Trustee.
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security (including any temporary or permanent or
other definitive Bearer Security in global form) shall be dated as of the date
of original issuance of the first Debt Security of such series to be issued,
except as otherwise provided pursuant to Section 3.01 with respect to the Bearer
Securities of any series.
No Debt Security or Subsidary Guarantee endorsed thereon, if
applicable, shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Debt Security a
certificate of authentication substantially in one of the forms provided for
herein duly executed by the Trustee or by an Authenticating Agent, and such
certificate upon any Debt Security shall be conclusive evidence, and the only
evidence, that such Debt Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Debt Security shall have been duly authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Debt Security to the Trustee for cancellation as provided in
Section 3.08 together with a written statement (which need not comply with
Section 1.02) stating that such Debt Security has never been issued and sold by
the Company, for all purposes of this Indenture such Debt Security shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Indenture.
Section 3.04. Temporary Debt Securities; Exchange of Temporary Global
-------------------------------------------------------
Notes for Definitive Bearer Securities.
- ----- --------------------------------
(a) Pending the preparation of definitive Registered Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Registered Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination for Registered Securities of such series, substantially of the
tenor of the definitive Registered Securities in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Registered Securities may determine,
as conclusively evidenced by their execution of such Registered Securities.
Every such temporary Registered Security shall be executed by the Company and
shall be authenticated and delivered by the Trustee upon the same conditions and
in substantially the same manner, and with the same effect, as the definitive
Registered Securities in lieu of which they are issued. In the case of any
series issuable as Bearer Securities, such temporary Debt Securities may be in
global form, representing such of the Outstanding Debt Securities of such series
as shall be specified therein.
-24-
<PAGE>
Except in the case of temporary Debt Securities in global form (which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Debt Securities of any series are issued, the Company
will cause definitive Debt Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Debt Securities of such
series, the temporary Debt Securities of such series shall be exchangeable for
definitive Debt Securities of such series, of a like Stated Maturity and with
like terms and provisions, upon surrender of the temporary Debt Securities of
such series at the office or agency of the Company in a Place of Payment for
such series, without charge to the Holder, except as provided in Section 3.05 in
connection with a transfer. Upon surrender for cancellation of any one or more
temporary Debt Securities of any series (accompanied by any unmatured Coupons),
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Debt Securities of the
same series of authorized denominations and of a like Stated Maturity and like
terms and provisions; provided, however, that no definitive Bearer Security
-------- -------
shall be delivered in exchange for a temporary Registered Security; and
provided, further, that a definitive Bearer Security (including a permanent
- -------- -------
Bearer Security in global form) shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section
3.03. Until so exchanged, the temporary Registered Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Registered Securities of such series.
(b) Unless otherwise specified pursuant to Section 3.01, all Bearer
Securities of a series shall be initially issued in the form of a single
temporary Bearer Security in global form (a "temporary Global Note"). The
Company shall execute, and upon Company Order the Trustee shall authenticate,
any temporary Global Note and any permanent Bearer Security in global form (as
described below, a "permanent Global Note") upon the same conditions and in
substantially the same manner, and with the same effect, as definitive Bearer
Securities, and the temporary or permanent Global Note, as the case may be,
shall, unless otherwise specified therein, be delivered by the Trustee to the
London office of a depositary or common depositary (the "Common Depositary"),
for the benefit of the Euro-clear Operator or CEDEL, as the case may be, for
credit to the account of the Company (in the case of sales of Bearer Securities
by the Company directly to investors) or the managing underwriter (in the case
of sales of Bearer Securities by the Company to underwriters) or such other
accounts as the Company or the managing underwriter, respectively, may direct.
On or after the date specified in or determined pursuant to the terms
of any temporary Global Note which (subject to any applicable laws and
regulations) shall be at least 40 days after the issue date of a temporary
Global Note (the "Exchange Date"), the Debt Securities represented by such
temporary Global Note may be exchanged for definitive Debt Securities (subject
to the second succeeding paragraph) or Debt Securities to be represented
thereafter by one or more permanent Global Notes in definitive form without
Coupons. On or after the Exchange Date such temporary Global Note shall be
surrendered by the Common Depositary to the Trustee (or such other agent as is
specified for the purpose pursuant to Section 3.01), as the Company's agent for
such purpose at such place specified outside the United States pursuant to
Section 3.01 and following such surrender, the Trustee (or such other agent)
shall (1) endorse the
-25-
<PAGE>
temporary Global Note to reflect the reduction of its principal amount by an
equal aggregate principal amount of such Debt Security, (2) endorse the
applicable permanent Global Note, if any, to reflect the initial amount, or an
increase in the amount of Debt Securities represented thereby, (3) manually
authenticate such definitive Debt Securities (including any permanent Global
Note), (4) deliver such definitive Debt Securities to the Holder thereof or, if
such definitive Debt Security is a permanent Global Note, deliver such permanent
Global Note to the Common Depositary to be held outside the United States for
the accounts of the Euro-clear Operator or CEDEL, as the case may be, for credit
to the respective accounts at Euro-clear Operator or CEDEL, as the case may be,
designated by or on behalf of the beneficial owners of such Debt Securities (or
to such other accounts as they may direct) and (5) redeliver such temporary
Global Note to the Common Depositary, unless such temporary Global Note shall
have been canceled in accordance with Section 3.08 hereof; provided,
--------
however, that, unless otherwise specified in such temporary Global Note, upon
- -------
such presentation by the Common Depositary, such temporary Global Note shall be
accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by the Euro-clear Operator, as to the portion of such temporary Global
Note held for its account then to be exchanged for definitive Debt Securities
(including any permanent Global Note), and a certificate dated the Exchange Date
or a subsequent date and signed by CEDEL, as to the portion of such temporary
Global Note held for its account then to be exchanged for definitive Debt
Securities (including any permanent Global Note), each substantially in the form
set forth in Exhibit B to this Indenture. Each certificate substantially in the
form of Exhibit B hereto of the Euro-clear Operator or CEDEL, as the case may
be, shall be based on certificates of the account holders listed in the records
of the Euro-clear Operator or CEDEL, as the case may be, as being entitled to
all or any portion of the applicable temporary Global Note. An account holder
of the Euro-clear Operator or CEDEL, as the case may be, desiring to effect the
exchange of an interest in a temporary Global Note for an interest in definitive
Debt Securities (including any permanent Global Note) shall instruct the Euro-
clear Operator or CEDEL, as the case may be, to request such exchange on its
behalf and shall deliver to the Euro-clear Operator or CEDEL, as the case may
be, a certificate substantially in the form of Exhibit A hereto and dated no
earlier than 10 days prior to the Exchange Date. Until so exchanged, temporary
Global Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Debt Securities (including any permanent Global Note) of
the same series authenticated and delivered hereunder, except as to payment of
interest, if any.
The delivery to the Company, its agent or the Trustee by the Euro-
clear Operator or CEDEL of any certificate substantially in the form of Exhibit
B hereto may be relied upon by the Company, its agent and the Trustee as
conclusive evidence that a corresponding certificate or certificates has or have
been delivered to the Euro-clear Operator or CEDEL, as the case may be, pursuant
to the terms of this Indenture.
On or prior to the Exchange Date, the Company shall deliver to the
Trustee (or such other agent as may be specified as the Company's agent for such
purpose pursuant to Section 3.01) definitive Debt Securities in an aggregate
principal amount equal to the principal amount of such temporary Global Note,
executed by the Company. At any time on or after the Exchange Date, upon 30
days' notice to the Trustee (or such other agent as may be specified as
-26-
<PAGE>
the Company's agent for such purpose pursuant to Section 3.01) by the Euro-clear
Operator or CEDEL, as the case may be, acting at the request of or on behalf of
the beneficial owner, a Debt Security represented by a temporary Global Note or
a permanent Global Note, as the case may be, may be exchanged, in whole or from
time to time in part, for definitive Debt Securities without charge (except as
provided in Section 3.05) and the Trustee (or such agent) shall authenticate and
deliver, in exchange for each portion of such temporary Global Note or such
permanent Global Note, an equal aggregate principal amount of definitive Debt
Securities of the same series of authorized denominations and of a like Stated
Maturity and with like terms and conditions, as the portion of such temporary
Global Note or such permanent Global Note to be exchanged, which, unless the
Debt Securities of the series are not issuable both as Bearer Securities and as
Registered Securities, as contemplated by Section 3.01, shall be in the form of
Bearer Securities or Registered Securities, or any combination thereof, as shall
be specified by the beneficial owner thereof; provided, however, that definitive
-------- -------
Bearer Securities shall be delivered in exchange for a portion of the temporary
Global Note or the permanent Global Note only in compliance with the
requirements of the second preceding paragraph. On or prior to the forty-fifth
day following receipt by the Trustee (and such agent as may be specified as the
Company's agent for such purpose pursuant to Section 3.01) of such notice with
respect to a Debt Security, or, if such day is not a Business Day, the next
succeeding Business Day, the temporary Global Note or the permanent Global Note,
as the case may be, shall be surrendered by the Common Depositary to the Trustee
(or such other agent as may be specified as the Company's agent for such purpose
pursuant to Section 3.01), as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Debt Securities
without charge following such surrender, upon the request of the Euro-clear
Operator or CEDEL, as the case may be, and the Trustee (or such agent) shall (1)
endorse the applicable temporary Global Note or the permanent Global Note to
reflect the reduction of its principal amount by the aggregate principal amount
of such Debt Security, (2) cause the terms of such Debt Security and Coupons, if
any, to be entered on a definitive Debt Security, (3) manually authenticate such
definitive Debt Security, and (4) if a Bearer Security is to be delivered,
deliver such definitive Debt Security outside the United States to the Euro-
clear Operator or CEDEL, as the case may be, for or on behalf of the beneficial
owner thereof, in exchange for a portion of such temporary Global Note or the
permanent Global Note.
Unless otherwise specified in such temporary Global Note or the
permanent Global Note, any such exchange shall be made free of charge (except as
provided in Section 3.05) to the beneficial owners of such temporary Global Note
or the permanent Global Note, except that a Person receiving definitive Debt
Securities must bear the cost of insurance, postage, transportation and the like
in the event that such Person does not take delivery of such definitive Debt
Securities in person at the offices of the Euro-clear Operator or CEDEL.
Definitive Debt Securities in bearer form to be delivered in exchange for any
portion of a temporary Global Note or the permanent Global Note shall be
delivered only outside the United States. Notwithstanding the foregoing, in the
event of redemption or acceleration of all or any part of a temporary Global
Note prior to the Exchange Date, a permanent Global Note or definitive Bearer
Securities, as the case may be, will not be issuable in respect of such
temporary Global Note or such portion thereof, and payment thereon will instead
be made as provided in such temporary Global Note.
-27-
<PAGE>
Until exchanged in full as hereinabove provided, any temporary Global
Note or the permanent Global Note shall in all respects be entitled to the same
benefits under this Indenture as definitive Debt Securities of the same series
and tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 3.01, interest payable on such temporary
Global Note on an Interest Payment Date for Debt Securities of such series
occurring prior to the applicable Exchange Date shall be payable to the Euro-
clear Operator or CEDEL on such Interest Payment Date upon delivery by the Euro-
clear Operator or CEDEL to the Trustee of a certificate or certificates
substantially in the form set forth in Exhibit B to this Indenture, for credit
without further interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial owners of such
temporary Global Note on such Interest Payment Date and who have each delivered
to the Euro-clear Operator or CEDEL, as the case may be, a certificate
substantially in the form set forth in Exhibit A to this Indenture.
Any definitive Bearer Security authenticated and delivered by the
Trustee in exchange for a portion of a temporary Global Note or the permanent
Global Note shall not bear a coupon for any interest which shall theretofore
have been duly paid by the Trustee to the Euro-clear Operator or CEDEL, or by
the Company to the Trustee in accordance with the provisions of this Section
3.04.
Notwithstanding the provisions of Article Eleven of this Indenture,
with respect to Exhibits A and B to this Indenture, the Company may, in its
discretion and if required or desirable under applicable law, substitute one or
more other forms of such Exhibits for such Exhibits, eliminate the requirement
that any or all certificates be provided, or change the time that any
certificate may be required, provided that such substitute form or forms or
notice of elimination or change of such certification requirement have
theretofore been delivered to the Trustee (and any agent of the Company
appointed pursuant to Section 3.01 and referred to above) with a Company Request
and such form or forms, elimination or change is reasonably acceptable to the
Trustee (and any such agent). The Trustee shall have no responsibility for
determining whether any substitute form or forms, elimination or change is
permitted by or is in compliance with applicable law and shall have no liability
to the Company or any Holder therefor.
(c) If the Company shall establish pursuant to Section 3.01 that the
Registered Securities of a series are to be issued in whole or in part in the
form of one or more Global Notes, then the Company shall execute and the Trustee
shall, in accordance with Section 3.03 and the Company Order with respect to
such series, authenticate and deliver one or more Global Notes in temporary or
permanent form that (i) shall represent and shall be denominated in an amount
equal to the aggregate principal amount of the Outstanding Debt Securities of
such series to be represented by one or more Global Notes, (ii) shall be
registered in the name of the U.S. Depositary for such Global Note or Notes or
the nominee of such depositary, and (iii) shall bear a legend substantially to
the following effect: "This Debt 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
-28-
<PAGE>
nominee to a successor Depositary or a nominee of such successor Depositary,
unless and until this Debt Security is exchanged in whole or in part for Debt
Securities in definitive form."
Notwithstanding any other provision of this Section or Section 3.05,
unless and until it is exchanged in whole or in part for Registered Securities
in definitive form, a Global Note representing all or a portion of the
Registered Securities of a series may not be transferred except as a whole by
the U.S. Depositary for such series to a nominee of such depositary or by a
nominee of such depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a successor U.S.
Depositary for such series or a nominee of such successor depositary.
If at any time the U.S. Depositary for the Debt Securities of a series
notifies the Company that it is unwilling or unable to continue as U.S.
Depositary for the Debt Securities of such series or if at any time the U.S.
Depositary for Debt Securities of a series shall no longer be a clearing agency
registered and in good standing under the Exchange Act or other applicable
statute or regulation, the Company shall appoint a successor U.S. Depositary
with respect to the Debt Securities of such series. If a successor U.S.
Depositary for the Debt Securities of such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Debt Securities
of such series, will authenticate and deliver, Registered Securities of such
series in definitive form in an aggregate principal amount equal to the
principal amount of the Global Note or Notes representing such series in
exchange for such Global Note or Notes.
The Company may at any time and in its sole discretion determine that
the Registered Securities of any series issued in the form of one or more Global
Notes shall no longer be represented by such Global Note or Notes. In such
event, the Company will execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of definitive Debt Securities of such
series, will authenticate and deliver, Registered Securities of such series in
definitive form and in an aggregate principal amount equal to the principal
amount of the Global Note or Notes representing such series in exchange for such
Global Note or Notes.
If the Registered Securities of any series shall have been issued in
the form of one or more Global Notes and if an Event of Default with respect to
the Debt Securities of such series shall have occurred and be continuing, the
Company will promptly execute, and the Trustee, upon receipt of a Company Order
for the authentication and delivery of definitive Debt Securities of such
series, will authenticate and deliver, Registered Securities of such series in
definitive form and in an aggregate principal amount equal to the principal
amount of the Global Note or Notes representing such series in exchange for such
Global Note or Notes.
If specified by the Company pursuant to Section 3.01 with respect to
Registered Securities of a series, the U.S. Depositary for such series of
Registered Securities may surrender a Global Note for such series of Debt
Securities in exchange in whole or in part for Registered Securities of such
series in definitive form on such terms as are acceptable to the Company and
-29-
<PAGE>
such depositary. Thereupon, the Company shall execute and the Trustee shall
authenticate and deliver, without charge (except as provided in Section 3.05):
(i) to each Person specified by the U.S. Depositary a new Registered
Security or Securities of the same series, of any authorized denomination
as requested by such Person in an aggregate principal amount equal to and
in exchange for such Person's beneficial interest in the Global Note; and
(ii) to the U.S. Depositary a new Global Note in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Note and the aggregate principal amount of Registered Securities
delivered to Holders thereof.
Upon the exchange of a Global Note for Registered Securities in
definitive form, such Global Note shall be canceled by the Trustee. Debt
Securities issued in exchange for a Global Note pursuant to this subsection (c)
shall be registered in such names and in such authorized denominations as the
U.S. Depositary for such Global Note, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debt Securities to the Persons in whose names such Debt
Securities are so registered.
Section 3.05. Registration, Transfer and Exchange.
-----------------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the registers maintained in such office and in any
other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Registered Securities and of transfers and exchanges of
Registered Securities. The Trustee is hereby appointed "Security Registrar" for
the purpose of registering Registered Securities and registering transfers and
exchanges of Registered Securities as herein provided; provided, however, that
-------- -------
the Company may appoint co-Security Registrars.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee, one or more new Registered
Securities of the same series of like aggregate principal amount of such
denominations as are authorized for Registered Securities of such series and of
a like Stated Maturity and with like terms and conditions.
Except as otherwise provided in Section 3.04 and this Section 3.05, at
the option of the Holder, Registered Securities of any series may be exchanged
for other Registered Securities of the same series of like aggregate principal
amount and of a like Stated Maturity and with like terms and conditions, upon
surrender of the Registered Securities to be exchanged at such office or agency.
Whenever any Registered Securities are 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.
-30-
<PAGE>
(b) If and to the extent specified pursuant to Section 3.01, the
provisions of this Section 3.05(b) shall be applicable to Debt Securities of any
series which are Bearer Securities. At the option of the Holder thereof, to the
extent permitted by law, any Bearer Security of any series which by its terms is
registrable as to principal and interest may be exchanged for a Registered
Security of such series of like aggregate principal amount and of a like Stated
Maturity and with like terms and conditions upon surrender of such Bearer
Security at the Corporate Trust Office or at any other office or agency of the
Company designated pursuant to Section 3.01 for the purpose of making any such
exchanges. Any Coupon Security surrendered for exchange shall be surrendered
with all unmatured Coupons and any matured Coupons in default attached thereto.
If the Holder of a Bearer Security 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 and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer Security shall surrender to any Paying
Agent any such missing Coupon in respect of which such a payment shall have been
made, such Holder shall be entitled to receive the amount of such payment;
provided, however, that except as otherwise provided in Section 12.03, interest
- -------- -------
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in exchange for a Registered Security
of the same series and of a like Stated Maturity and with like terms and
conditions after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the Coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be (or, if such Coupon is so
surrendered with such Bearer Security, such Coupon shall be returned to the
Person so surrendering the Bearer Security), and interest or Defaulted Interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture. The Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Security or Securities which the Holder making the
exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to Debt Securities in effect at the time of
such exchange.
(c) Except as otherwise specified pursuant to Section 3.01, in no
event may Registered Securities, including Registered Securities received in
exchange for Bearer Securities, be exchanged for Bearer Securities.
-31-
<PAGE>
(d) All Debt Securities issued upon any registration of transfer or
exchange of Debt Securities shall be valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Debt Securities surrendered for such registration of transfer
or exchange.
Every Registered Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge will be made for any registration of transfer or
exchange of Debt Securities except as provided in Section 3.04(b) or 3.06. The
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Debt Securities, other than those expressly provided in
this Indenture to be made at the Company's own expense or without expense or
without charge to the Holders.
The Company shall not be required (i) to register, register the
transfer of or exchange Debt Securities of any series during a period beginning
at the opening of business 15 days before the day of the transmission of a
notice of redemption of Debt Securities of such series selected for redemption
under Section 13.03 and ending at the close of business on the day of such
transmission, or (ii) to register, register the transfer of or exchange any Debt
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Debt Security being redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt Securities.
-----------------------------------------------------
If (i) any mutilated Debt Security or any mutilated Coupon with the
Coupon Security to which it appertains (and all unmatured Coupons attached
thereto) is surrendered to the Trustee, or (ii) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Debt Security or any Coupon, and there is delivered to the Company and the
Trustee such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, and neither the Company nor the
Trustee receives notice that such Debt Security or Coupon has been acquired by a
bona fide purchaser, then the Company shall execute and upon Company Request the
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Debt Security or in exchange for the Coupon
Security to which such mutilated, destroyed, lost or stolen Coupon appertained,
a new Debt Security of the same series of like Stated Maturity and with like
terms and conditions and like principal amount, bearing a number not
contemporaneously Outstanding, and, in the case of a Coupon Security, with such
Coupons attached thereto that neither gain nor loss in interest shall result
from such exchange or substitution.
In case any such mutilated, destroyed, lost or stolen Debt Security or
Coupon has become or is about to become due and payable, the Company in its
discretion may, instead of
-32-
<PAGE>
issuing a new Debt Security, pay the amount due on such Debt Security or Coupon
in accordance with its terms; provided, however, that principal of (and premium,
-------- -------
if any) and any interest on Bearer Securities shall, except as otherwise
provided in Section 12.03, be payable only at an office or agency located
outside the United States and, unless otherwise specified as contemplated by
Section 3.01 or except as otherwise provided in this Section 3.06, any interest
on Bearer Securities shall be payable only upon presentation and surrender of
the Coupons appertaining thereto.
Upon the issuance of any new Debt Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debt Security or Coupon of any series issued pursuant to
this Section shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Debt Security or
Coupon shall be at any time enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Debt Securities or Coupons of that series duly issued hereunder.
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 Debt Securities or Coupons.
Section 3.07. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
(a) Interest on any Registered Security which is payable and is
punctually paid or duly provided for on any Interest Payment Date shall be paid
to the Person in whose name such Registered Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest notwithstanding the cancellation of such Registered Security
upon any registration of transfer or exchange subsequent to the Regular Record
Date. Unless otherwise specified as contemplated by Section 3.01 with respect
to the Debt Securities of any series, payment of interest on Registered
Securities shall be made at the place or places specified pursuant to Section
3.01 or, at the option of the Company, by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register
or, if provided pursuant to Section 3.01, by wire transfer to an account
designated by the Registered Holder.
(b) Interest on any Coupon Security which is payable and is punctually
paid or duly provided for on any Interest Payment Date shall, except as
otherwise provided in Section 12.03, be paid to the Holder of the Coupon which
has matured on such Interest Payment Date upon surrender of such Coupon on such
Interest Payment Date at an office or agency of the Company in a Place of
Payment located outside the United States specified pursuant to Section 3.01.
-33-
<PAGE>
Interest on any Bearer Security (other than a Coupon Security) which
is payable and is punctually paid or duly provided for on any Interest Payment
Date shall be paid to the Holder of the Bearer Security upon presentation of
such Bearer Security and notation thereon on such Interest Payment Date at an
office or agency of the Company in a Place of Payment located outside the United
States specified pursuant to Section 3.01.
Unless otherwise specified pursuant to Section 3.01, at the direction
of the Holder of any Bearer Security or Coupon payable in Dollars, payment on
such Bearer Security or Coupon will be made by check or, if agreeable to the
Trustee and at the expense of the Company, by wire transfer to a Dollar account
maintained by such Holder outside the United States. If such payment at the
offices of all Paying Agents outside the United States becomes illegal or is
effectively precluded because of the imposition of exchange controls or similar
restrictions on the full payment or receipt of such amounts in Dollars, the
Company will appoint an office or agent in the United States at which such
payment may be made. Unless otherwise specified pursuant to Section 3.01, at
the direction of the Holder of any Bearer Security or Coupon payable in a
Foreign Currency, payment on such Bearer Security or Coupon will be made by a
check drawn on a bank outside the United States or by wire transfer to an
appropriate account maintained by such Holder outside the United States. Except
as provided in this paragraph, no payment on any Bearer Security or Coupon will
be made by mail to an address in the United States or by wire transfer to an
account in the United States.
(c) Any interest on any Debt Security which is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest") shall, if such Debt Security is a Registered Security,
forthwith cease to be payable to the Registered Holder on the relevant Regular
Record Date by virtue of his having been such Registered Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names such Registered Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall, at least 25 days
prior to the date of the proposed payment, notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each such
Registered Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money in the
Currency or Currency Unit in which the Debt Securities of such series are
payable (except as otherwise specified pursuant to Section 3.01 or 3.10)
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment. Such money
when deposited is to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which date shall be not more than 20 days and not less
than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall
-34-
<PAGE>
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to the Holders of such Registered
Securities at their addresses as they appear in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to
the Persons in whose names such Registered Securities (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on
Registered Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Registered Securities
may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
(d) Any Defaulted Interest payable in respect of Bearer Securities of
any series 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 (if any) and Bearer Securities of such series,
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 1.05
not more than 20 days and not less than 10 days prior to the date of the
proposed payment.
(e) Subject to the foregoing provisions of this Section, each Debt
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Debt Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debt Security.
Section 3.08. Cancellation.
------------
Unless otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, all Debt Securities surrendered for payment,
redemption, registration of transfer, exchange or credit against any sinking
fund and all Coupons surrendered for payment or exchange shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee. All
Registered Securities and matured Coupons so delivered shall be promptly
canceled by the Trustee. All Bearer Securities and unmatured Coupons so
delivered shall be held by the Trustee and, upon instruction by Company Order,
shall be canceled or held for reissuance. Bearer Securities and unmatured
Coupons held for reissuance may be reissued only in exchange for Bearer
Securities of the same series and of like Stated Maturity and with like terms
and conditions pursuant to Section 3.05 or in replacement of mutilated, lost,
stolen or destroyed Bearer Securities of the same series and of like Stated
Maturity and with like terms and conditions or the related Coupons pursuant to
Section 3.06. All Bearer Securities and unmatured Coupons held by the Trustee
pending such cancellation or reissuance shall be deemed to be delivered for
cancellation for all
-35-
<PAGE>
purposes of this Indenture and the Debt Securities. The Company may at any time
deliver to the Trustee for cancellation any Debt Securities or Coupons
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and the Company may deliver to the Trustee
(or to any other Person for delivery to the Trustee) for cancellation any Debt
Securities previously authenticated hereunder which the Company has not issued,
and all Debt Securities or Coupons so delivered shall be promptly canceled by
the Trustee. No Debt Securities or Coupons shall be authenticated in lieu of or
in exchange for any Debt Securities or Coupons canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled Debt
Securities and Coupons held by the Trustee shall be destroyed by the Trustee in
accordance with its customary procedures and a certificate of destruction shall
be delivered to the Company upon Company Request. The acquisition of any Debt
Securities or Coupons by the Company shall not operate as a redemption or
satisfaction of the indebtedness represented thereby unless and until such Debt
Securities or Coupons are surrendered to the Trustee for cancellation. In the
case of any temporary Global Note which shall be destroyed if the entire
aggregate principal amount of the Debt Securities represented thereby has been
exchanged, the certificate of destruction shall state that all certificates
required pursuant to Section 3.04 hereof and substantially in the form of
Exhibit B hereto, to be given by the Euro-clear Operator or CEDEL, have been
duly presented to the Trustee by the Euro-clear Operator or CEDEL, as the case
may be. Permanent Global Notes shall not be destroyed until exchanged in full
for definitive Debt Securities or until payment thereon is made in full.
Section 3.09. Computation of Interest.
-----------------------
Except as otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, interest on the Debt Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.
Section 3.10. Currency of Payments in Respect of Debt Securities.
--------------------------------------------------
(a) Except as otherwise specified pursuant to Section 3.01 for Bearer
Securities of any series, payment of the principal of (and premium, if any) and
interest on Bearer Securities of such series denominated in any Currency will be
made in such Currency.
(b) With respect to Registered Securities of any series not permitting
the election provided for in paragraph (c) below or the Holders of which have
not made the election provided for in paragraph (c) below, except as provided in
paragraph (e) below, payment of the principal of (and premium, if any) and any
interest on any Registered Security of such series will be made in the Currency
in which such Registered Security is payable.
(c) It may be provided pursuant to Section 3.01 with respect to the
Registered Securities of any series that Holders shall have the option, subject
to paragraphs (e) and (f) below, to receive payments of principal of (and
premium, if any) and any interest on such Registered Securities in any of the
Currencies which may be designated for such election by delivering to the
Trustee a written election, to be in form established pursuant to Section 3.01,
not later than the close of business on the Election Date immediately preceding
the applicable
-36-
<PAGE>
payment date. If a Holder so elects to receive such payments in any such
Currency, such election will remain in effect for such Holder until changed by
such Holder by written notice to the Trustee (but any such change must be made
not later than the close of business on the Election Date immediately preceding
the next payment date to be effective for the payment to be made on such payment
date and no such change or election may be made with respect to payments to be
made on any Registered Security of such series with respect to which an Event of
Default has occurred or notice of redemption has been given by the Company
pursuant to Article Thirteen). Any Holder of any such Registered Security who
shall not have delivered any such election to the Trustee by the close of
business on the applicable Election Date will be paid the amount due on the
applicable payment date in the relevant Currency as provided in paragraph (b) of
this Section 3.10.
(d) If the election referred to in paragraph (c) above has been
provided for pursuant to Section 3.01, then not later than the fourth Business
Day after the Election Date for each payment date, the Trustee will deliver to
the Company a written notice specifying, in the Currency in which each series of
the Registered Securities is payable, the respective aggregate amounts of
principal of (and premium, if any) and any interest on the Registered Securities
to be paid on such payment date, specifying the amounts so payable in respect of
the Registered Securities as to which the Holders of Registered Securities
denominated in any Currency shall have elected to be paid in another Currency as
provided in paragraph (c) above. If the election referred to in paragraph (c)
above has been provided for pursuant to Section 3.01 and if at least one Holder
has made such election, then, on the second Business Day preceding each payment
date, the Company will deliver to the Trustee an Exchange Rate Officer's
Certificate in respect of the Currency payments to be made on such payment date.
The Currency amount receivable by Holders of Registered Securities who have
elected payment in a Currency as provided in paragraph (c) above shall be
determined by the Company on the basis of the applicable Market Exchange Rate in
effect on the third Business Day (the "Valuation Date") immediately preceding
each payment date.
(e) If a Conversion Event occurs with respect to a Foreign Currency,
the ECU or any other Currency Unit in which any of the Debt Securities are
denominated or payable other than pursuant to an election provided for pursuant
to paragraph (c) above, then with respect to each date for the payment of
principal of (and premium, if any) and any interest on the applicable Debt
Securities denominated or payable in such Foreign Currency, the ECU or such
other Currency Unit occurring after the last date on which such Foreign
Currency, the ECU or such other Currency Unit was used (the "Conversion Date"),
the Dollar shall be the Currency of payment for use on each such payment date.
The Dollar amount to be paid by the Company to the Trustee and by the Trustee or
any Paying Agent to the Holders of such Debt Securities with respect to such
payment date shall be the Dollar Equivalent of the Foreign Currency or, in the
case of a Currency Unit, the Dollar Equivalent of the Currency Unit, in each
case as determined by the Currency Determination Agent, if any, or, if there
shall not be a Currency Determination Agent, then by the Trustee, in the manner
provided in paragraph (g) or (h) below.
(f) If the Holder of a Registered Security denominated in any Currency
shall have elected to be paid in another Currency as provided in paragraph (c)
above, and a Conversion
-37-
<PAGE>
Event occurs with respect to such elected Currency, such Holder shall receive
payment in the Currency in which payment would have been made in the absence of
such election. If a Conversion Event occurs with respect to the Currency in
which payment would have been made in the absence of such election, such Holder
shall receive payment in Dollars as provided in paragraph (e) of this Section
3.10.
(g) The "Dollar Equivalent of the Foreign Currency" shall be
determined by the Currency Determination Agent, if any, or, if there shall not
be a Currency Determination Agent, then by the Trustee, and shall be obtained
for each subsequent payment date by converting the specified Foreign Currency
into Dollars at the Market Exchange Rate on the Conversion Date.
(h) The "Dollar Equivalent of the Currency Unit" shall be determined
by the Currency Determination Agent, if any, or, if there shall not be a
Currency Determination Agent, then by the Trustee, and subject to the provisions
of paragraph (i) below, shall be the sum of each amount obtained by converting
the Specified Amount of each Component Currency into Dollars at the Market
Exchange Rate for such Component Currency on the Valuation Date with respect to
each payment.
(i) For purposes of this Section 3.10 the following terms shall have
the following meanings:
A "Component Currency" shall mean any Currency which, on the
Conversion Date, was a component Currency of the relevant Currency Unit,
including, but not limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the number of
units of such Component Currency or fractions thereof which were
represented in the relevant Currency Unit, including, but not limited to,
the ECU, on the Conversion Date. If after the Conversion Date the official
unit of any Component Currency is altered by way of combination or
subdivision, the Specified Amount of such Component Currency shall be
divided or multiplied in the same proportion. If after the Conversion Date
two or more Component Currencies are consolidated into a single Currency,
the respective Specified Amounts of such Component Currencies shall be
replaced by an amount in such single Currency equal to the sum of the
respective Specified Amounts of such consolidated Component Currencies
expressed in such single Currency, and such amount shall thereafter be a
Specified Amount and such single Currency shall thereafter be a Component
Currency. If after the Conversion Date any Component Currency shall be
divided into two or more Currencies, the Specified Amount of such Component
Currency shall be replaced by amounts of such two or more Currencies with
appropriate Dollar equivalents at the Market Exchange Rate on the date of
such replacement equal to the Dollar equivalent of the Specified Amount of
such former Component Currency at the Market Exchange Rate on such date,
and such amounts shall thereafter be Specified Amounts and such Currencies
shall thereafter be Component Currencies. If after the Conversion Date of
the relevant Currency Unit, including but not limited to, the ECU, a
-38-
<PAGE>
Conversion Event (other than any event referred to above in this definition
of "Specified Amount") occurs with respect to any Component Currency of
such Currency Unit, the Specified Amount of such Component Currency shall,
for purposes of calculating the Dollar Equivalent of the Currency Unit, be
converted into Dollars at the Market Exchange Rate in effect on the
Conversion Date of such Component Currency.
"Election Date" shall mean the record date with respect to any payment
date, and with respect to the Maturity shall mean the record date (if
within 16 or fewer days prior to the Maturity) immediately preceding the
Maturity, and with respect to any series of Debt Securities whose record
date immediately preceding the Maturity is more than 16 days prior to the
Maturity or any series of Debt Securities for which no record dates are
provided with respect to interest payments, shall mean the date which is 16
days prior to the Maturity.
(j) All decisions and determinations of the Currency Determination
Agent, if any, or the Trustee regarding the Dollar Equivalent of the Foreign
Currency, the Dollar Equivalent of the Currency Unit and the Market Exchange
Rate shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive for all purposes and irrevocably binding upon the Company
and all Holders of the Debt Securities denominated or payable in the relevant
Currency. In the event of a Conversion Event with respect to a Foreign
Currency, the Company, after learning thereof, will immediately give written
notice thereof to the Trustee (and the Trustee will promptly thereafter give
notice in the manner provided in Section 1.05 to the Holders) specifying the
Conversion Date. In the event of a Conversion Event with respect to the ECU or
any other Currency Unit in which Debt Securities are denominated or payable, the
Company, after learning thereof, will immediately give written notice thereof to
the Trustee (and the Trustee will promptly thereafter give written notice in the
manner provided in Section 1.05 to the Holders) specifying the Conversion Date
and the Specified Amount of each Component Currency on the Conversion Date. In
the event of any subsequent change in any Component Currency as set forth in the
definition of Specified Amount above, the Company, after learning thereof, will
similarly give written notice to the Trustee. The Trustee shall be fully
justified and protected in relying and acting upon information received by it
from the Company and the Currency Determination Agent, if any, and may,
notwithstanding any other provision of this Indenture, conclusively assume that
no Conversion Event or other event of which it is entitled to notice hereunder
has occurred unless it receives written notice thereof as provided herein, and
shall not otherwise have any duty or obligation to determine such information
independently.
(k) For purposes of any provision of this Indenture where the Holders
of Outstanding Debt Securities may perform an Act which requires that a
specified percentage of the Outstanding Debt Securities of all series perform
such Act and for purposes of any decision or determination by the Trustee of
amounts due and unpaid for the principal (and premium, if any) and interest on
the Debt Securities of all series in respect of which moneys are to be disbursed
ratably, the principal of (and premium, if any) and interest on the Outstanding
Debt Securities denominated in a Foreign Currency will be the amount in Dollars
based upon the Market Exchange Rate for Debt Securities of such series, as of
the date for determining whether the Holders entitled to perform such Act have
performed it, or as of the Business Day
-39-
<PAGE>
immediately prior to the date of such decision or determination by the Trustee,
as the case may be.
Section 3.11. Judgments.
---------
If for the purpose of obtaining a judgment in any court with respect
to any obligation of the Company hereunder or under any Debt Security, it shall
become necessary to convert into any other Currency any amount in the Currency
due hereunder or under such Debt Security, then such conversion shall be made at
the Market Exchange Rate as in effect on the date the Company shall make payment
to any Person in satisfaction of such judgment. If pursuant to any such
judgment, conversion shall be made on a date other than the date payment is made
and there shall occur a change between such Market Exchange Rate and the Market
Exchange Rate as in effect on the date of payment, the Company agrees to pay
such additional amounts (if any) as may be necessary to ensure that the amount
paid is equal to the amount in such other Currency which, when converted at the
Market Exchange Rate as in effect on the date of payment or distribution, is the
amount then due hereunder or under such Debt Security. Any amount due from the
Company under this Section 3.11 shall be due as a separate debt and is not to be
affected by or merged into any judgment being obtained for any other sums due
hereunder or in respect of any Debt Security. In no event, however, shall the
Company be required to pay more in the Currency or Currency Unit due hereunder
or under such Debt Security at the Market Exchange Rate as in effect when
payment is made than the amount of Currency stated to be due hereunder or under
such Debt Security so that in any event the Company's obligations hereunder or
under such Debt Security will be effectively maintained as obligations in such
Currency, and the Company shall be entitled to withhold (or be reimbursed for,
as the case may be) any excess of the amount actually realized upon any such
conversion over the amount due and payable on the date of payment or
distribution.
Section 3.12. Exchange Upon Default.
---------------------
If default is made in the payments referred to in Section 12.01, the
Company hereby undertakes that upon presentation and surrender of a permanent
Global Note to the Trustee (or to any other Person or at any other address as
the Company may designate in writing), on any Business Day on or after the
maturity date thereof the Company will issue and the Trustee will authenticate
and deliver to the bearer of such permanent Global Note duly executed and
authenticated definitive Debt Securities with the same issue date and maturity
date as set out in such permanent Global Note.
Section 3.13. CUSIP Numbers.
-------------
The Company in issuing the Debt Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness or accuracy of
such numbers either as printed on the Debt Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
-40-
<PAGE>
identification numbers printed on the Debt Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture, with respect to the Debt Securities of any series (if
all series issued under this Indenture are not to be affected), shall upon
Company Request, cease to be of further effect (except as to any surviving
rights of registration of transfer or exchange or conversion of such Debt
Securities herein expressly provided for or expressly provided in the terms of
the Debt Securities of such series pursuant to Section 3.01, and rights to
receive payments of principal (and premium, if any) and interest on such Debt
Securities) and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Debt Securities and the Coupons, if any, of such series
theretofore authenticated and delivered (other than (i) Debt Securities and
Coupons of such series which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.06, (ii) Coupons
appertaining to Bearer Securities surrendered for exchange for Registered
Securities and maturing after such exchange, whose surrender is not
required or has been waived under Section 3.05, (iii) Coupons appertaining
to Bearer Securities called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in Section
13.06, and (iv) Debt Securities and Coupons of such series for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 12.04) have been
delivered to the Trustee for cancellation; or
(B) all Debt Securities and the Coupons, if any, of such series not
theretofore delivered to the Trustee for cancellation,
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice by the Trustee in the name, and at the expense, of the
Company,
-41-
<PAGE>
and the Company, in the case of (i), (ii) or (iii) of this subclause (B),
has irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount in the Currency in which
such Debt Securities are denominated (except as otherwise provided pursuant
to Section 3.01 or 3.10) sufficient to pay and discharge the entire
indebtedness on such Debt Securities for principal (and premium, if any)
and interest to the date of such deposit (in the case of Debt Securities
which have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be; provided, however, in the event a petition for
-------- -------
relief under the Federal bankruptcy laws, as now or hereafter constituted,
or any other applicable Federal or state bankruptcy, insolvency or other
similar law, is filed with respect to the Company within 91 days after the
deposit and the Trustee is required to return the deposited money to the
Company, the obligations of the Company under this Indenture with respect
to such Debt Securities shall not be deemed terminated or discharged;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
with respect to such series have been complied with; and
(4) the Company has delivered to the Trustee an Opinion of Counsel or
a ruling by the Internal Revenue Service to the effect that such deposit
and discharge will not cause Holders of the Debt Securities of the series
to recognize income, gain or loss for Federal income tax purposes.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations of
the Company to any Authenticating Agent under Section 6.14, the obligations of
the Company under Section 12.01, and, if money shall have been deposited with
the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 4.02 and the last paragraph of Section
12.04, shall survive. If, after the deposit referred to in subclause (B) of
clause 1 of this Section has been made, (x) the Holder of a Debt Security is
entitled to, and does, elect pursuant to Section 3.10(c), to receive payment in
a Currency other than that in which deposit was made, or (y) if a Conversion
Event occurs with respect to the Currency in which deposit was made or elected
to be received by the Holder pursuant to Section 3.10(c), then the indebtedness
represented by such Debt Security shall be fully discharged to the extent that
deposit made with respect to such Debt Security shall be converted into the
Currency in which such payment is made.
Section 4.02. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 12.04, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Debt Securities and
Coupons, if any, and this Indenture, to
-42-
<PAGE>
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for whose
payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.
-----------------
"Event of Default" wherever used herein with respect to Debt
Securities of any series means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law, pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest upon any Debt Security or
any payment with respect to the Coupons, if any, of such series when it
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of (and premium, if any,
on) any Debt Security of such series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Debt Security of such series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or any covenant or warranty which expressly has
been included in this Indenture solely for the benefit of Debt Securities
of a series other than such series), and continuance of such default or
breach for a period of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of such series, a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(5) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or
any other applicable Federal or State bankruptcy, insolvency or other
similar law, or a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under any
-43-
<PAGE>
applicable Federal or State law, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days;
or
(6) the commencement by the Company of a voluntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
the consent by it to the entry of an order for relief in an involuntary
case under any such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of its creditors, or the admission by it
in writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company in furtherance of any such
action; or
(7) any other Event of Default provided with respect to Debt
Securities of that series pursuant to Section 3.01.
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to Debt Securities of any series
at that time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series may declare the principal amount (or,
if any Debt Securities of such series are Discount Securities, such portion of
the principal amount of such Discount Securities as may be specified in the
terms of such Discount Securities) of all the Debt Securities of such series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon, any such declaration such principal
amount (or specified amount) plus accrued and unpaid interest (and premium, if
any), shall become immediately due and payable. Upon payment of such amount in
the Currency in which such Debt Securities are denominated (except as otherwise
provided pursuant to Section 3.01 or 3.10), all obligations of the Company in
respect of the payment of principal of the Debt Securities of such series shall
terminate.
At any time after such a declaration of acceleration with respect to
Debt Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Debt Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum in the
Currency in which such Debt Securities are denominated (except as otherwise
provided pursuant to Section 3.01 or 3.10) sufficient to pay
-44-
<PAGE>
(A) all overdue installments of interest on all Debt Securities
or all overdue payments with respect to any Coupons of such
series,
(B) the principal of (and premium, if any, on) any Debt
Securities of such series which have become due otherwise
than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such
Debt Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest on each Debt
Security of such series or upon overdue payments on any
Coupons of such series at the Overdue Rate, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 6.07; provided,
--------
however, that all sums payable under this clause (D) shall
-------
be paid in Dollars;
and
(2) All Events of Default with respect to Debt Securities of such
series, other than the nonpayment of the principal of Debt Securities of
such series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission and annulment shall affect any subsequent default or impair
any right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
--------------------------------------------------------
Trustee.
- -------
The Company covenants that if:
(1) default is made in the payment of any installment of interest on
any Debt Security or any payment with respect to any Coupons when such
interest or payment becomes due and payable and such default continues for
a period of 30 days,
(2) default is made in the payment of principal of (or premium, if
any, on) any Debt Security at the Maturity thereof, or
(3) default is made in the making or satisfaction of any sinking fund
payment or analogous obligation when the same becomes due pursuant to the
terms of the Debt Securities of any series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities or of such Coupons, (i) the amount then due and
payable on such Debt Securities
-45-
<PAGE>
or matured Coupons for the principal (and premium, if any) and interest, if any,
(ii) to the extent that payment of such interest shall be legally enforceable,
interest upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at the Overdue Rate, and (iii) such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
6.07.
If the Company fails to pay such amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Debt Securities and Coupons,
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such Debt
Securities and Coupons wherever situated.
If an Event of Default with respect to Debt Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Debt Securities and
Coupons of such series by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
Section 5.04. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings, or any voluntary or involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, relative to the Company or any
other obligor upon the Debt Securities and Coupons, if any, of a particular
series or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of such Debt
Securities shall then be due and payable as therein expressed or by declaration
of acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (or,
if the Debt Securities of such series are Discount Securities, such portion
of the principal amount as may be due and payable with respect to such
series pursuant to a declaration in accordance with Section 5.02) (and
premium, if any) and interest owing and unpaid in respect of the Debt
Securities and Coupons of such series and to file such other papers or
documents and take such other actions, including participating as a member,
voting or otherwise, of any committee of creditors appointed in the matter,
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
-46-
<PAGE>
agents and counsel, and any other amounts due the Trustee under Section
6.07) and of the Holders of such Debt Securities and Coupons allowed in
such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07.
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 Debt
Securities and any Coupons of such series or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of Debt
-----------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Debt
Securities and the Coupons, if any, of any series may be prosecuted and enforced
by the Trustee without the possession of any of such Debt Securities or Coupons
or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name, as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.07, be for the ratable benefit of the Holders of the
Debt Securities or Coupons in respect of which such judgment has been recovered.
Section 5.06. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (and premium,
if any) or interest, upon presentation of the Debt Securities or Coupons of any
series in respect of which money has been collected and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.07.
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debt Securities or
Coupons of such series, in respect of which or for the benefit of which such
money has been collected ratably, without preference or
-47-
<PAGE>
priority of any kind, according to the amounts due and payable on such Debt
Securities or Coupons for principal (and premium, if any) and interest,
respectively; and
THIRD: The balance, if any, to the Company or any other Person or
Persons entitled thereto.
Section 5.07. Limitation on Suits.
-------------------
No Holder of any Debt Security or Coupon of any series shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to such series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Debt Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or of the Holders of Outstanding Debt Securities or Coupons of any other
series, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders. For the protection and enforcement of the provisions of this Section
5.07, each and every Holder of Debt Securities or Coupons of any series and the
Trustee for such series shall be entitled to such relief as can be given at law
or in equity.
Section 5.08. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Debt Security or of any Coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 3.07) interest on such Debt Security or Coupon on the
respective Stated Maturity or Maturities expressed in such Debt
-48-
<PAGE>
Security or Coupon (or, in the case of redemption, on the Redemption Date) and
to institute suit for the enforcement of any such payment and interest thereon,
and such right shall not be impaired without the consent of such Holder.
Section 5.09. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
------------------------------
Except as otherwise expressly provided elsewhere in this Indenture, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
-----------------------------
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Indenture or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 5.12. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of such series, provided, that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) subject to the provisions of Section 6.01, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Responsible Officers of the
Trustee, determine that the proceeding so directed
-49-
<PAGE>
would involve the Trustee in personal liability or be unjustly prejudicial
to the Holders of Debt Securities of such series not joining in any such
direction;
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(4) this provision shall not affect the rights of the Trustee set
forth in Section 6.01(c)(4).
Section 5.13. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
the Debt Securities of any such series waive, by notice to the Trustee and the
Company, any past default or Event of Default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series, or in the payment of any
sinking fund installment or analogous obligation with respect to the Debt
Securities of such series, or
(2) in respect of a covenant or provision hereof which pursuant to
Article Eleven cannot be modified or amended without the consent of the
Holder of each Outstanding Debt Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of the Debt Securities of such series under this Indenture, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Debt
Security or any Coupon by his acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit other than the Trustee 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 shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder or group of
Holders holding in the aggregate more than 10% in principal amount of the
Outstanding Debt Securities of any series, or to any suit instituted by any
Holder of a Debt Security or Coupon for the enforcement of the payment of the
principal of (or premium, if any) or interest on such Debt Security or the
payment of any Coupon on or after the respective Stated Maturity or Maturities
expressed in such Debt Security or Coupon (or, in the case of redemption, on or
after the Redemption Date).
-50-
<PAGE>
Section 5.15. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default with respect
to the Debt Securities of any series,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Debt Securities of any
series has occurred and is continuing, the Trustee shall, with respect to the
Debt Securities of such series, exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) Subject to Section 6.04, no provision of this Indenture shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
-51-
<PAGE>
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it with respect to Debt Securities of
any series in good faith in accordance with the direction of the Holders of
a majority in principal amount of the Outstanding Debt Securities of such
series relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture;
(4) the Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it; and
(5) the Trustee shall not be charged with knowledge of any default or
Event of Default or any other act or circumstance upon the occurrence of
which the Trustee may be required to take action unless a Responsible
Officer of the Trustee obtains actual knowledge of such default, Event of
Default, act or circumstance or unless written notice referencing this
Indenture or the Debt Securities is received by the Trustee at the
Corporate Trust Office.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 6.02. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder with
respect to Debt Securities or Coupons, if any, of any series, the Trustee shall
give notice to all Holders of Debt Securities and Coupons of such series of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
-------- -------
payment of the principal of (or premium, if any) or interest on any Debt
Security or Coupon of such series or in the payment of any sinking fund
installment with respect to Debt Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Debt Securities and of Coupons of
such series; and provided, further, that in the case of any default of the
-------- -------
character specified in Section 5.01(4) with respect to Debt Securities of such
series no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Debt Securities of such series.
-52-
<PAGE>
Notice given pursuant to this Section 6.02 with respect to Registered
Securities shall be transmitted by mail:
(1) to all Registered Holders, as the names and addresses of the
Registered Holders appear in the Security Register;
(2) to such Holders of Bearer Securities of any series as have within
two years preceding such transmission, filed their names and addresses with
the Trustee for such series for that purpose; and
(3) to each Holder of a Debt Security of any series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 7.02(a) of this Indenture; and
(4) to the Company.
Notice given pursuant to this Section 6.02 with respect to Bearer
Securities shall be transmitted in the manner set forth in Section 1.05.
Section 6.03. Certain Rights of Trustee.
-------------------------
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Debt Securities of any series pursuant to this Indenture,
unless such Holders shall have offered to the
-53-
<PAGE>
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent (including any agent appointed pursuant to
Section 3.10(j)) or attorney appointed with due care by it hereunder.
Section 6.04. Not Responsible for Recitals or Issuance of Debt
------------------------------------------------
Securities.
- ----------
The recitals contained herein and in the Debt Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debt Securities or Coupons, if any, of any series. The
Trustee shall not be accountable for the use or application by the Company of
any Debt Securities or the proceeds thereof. The Trustee assumes no
responsibility for the accuracy of any statements in any registration statement
relating to the Debt Securities.
Section 6.05. May Hold Debt Securities.
------------------------
The Trustee, any Paying Agent, the Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Debt Securities or Coupons, and, subject to Sections 6.08
and 6.13, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Paying Agent, Security Registrar or such other agent.
Section 6.06. Money Held in Trust.
-------------------
Subject to the provisions of Sections 12.04 and 15.04, money in any
Currency held by the Trustee or any Paying Agent in trust hereunder need not be
segregated from other funds except to the extent required by law. Neither the
Trustee nor any Paying Agent shall be under any liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.
-54-
<PAGE>
Section 6.07. Compensation and Reimbursement.
------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation in
Dollars for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee in Dollars upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in connection
with the administration of the trusts herein set forth (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify in Dollars the Trustee for, and to hold it harmless
against, any loss, liability, damage, claims or expense, including taxes
(other than taxes based upon, measured by or determined by income of the
Trustee), incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this trust or
performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section and in addition to its rights under Section 5.06, the Trustee
shall have a claim prior to the Debt Securities and Coupons, if any, upon all
property and funds held or collected by the Trustee as such, except funds held
in trust pursuant to Section 15.03 hereof or for the payment of amounts due on
particular Debt Securities and Coupons. The fees and expenses incurred by the
Trustee in connection with any bankruptcy of the Company shall constitute fees
and expenses of administration; provided, however, that this shall not affect
-------- -------
the Trustee's rights as set forth in the preceding sentence or Section 5.06.
The provisions of Section 6.07(3) shall survive the resignation or removal of
the Trustee and the satisfaction and discharge of this Indenture.
Section 6.08. Disqualification; Conflicting Interests.
---------------------------------------
The Trustee shall at all times satisfy the requirements of Sections
310(a)(1), (2) and (5) of the Trust Indenture Act. If the Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the extent and in
the manner provided by, and subject to the provisions of, the Trust Indenture
Act and this Indenture. The Trustee shall be subject to the provisions of
Section 310(b) of the Trust Indenture Act.
-55-
<PAGE>
Section 6.09. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by Federal, State
or District of Columbia authority and eligible to act as Trustee hereunder in
compliance with Section 310(a)(1) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Company nor
any person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as Trustee upon any Debt Securities.
Section 6.10. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Debt
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Debt
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Debt
Securities of any series, and a successor Trustee appointed, by Act of the
Holders of a majority in principal amount of the Outstanding Debt Securities of
such series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08 with respect to
the Debt Securities of any series after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Debt Security
of such series for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 with
respect to the Debt Securities of any series and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or
-56-
<PAGE>
any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Debt Securities, or (ii) subject to Section 5.14,
any Holder who has been a bona fide Holder of a Debt Security of any series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee for the Debt Securities of such series.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Debt Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Debt Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debt Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Debt Securities of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Debt Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to the
Debt Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Debt Securities of any series shall have been so appointed by the Company or the
Holders of such series and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Debt Security of such
series for at least six months may, subject to Section 5.14, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Debt
Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debt Securities of any series and each
appointment of a successor Trustee with respect to the Debt Securities of any
series in the manner and to the extent provided in Section 1.05 to the Holders
of Debt Securities of such series. Each notice shall include the name of the
successor Trustee with respect to the Debt Securities of such series and the
address of its corporate trust office.
Section 6.11. Acceptance of Appointment by Successor.
--------------------------------------
(a) In the case of an appointment hereunder of a successor Trustee
with respect to all Debt Securities, each such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee, but, on the
written
-57-
<PAGE>
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 6.07.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Debt
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Debt Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debt Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in any such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any other trust or trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of any such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Debt Securities of that
or those series to which the appointment of such successor Trustee relates, but,
on request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Debt
Securities of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 6.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or
-58-
<PAGE>
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Debt Securities shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the
Debt Securities so authenticated with the same effect as if such successor
Trustee had itself authenticated such Debt Securities. In case any Debt
Securities shall not have been authenticated by such predecessor Trustee, any
such successor Trustee may authenticate and deliver such Debt Securities, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
Section 6.13. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act.
Section 6.14. Appointment of Authenticating Agent.
-----------------------------------
As long as any Debt Securities of a series remain Outstanding, upon a
Company Request, there shall be an authenticating agent (the "Authenticating
Agent") appointed, for such period as the Company shall elect, by the Trustee
for such series of Debt Securities to act as its agent on its behalf and subject
to its direction in connection with the authentication and delivery of each
series of Debt Securities for which it is serving as Trustee. Debt Securities
of each such series authenticated by such Authenticating Agent shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by such Trustee. Wherever reference is made in
this Indenture to the authentication and delivery of Debt Securities of any
series by the Trustee for such series or to the Trustee's Certificate of
Authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee for such series by an Authenticating Agent for
such series and a Certificate of Authentication executed on behalf of such
Trustee by such Authenticating Agent. Such Authenticating Agent shall at all
times be a corporation organized and doing business under the laws of the United
States of America or of any State, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for purposes of this Section, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
If at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.
-59-
<PAGE>
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Debt Securities for which it served as Authenticating
Agent without the execution or filing of any paper or any further act on the
part of the Trustee for such series or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the applicable Trustee
and to the Company.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect to
one or more or all series of Debt Securities, the Trustee for such series shall
upon Company Request appoint a successor Authenticating Agent, and the Company
shall provide notice of such appointment to all Holders of Debt Securities of
such series in the manner and to the extent provided in Section 1.05. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein. The Company agrees to pay to the Authenticating Agent for any
series of Debt Securities from time to time reasonable compensation for its
services under this Section 6.14. The Authenticating Agent for the Debt
Securities of any series shall have no responsibility or liability for any
action taken by it as such in good faith and without negligence at the direction
of the Trustee for such series, and the Trustee shall not be liable or
responsible for the acts or omissions of any Authenticating Agent appointed upon
a Company Request.
If an appointment with respect to one or more series is made pursuant
to this Section, the Debt Securities of such series may have endorsed thereon,
in addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
-60-
<PAGE>
This is one of the Debt Securities of the series designated therein
referred to in the within mentioned Indenture.
THE CHASE MANHATTAN BANK
As Trustee
By ________________________
As Authenticating Agent
By:________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders.
- -------
The Company will furnish or cause to be furnished to the Trustee with
respect to Registered Securities of each series for which it acts as Trustee:
(a) semi-annually on a date not more than 15 days after each Regular
Record Date with respect to an Interest Payment Date, if any, for the Registered
Securities of such series (or on semi-annual dates in each year to be determined
pursuant to Section 3.01 if the Registered Securities of such series do not bear
interest), a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Registered Holders as of the date 15 days next
preceding each such Regular Record Date (or such semi-annual dates, as the case
may be); and
(b) at such other times as the Trustee may request in writing, within
15 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
provided, however, that if and so long as the Trustee shall be the Security
- -------- -------
Registrar for such series, no such list need be furnished.
The Company shall also be required to furnish to the Trustee at all
such times set forth above all information in the possession or control of the
Company or any of its Paying Agents other than the Trustee as to the names and
addresses of the Holders of Bearer Securities of all series; provided, however,
-------- -------
that the Company shall have no obligation to investigate any matter relating to
any Holders of Bearer Securities of any series.
-61-
<PAGE>
Section 7.02. Preservation of Information; Communication to Holders.
-----------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in Section 7.01
received by it in the capacity of Paying Agent (if so acting) hereunder, and
filed with it within the two preceding years pursuant to Section 7.03.
The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished, destroy any information
received by it as Paying Agent (if so acting) hereunder upon delivering to
itself as Trustee, not earlier than 45 days after an Interest Payment Date, a
list containing the names and addresses of the Holders obtained from such
information since the delivery of the next previous list, if any, destroy any
list delivered to itself as Trustee which was compiled from information received
by it as Paying Agent (if so acting) hereunder upon the receipt of a new list so
delivered, and destroy not earlier than two years after filing, any information
filed with it pursuant to Section 7.03.
(b) If three or more Holders (hereinafter referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable proof
that each such applicant has owned a Debt Security for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders of Debt Securities of a
particular series (in which case the applicants must hold Debt Securities of
such series) or with all Holders of Debt Securities with respect to their rights
under this Indenture or under the Debt Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 7.02(a), or
(ii) inform such applicants as to the approximate number of Holders of
Debt Securities of such series or of all Debt Securities, as the case may
be, whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with Section 7.02(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon written request of such applicants,
mail to the Holders of Debt Securities of such series or all Holders, as the
case may be, whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 7.02(a), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such
-62-
<PAGE>
mailing would be contrary to the best interests of the Holders of Debt
Securities of such series or all Holders, as the case may be, or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Debt Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with
Section 7.02(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
of any material pursuant to a request made under Section 7.02(b).
Section 7.03. Reports by Trustee.
------------------
Within 60 days after May 15 of each year, beginning with May 15 of the
first year in which Debt Securities are outstanding hereunder, the Trustee
shall, if required by law, mail to each Holder a brief report dated as of such
date that complies with Section 313(a) of the Trust Indenture Act. The Trustee
also shall comply with Sections 313(b) and 313(c) of the Trust Indenture Act.
The Company shall promptly notify the Trustee in writing if the Debt
Securities of any series become listed on any stock exchange or automated
quotation system.
A copy of each report shall, at the time of its mailing to the
Holders, be mailed to the Company and filed with the Commission and each stock
exchange, if any, on which the Debt Securities of any series are listed.
Section 7.04. Reports by Company.
------------------
The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act or, if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it will file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to
-63-
<PAGE>
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be required from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit to all Holders of Debt Securities, in the manner and to
the extent provided in Section 7.03, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
ARTICLE EIGHT
CONCERNING THE HOLDERS
Section 8.01. Acts of Holders.
---------------
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent or proxy duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee, and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Whenever in this Indenture it is provided that
the Holders of a specified percentage in aggregate principal amount of the
Outstanding Debt Securities of any series may take any Act, the fact that the
Holders of such specified percentage have joined therein may be evidenced (a) by
the instrument or instruments executed by Holders in person or by agent or proxy
appointed in writing, or (b) by the record of Holders voting in favor thereof at
any meeting of such Holders duly called and held in accordance with the
provisions of Article Nine, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Holders.
Section 8.02. Proof of Ownership; Proof of Execution of Instruments
-----------------------------------------------------
by Holder.
- ---------
The ownership of Registered Securities of any series shall be proved
by the Security Register for such series or by a certificate of the Security
Registrar for such series.
-64-
<PAGE>
The ownership of Bearer Securities shall be proved by production of
such Bearer Securities or by a certificate executed by any bank or trust
company, which certificate shall be dated and shall state that on the date
thereof a Bearer Security bearing a specified identifying number or other mark
was deposited with or exhibited to the person executing such certificate by the
person named in such certificate, or by any other proof of possession reasonably
satisfactory to the Trustee. The holding by the person named in any such
certificate of any Bearer Security specified therein shall be presumed to
continue for a period of one year unless at the time of determination of such
holding (1) another certificate bearing a later date issued in respect of the
same Bearer Security shall be produced, (2) such Bearer Security shall be
produced by some other person, (3) such Bearer Security shall have been
registered on the Security Register, if, pursuant to Section 3.01, such Bearer
Security can be so registered, or (4) such Bearer Security shall have been
canceled or paid.
Subject to the provisions of Sections 6.01, 6.03 and 9.05, proof of
the execution of a writing appointing an agent or proxy and of the execution of
any instrument by a Holder or his agent or proxy shall be sufficient and
conclusive in favor of the Trustee and the Company if made in the following
manner:
The fact and date of the execution by any such person of any
instrument may be proved by the certificate of any notary public, or other
officer authorized to take acknowledgments of deeds, that the person executing
such instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution sworn to before any such notary or other such
officer. Where such execution is by an officer of a corporation or association
or a member of a partnership on behalf of such corporation, association or
partnership, as the case may be, or by any other person acting in a
representative capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
The record of any Holders' meeting shall be proved in the manner
provided in Section 9.06.
The Trustee may in any instance require further proof with respect to
any of the matters referred to in this Section so long as the request is a
reasonable one.
Section 8.03. Persons Deemed Owners.
---------------------
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of the
principal of (and premium, if any) and (subject to Section 3.07) interest, if
any, on such Registered Security and for all other purposes whatsoever, whether
or not such Registered Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary. The Company, the Trustee, and any agent of the Company or the Trustee
may treat the Holder of any Bearer Security or of any Coupon as the absolute
owner of such Bearer Security or Coupon for the purposes of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Bearer Security or Coupon be overdue, and neither the
-65-
<PAGE>
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. All payments made to any Holder, or upon his
order, shall be valid, and, to the extent of the sum or sums paid, effectual to
satisfy and discharge the liability for moneys payable upon such Debt Security
or Coupon.
Section 8.04. Revocation of Consents; Future Holders Bound.
--------------------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any Act by the Holders of the
percentage in aggregate principal amount of the Outstanding Debt Securities
specified in this Indenture in connection with such Act, any Holder of a Debt
Security the number, letter or other distinguishing symbol of which is shown by
the evidence to be included in the Debt Securities the Holders of which have
consented to such Act may, by filing written notice with the Trustee at the
Corporate Trust Office and upon proof of ownership as provided in Section 8.02,
revoke such Act so far as it concerns such Debt Security. Except as aforesaid,
any such Act taken by the Holder of any Debt Security shall be conclusive and
binding upon such Holder and, subject to the provisions of Section 5.08, upon
all future Holders of such Debt Security and all past, present and future
Holders of Coupons, if any, appertaining thereto and of any Debt Securities and
Coupons issued on transfer or in lieu thereof or in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Debt Security or Coupons or such other Debt Securities or Coupons.
ARTICLE NINE
HOLDERS' MEETINGS
Section 9.01. Purposes of Meetings.
--------------------
A meeting of Holders of any or all series may be called at any time
and from time to time pursuant to the provisions of this Article Nine for any of
the following purposes:
(1) to give any notice to the Company or to the Trustee for such
series, or to give any directions to the Trustee for such series, or to
consent to the waiving of any default hereunder and its consequences, or to
take any other action authorized to be taken by Holders pursuant to any of
the provisions of Article Five;
(2) to remove the Trustee for such series and appoint a successor
Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the Outstanding
Debt Securities
-66-
<PAGE>
of any one or more or all series, as the case may be, under any other
provision of this Indenture or under applicable law.
Section 9.02. Call of Meetings by Trustee.
---------------------------
The Trustee for any series may at any time call a meeting of Holders
of such series to take any action specified in Section 9.01, to be held at such
time or times and at such place or places as the Trustee for such series shall
determine. Notice of every meeting of the Holders of any series, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given to Holders of such series in the
manner and to the extent provided in Section 1.05. Such notice shall be given
not less than 20 days nor more than 90 days prior to the date fixed for the
meeting.
Section 9.03. Call of Meetings by Company or Holders.
--------------------------------------
In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in aggregate principal amount of the Outstanding
Debt Securities of a series or of all series, as the case may be, shall have
requested the Trustee for such series to call a meeting of Holders of any or all
such series by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have given the
notice of such meeting within 20 days after the receipt of such request, then
the Company or such Holders may determine the time or times and the place or
places for such meetings and may call such meetings to take any action
authorized in Section 9.01, by giving notice thereof as provided in Section
9.02.
Section 9.04. Qualifications for Voting.
-------------------------
To be entitled to vote at any meeting of Holders a Person shall be (a)
a Holder of a Debt Security of the series with respect to which such meeting is
being held or (b) a Person appointed by an instrument in writing as agent or
proxy by such Holder. The only Persons who shall be entitled to be present or
to speak at any meeting of Holders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee for the series
with respect to which such meeting is being held and its counsel and any
representatives of the Company and its counsel.
Section 9.05. Regulations.
-----------
Notwithstanding any other provisions of this Indenture, the Trustee
for any series may make such reasonable regulations as it may deem advisable for
any meeting of Holders of such series, in regard to proof of the holding of Debt
Securities of such series and of the appointment of proxies, and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of such
-67-
<PAGE>
series as provided in Section 9.03, in which case the Company or the Holders
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by a majority vote of the meeting.
Subject to the provisos in the definition of "Outstanding," at any
meeting each Holder of a Debt Security of the series with respect to which such
meeting is being held or proxy therefor shall be entitled to one vote for each
$1,000 principal amount (or such other amount as shall be specified as
contemplated by Section 3.01) of Debt Securities of such series held or
represented by him; provided, however, that no vote shall be cast or counted at
-------- -------
any meeting in respect of any Debt Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote other than by virtue of Outstanding Debt
Securities of such series held by him or instruments in writing duly designating
him as the person to vote on behalf of Holders of Debt Securities of such
series. Any meeting of Holders with respect to which a meeting was duly called
pursuant to the provisions of Section 9.02 or 9.03 may be adjourned from time to
time by a majority of such Holders present and the meeting may be held as so
adjourned without further notice.
Section 9.06. Voting.
------
The vote upon any resolution submitted to any meeting of Holders with
respect to which such meeting is being held shall be by written ballots on which
shall be subscribed the signatures of such Holders or of their representatives
by proxy and the serial number or numbers of the Debt 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 in duplicate of the proceedings of each meeting of Holders shall be taken
and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was transmitted as provided in Section
9.02. The record shall show the serial numbers of the Debt Securities voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
-68-
<PAGE>
Section 9.07. No Delay of Rights by Meeting.
-----------------------------
Nothing contained in this Article Nine shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to any Holder under any of the provisions of this Indenture or of the
Debt Securities of any series.
ARTICLE TEN
INTENTIONALLY OMITTED
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without prior notice to or the consent of any Holders, the Company,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Corporation to the rights of
the Company and the assumption by such successor of the covenants and other
obligations of the Company herein and in the Debt Securities and Coupons,
if any, contained; or
(2) to add to the covenants of the Company, for the benefit of the
Holders of all or any series of Debt Securities and the Coupons, if any,
appertaining thereto (and if such covenants are to be for the benefit of
less than all series, stating that such covenants are expressly being
included solely for the benefit of such series), or to surrender any right
or power herein conferred upon the Company; or
(3) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all series, stating that such
Events of Default are expressly being included solely to be applicable to
such series); or
(4) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Debt
Securities of any series in bearer form, registrable or not registrable,
and with or without Coupons, to permit Bearer Securities to be issued in
exchange for Registered Securities, to permit Bearer Securities to be
issued in exchange for Bearer Securities of other authorized denominations
or to permit the issuance of Debt Securities of any series in
uncertificated form, provided that
--------
-69-
<PAGE>
any such action shall not adversely affect the interests of the Holders of
Debt Securities of any series or any related Coupons in any material
respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
--------
when there is no Outstanding Debt Security or Coupon of any series created
prior to the execution of such supplemental indenture which is entitled to
the benefit of such provision and as to which such supplemental indenture
would apply; or
(6) to secure the Debt Securities; or
(7) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Article Four or Fifteen,
provided that any such action shall not adversely affect the interests of
--------
the Holders of Debt Securities of such series or any other series of Debt
Securities or any related Coupons in any material respect; or
(8) to establish the form or terms of Debt Securities and Coupons, if
any, of any series as permitted by Sections 2.01 and 3.01; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to one or more series of Debt
Securities and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.11; or
(10) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, to eliminate any conflict between the terms of this Indenture or
the Debt Securities and the Trust Indenture Act or to make any other
provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with any provision of this
Indenture; provided such other provisions shall not adversely affect the
--------
interests of the Holders of Outstanding Debt Securities or Coupons, if any,
of any series created prior to the execution of such supplemental indenture
in any material respect.
Section 11.02. Supplemental Indentures With Consent of Holders.
-----------------------------------------------
With the written consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such supplemental indenture voting separately, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture of such
Debt Securities or Coupons, if
-70-
<PAGE>
any; provided, however, that no such supplemental indenture shall, without the
-------- -------
consent of the Holder of each Outstanding Debt Security of each such series
affected thereby,
(1) change the Stated Maturity of the principal of, or installment of
interest, if any, on, any Debt Security, or reduce the principal amount
thereof or the interest thereon or any premium payable upon redemption
thereof, or change the Stated Maturity of or reduce the amount of any
payment to be made with respect to any Coupon, or change the Currency or
Currencies in which the principal of (and premium, if any) or interest on
such Debt Security is denominated or payable, or reduce the amount of the
principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
5.02, or adversely affect the right of repayment or repurchase, if any, at
the option of the Holder, or reduce the amount of, or postpone the date
fixed for, any payment under any sinking fund or analogous provisions for
any Debt Security, or impair the right to institute suit for the
enforcement of any payment on or after the Stated Maturity thereof (or, in
the case of redemption, on or after the Redemption Date), or limit the
obligation of the Company to maintain a paying agency outside the United
States for payment on Bearer Securities as provided in Section 12.03; or
(2) reduce the percentage in principal amount of the Outstanding Debt
Securities of any series, the consent of whose Holders is required for any
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults or Events of Default hereunder and their consequences provided for
in this Indenture; or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 12.09, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Debt Security of each
series affected thereby; provided, however, that this clause shall not be
-------- -------
deemed to require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 12.09, or the deletion of this proviso, in accordance with the
requirements of Sections 6.11 and 11.01(7); or
(4) modify any of the provisions of this Indenture relating to the
subordination of the Debt Securities in a manner adverse to the Holders.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture with respect to one or more particular series
of Debt Securities and Coupons, if any, or which modifies the rights of the
Holders of Debt Securities and Coupons of such series with respect to such
covenant or other provision, shall be deemed not to affect the
-71-
<PAGE>
rights under this Indenture of the Holders of Debt Securities and Coupons, if
any, of any other series.
Section 11.03. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, in
addition to the documents required by Section 1.02, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which adversely affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise in a material
way.
Section 11.04. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debt Securities and Coupons theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 11.05. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 11.06. Reference in Debt Securities to Supplemental
--------------------------------------------
Indentures.
- ----------
Debt Securities and Coupons, if any, of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Debt Securities and Coupons
of any series so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Debt Securities and Coupons of such series.
Section 11.07. Notice of Supplemental Indenture.
--------------------------------
Promptly after the execution by the Company and the appropriate
Trustee of any supplemental indenture pursuant to Section 11.02, the Company
shall transmit, in the manner and to the extent provided in Section 1.05, to all
Holders of any series of the Debt Securities affected thereby, a notice setting
forth in general terms the substance of such supplemental indenture.
-72-
<PAGE>
ARTICLE TWELVE
COVENANTS
Section 12.01. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of each series of
Debt Securities and Coupons, if any, that it will duly and punctually pay the
principal of (and premium, if any) and interest on the Debt Securities in
accordance with the terms of the Debt Securities, the Coupons and this
Indenture. Unless otherwise specified as contemplated by Section 3.01 with
respect to any series of Debt Securities or except as otherwise provided in
Section 3.06, any interest due on Bearer Securities on or before Maturity shall
be payable only upon presentation and surrender of the several Coupons for such
interest installments as are evidenced thereby as they severally mature. If so
provided in the terms of any series of Debt Securities established as provided
in Section 3.01, the interest, if any, due in respect of any temporary Global
Note or permanent Global Note, together with any additional amounts payable in
respect thereof, as provided in the terms and conditions of such Debt Security,
shall be payable only upon presentation of such Debt Security to the Trustee for
notation thereon of the payment of such interest.
Section 12.02. Officer's Certificate as to Default.
-----------------------------------
The Company will deliver to the Trustee, on or before a date not more
than 120 days after the end of each fiscal year of the Company (which on the
date hereof is the calendar year) ending after the date hereof, a certificate of
the principal executive officer, principal financial officer or principal
accounting officer of the Company stating whether or not to the best knowledge
of the signer thereof the Company is in compliance with all covenants and
conditions under this Indenture, and, if the Company shall be in default,
specifying all such defaults and the nature thereof of which such signer may
have knowledge. For purposes of this Section, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
Section 12.03. Maintenance of Office or Agency.
-------------------------------
If Debt Securities of a series are issuable only as Registered
Securities, the Company will maintain or cause to be maintained in each Place of
Payment for such series an office or agency where Debt Securities of that series
may be presented or surrendered for payment, where Debt Securities of that
series may be surrendered for registration of transfer or exchange or
redemption, where Debt Securities of that series that are convertible may be
surrendered for conversion, if applicable, and where notices and demands to or
upon the Company in respect of the Debt Securities of that series and this
Indenture may be served. If Debt Securities of a series are issuable as Bearer
Securities, the Company will maintain (A) in the Borough of Manhattan, The City
and State of New York, an office or agency where any Registered Securities of
that series may be presented or surrendered for payment, where any Registered
Securities of that series, if any, may be surrendered for registration of
transfer, where
-73-
<PAGE>
Debt Securities of that series may be surrendered for exchange or redemption,
where Debt Securities of that series that are convertible may be surrendered for
conversion, where notices and demands to or upon the Company in respect of the
Debt Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related Coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise), (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Debt Securities of that series and related Coupons may be
presented and surrendered for payment (including payment of any additional
amounts payable on Bearer Securities of that series, if so provided pursuant to
Section 3.01); provided, however, that if the Debt Securities of that series
-------- -------
are listed on The Stock Exchange of the United Kingdom and the Republic of
Ireland, the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the Company
will maintain a Paying Agent for the Debt Securities of that series in London,
Luxembourg or any other required city located outside the United States, as the
case may be, so long as the Debt Securities of that series are listed on such
exchange, and (C) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series located outside the United States an office or
agency where any Registered Securities of that series may be surrendered for
registration of transfer, where Debt Securities of that series may be
surrendered for exchange and redemption and where notices and demands to or upon
the Company in respect of the Debt Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
locations, and any change in the locations, of such offices or agencies. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related Coupons may be presented and surrendered for payment at
the offices specified in the applicable Debt Security, and the Company hereby
appoints the Trustee, or in the case of Bearer Securities, such other agent as
is specified pursuant to Section 3.01, as its agent to receive all
presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that, if
-------- -------
the Debt Securities of a series are denominated and payable in Dollars, payment
of principal of and any premium and interest on any Bearer Security (including
any additional amounts payable on Securities of such series, if so provided
pursuant to Section 3.01) shall be made at the office of the Trustee or the
Company's Paying Agent in the Borough of Manhattan, The City and State of New
York, if (but only if) payment in Dollars of the full amount of such principal,
premium, interest or additional amounts, as the case may be, at all offices or
agencies outside the United States maintained for the purpose by the Company in
accordance with this Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions.
-74-
<PAGE>
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or outside
of such Place of Payment), and may from time to time rescind any such
designations; provided, however, that no such designation or rescission shall in
-------- -------
any manner relieve the Company of its obligations described in the preceding
paragraph. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
Section 12.04. Money for Debt Securities; Payments to Be Held in
-------------------------------------------------
Trust.
- -----
If the Company shall at any time act as its own Paying Agent with
respect to any series of Debt Securities and Coupons, if any, it will, on or
before each due date of the principal of (and premium, if any) or interest on
any of the Debt Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be paid
to such Persons or otherwise disposed of as herein provided, and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect
to any series of Debt Securities and Coupons, it will, by or on each due date of
the principal (and premium, if any) or interest on any Debt Securities of such
series, deposit with any such Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled thereto, and (unless any such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent with respect to any series of
Debt Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Debt Securities of such series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Debt Securities of such series) in the making of any
payment of principal (and premium, if any) or interest on the Debt
Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
-75-
<PAGE>
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Subject to any applicable abandoned property law, any money deposited
with the Trustee or any Paying Agent, or then held by the Company, in trust for
the payment of the principal of (and premium, if any) or interest on any Debt
Security of any series and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company upon Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Debt Security or Coupon
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
-------- -------
Paying Agent, before being required to make any such repayment, may, in its sole
discretion, at the expense of the Company cause to be transmitted in the manner
and to the extent provided by Section 1.05, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 12.05. Corporate Existence.
-------------------
The Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights
(charter and statutory) and franchises; provided, however, that the Company
-------- -------
shall not be required to preserve any such right or franchise if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company.
Section 12.06. Purchase of Debt Securities by Company.
--------------------------------------
If the Debt Securities of a series are listed on The Stock Exchange of
the United Kingdom and the Republic of Ireland and such stock exchange shall so
require, the Company will not purchase any Debt Securities of that series by
private treaty at a price (exclusive of expenses and accrued interest) which
exceeds 120% of the mean of the nominal quotations of the Debt Securities of
that series as shown in The Stock Exchange Daily Official List for the last
trading day preceding the date of purchase.
Section 12.07. INTENTIONALLY OMITTED
Section 12.08. INTENTIONALLY OMITTED
-76-
<PAGE>
Section 12.09. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 12.05 (and, if so specified
pursuant to Section 3.01, any other covenant not set forth herein and specified
pursuant to Section 3.01 to be applicable to the Debt Securities of any series,
except as otherwise provided pursuant to Section 3.01) with respect to the Debt
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Debt Securities of
such series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent expressly so waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES
Section 13.01. Applicability of Article.
------------------------
Debt Securities of any series which are redeemable before their
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 3.01 for Debt Securities of any series)
in accordance with this Article.
Section 13.02. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem (or, in the case of Discount
Securities, to permit the Holders to elect to surrender for redemption) any Debt
Securities shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company of less than all of the Debt Securities of any
series pursuant to Section 13.03, the Company shall, at least 60 days before the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Debt Securities of such series to be redeemed. In the
case of any redemption of Debt Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Debt Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restrictions.
Section 13.03. Selection by Trustee of Debt Securities to Be
---------------------------------------------
Redeemed.
Except in the case of a redemption in whole of the Bearer Securities
or the Registered Securities of such series, if less than all the Debt
Securities of any series are to be redeemed at the election of the Company, the
particular Debt Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding Debt
Securities of such series not previously called for redemption, by such method
-77-
<PAGE>
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Debt Securities of such series or any integral multiple
thereof) of the principal amount of Debt Securities of such series in a
denomination larger than the minimum authorized denomination for Debt Securities
of such series pursuant to Section 3.02 in the Currency in which the Debt
Securities of such series are denominated. The portions of the principal amount
of Debt Securities so selected for partial redemption shall be equal to the
minimum authorized denominations for Debt Securities of such series pursuant to
Section 3.02 in the Currency in which the Debt Securities of such series are
denominated or any integral multiple thereof, except as otherwise set forth in
the applicable form of Debt Securities. In any case when more than one
Registered Security of such series is registered in the same name, the Trustee
in its discretion may treat the aggregate principal amount so registered as if
it were represented by one Registered Security of such series.
The Trustee shall promptly notify the Company in writing of the Debt
Securities selected for redemption and, in the case of any Debt Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debt Securities shall
relate, in the case of any Debt Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Debt Security which has
been or is to be redeemed.
Section 13.04. Notice of Redemption.
--------------------
Notice of redemption shall be given by the Company, or at the
Company's request, by the Trustee in the name and at the expense of the Company,
not less than 30 days and not more than 60 days prior to the Redemption Date to
the Holders of Debt Securities of any series to be redeemed in whole or in part
pursuant to this Article Thirteen, in the manner provided in Section 1.05. Any
notice so given shall be conclusively presumed to have been duly given, whether
or not the Holder receives such notice. Failure to give such notice, or any
defect in such notice to the Holder of any Debt Security of a series designated
for redemption, in whole or in part, shall not affect the sufficiency of any
notice of redemption with respect to the Holder of any other Debt Security of
such series.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that Debt Securities of such series are being redeemed by the
Company pursuant to provisions contained in this Indenture or the terms of
the Debt Securities of such series or a supplemental indenture establishing
such series, if such be the case, together with a brief statement of the
facts permitting such redemption,
-78-
<PAGE>
(4) if less than all Outstanding Debt Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Debt Securities to be redeemed,
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debt Security to be redeemed, and that interest
thereon, if any, shall cease to accrue on and after said date,
(6) that, unless otherwise specified in such notice, Coupon Securities
of any series, if any, surrendered for redemption must be accompanied by
all Coupons maturing subsequent to the date fixed for redemption, failing
which the amount of any such missing Coupon or Coupons will be deducted
from the Redemption Price,
(7) the Place or Places of Payment where such Debt Securities are to
be surrendered for payment of the Redemption Price,
(8) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 3.05(b) or
otherwise, the last date on which such exchanges may be made, and
(9) that the redemption is for a sinking fund, if such is the case.
Section 13.05. Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date for any Debt Securities, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 12.04) an amount of money in the Currency or Currencies in
which such Debt Securities are denominated (except as provided pursuant to
Section 3.01 or 3.10) sufficient to pay the Redemption Price of such Debt
Securities or such amount or any portions thereof which are to be redeemed on
that date.
Section 13.06. Debt Securities Payable on Redemption Date.
------------------------------------------
Notice of redemption having been given as aforesaid, any Debt
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price in the Currency in which the Debt Securities of
such series are payable (except as otherwise specified pursuant to Section 3.01
or 3.10), and from and after such date (unless the Company shall default in the
payment of the Redemption Price) such Debt Securities shall cease to bear
interest. Upon surrender of any such Debt Security for redemption in accordance
with said notice, such Debt Security shall be paid by the Company at the
Redemption Price; provided, however, that installments of interest on Bearer
-------- -------
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 12.03) and, unless otherwise specified as
contemplated by Section 3.01, only upon presentation and surrender of Coupons
for such interest; and
-79-
<PAGE>
provided, further, that, unless otherwise specified as contemplated by Section
- -------- -------
3.01, installments of interest on Registered Securities which have a Stated
Maturity on or prior to the Redemption Date for such Debt Securities shall be
payable according to the terms of such Debt Securities and the provisions of
Section 3.07.
If, as a result of the failure of the Company to deposit sufficient
funds with the Trustee, any Debt Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debt Security.
If any Coupon Security surrendered for redemption shall not be
accompanied by all Coupons appertaining thereto maturing on or after the
Redemption Date, the Redemption Price for such Coupon Security may be reduced by
an amount equal to the face amount of all such missing Coupons. If thereafter
the Holder of such Coupon shall surrender to any Paying Agent outside the United
States any such missing Coupon in respect of which a deduction shall have been
made from the Redemption Price, such Holder shall be entitled to receive the
amount so deducted. The surrender of such missing Coupon or Coupons may be
waived by the Company and the Trustee, if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless.
Section 13.07. Debt Securities Redeemed in Part.
--------------------------------
Any Debt Security which is to be redeemed only in part shall be
surrendered at the Corporate Trust Office or such other office or agency of the
Company as is specified pursuant to Section 3.01 (in the case of Registered
Securities) and at an office of the Trustee or such other office or agency of
the Company outside the United States as is specified pursuant to Section 3.01
(in the case of Bearer Securities) with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the Security Registrar and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing, and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Debt Security without service charge, a new Debt
Security or Debt Securities of the same series, of like tenor and form, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Debt Security so surrendered, and, in the case of a Coupon Security, with
appropriate Coupons attached. In the case of a Debt Security providing
appropriate space for such notation, at the option of the Holder thereof, the
Trustee, in lieu of delivering a new Debt Security or Debt Securities as
aforesaid, may make a notation on such Debt Security of the payment of the
redeemed portion thereof.
-80-
<PAGE>
ARTICLE FOURTEEN
SINKING FUNDS
Section 14.01. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Debt Securities of a series except as otherwise specified
pursuant to Section 3.01 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debt Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Debt Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Debt
Securities of any series, the amount of any cash sinking fund payment may be
subject to reduction as provided in Section 14.02. Each sinking fund payment
shall be applied to the redemption of Debt Securities of any series as provided
for by the terms of Debt Securities of such series.
Section 14.02. Satisfaction of Mandatory Sinking Fund Payments with
----------------------------------------------------
Debt Securities.
- ---- ----------
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Debt Securities of a series in cash, the Company may at its
option, at any time no more than sixteen months and no less than 45 days prior
to the date on which such sinking fund payment is due, deliver to the Trustee
Debt Securities of such series (together with the unmatured Coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Company, except Debt Securities of such series which have been redeemed through
the application of mandatory sinking fund payments pursuant to the terms of the
Debt Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such sinking fund payment and stating that the Debt Securities
of such series were originally issued by the Company by way of bona fide sale or
other negotiation for value, provided that such Debt Securities shall not have
been previously so credited. Such Debt Securities shall be received and
credited for such purpose by the Trustee at the Redemption Price specified in
such Debt Securities for redemption through operation of the sinking fund and
the amount of such mandatory sinking fund payment shall be reduced accordingly.
Section 14.03. Redemption of Debt Securities for Sinking Fund.
----------------------------------------------
Not less than 60 days prior to each sinking fund payment date for any
series of Debt Securities (unless a shorter period shall be satisfactory to the
Trustee), the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the Currency or Currencies in which the Debt
Securities of such series are denominated (except as provided pursuant to
Section 3.01 or 3.10) and the
-81-
<PAGE>
portion thereof, if any, which is to be satisfied by delivering and crediting
Debt Securities of such series pursuant to Section 14.02 and whether the Company
intends to exercise its rights to make a permitted optional sinking fund payment
with respect to such series. Such certificate shall be irrevocable and upon its
delivery the Company shall be obligated to make the cash payment or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. In the case of the failure of the Company to deliver such
certificate, the sinking fund payment due on the next succeeding sinking fund
payment date for such series shall be paid entirely in cash and shall be
sufficient to redeem the principal amount of the Debt Securities of such series
subject to a mandatory sinking fund payment without the right to deliver or
credit Debt Securities as provided in Section 14.02 and without the right to
make any optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Debt Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Debt
Securities of such series at the Redemption Price specified in such Debt
Securities with respect to the sinking fund. Any sinking fund moneys not so
applied or allocated by the Trustee (or by the Company if the Company is acting
as its own Paying Agent) to the redemption of Debt Securities shall be added to
the next sinking fund payment received by the Trustee (or if the Company is
acting as its own Paying Agent, segregated and held in trust as provided in
Section 12.04) for such series and, together with such payment (or such amount
so segregated), shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys with respect to the Debt Securities of
any particular series held by the Trustee (or if the Company is acting as its
own Paying Agent, segregated and held in trust as provided in Section 12.04) on
the last sinking fund payment date with respect to Debt Securities of such
series and not held for the payment or redemption of particular Debt Securities
of such series shall be applied by the Trustee (or by the Company if the Company
is acting as its own Paying Agent), together with other moneys, if necessary, to
be deposited (or segregated) sufficient for the purpose, to the payment of the
principal of the Debt Securities of such series at Maturity.
The Trustee shall select or cause to be selected the Debt Securities
to be redeemed upon such sinking fund payment date in the manner specified in
Section 13.03 and the Company shall cause notice of the redemption thereof to be
given in the manner provided in Section 13.04. Such notice having been duly
given, the redemption of such Debt Securities shall be made upon the terms and
in the manner stated in Section 13.06.
On or before each sinking fund payment date, the Company shall pay to
the Trustee (or, if the Company is acting as its own Paying Agent, the Company
shall segregate and hold in trust as provided in Section 12.04) in cash a sum,
in the Currency or Currencies in which Debt Securities of such series are
denominated (except as provided pursuant to Sections 3.01 or 3.10), equal to the
principal and any interest accrued to the Redemption Date for Debt Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section.
-82-
<PAGE>
Neither the Trustee nor the Company shall redeem any Debt Securities
of a series with sinking fund moneys or mail any notice of redemption of Debt
Securities of such series by operation of the sinking fund for such series
during the continuance of a default in payment of interest, if any, on any Debt
Securities of such series or of any Event of Default (other than an Event of
Default occurring as a consequence of this paragraph) with respect to the Debt
Securities of such series, except that if the notice of redemption shall have
been provided in accordance with the provisions hereof, the Trustee (or the
Company, if the Company is then acting as its own Paying Agent) shall redeem
such Debt Securities if cash sufficient for that purpose shall be deposited with
the Trustee (or segregated by the Company) for that purpose in accordance with
the terms of this Article. Except as aforesaid, any moneys in the sinking fund
for such series at the time when any such default or Event of Default shall
occur and any moneys thereafter paid into such sinking fund shall, during the
continuance of such default or Event of Default, be held as security for the
payment of the Debt Securities and Coupons, if any, of such series; provided,
--------
however, that in case such default or Event of Default shall have been cured or
- -------
waived as provided herein, such moneys shall thereafter be applied on or prior
to the next sinking fund payment date for the Debt Securities of such series on
which such moneys may be applied pursuant to the provisions of this Section.
ARTICLE FIFTEEN
DEFEASANCE
Section 15.01. Applicability of Article.
------------------------
If, pursuant to Section 3.01, provision is made for the defeasance of
Debt Securities of a series, and if the Debt Securities of such series are
Registered Securities and denominated and payable only in Dollars (except as
provided pursuant to Section 3.01) then the provisions of this Article shall be
applicable except as otherwise specified pursuant to Section 3.01 for Debt
Securities of such series. Defeasance provisions, if any, for Debt Securities
denominated in a Foreign Currency or Currencies or for Bearer Securities may be
specified pursuant to Section 3.01.
-83-
<PAGE>
Section 15.02. Defeasance Upon Deposit of Moneys or U.S. Government
----------------------------------------------------
Obligations.
- -----------
At the Company's option, either (a) the Company shall be deemed to
have been Discharged (as defined below) from its obligations with respect to
Debt Securities of any series ("legal defeasance option") or (b) if so specified
pursuant to Section 3.01, the Company shall cease to be under any obligation to
comply with any obligation of the Company or restrictive covenant added for the
benefit of such series pursuant to Section 3.01) ("covenant defeasance option"),
in either case at any time after the applicable conditions set forth below have
been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Debt Securities of such series (i) money in an amount, or (ii) U.S.
Government Obligations (as defined below) which through the payment of
interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (iii) a combination of (i) and (ii), sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge each installment of principal (including any
mandatory sinking fund payments) of and premium, if any, and interest on,
the Outstanding Debt Securities of such series on the dates such
installments of interest or principal and premium are due;
(2) such deposit shall not cause the Trustee with respect to the Debt
Securities of that series to have a conflicting interest as defined in
Section 6.08 and for purposes of the Trust Indenture Act with respect to
the Debt Securities of any series;
(3) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) if the Debt Securities of such series are then listed on any
national securities exchange, the Company shall have delivered to the
Trustee an Opinion of Counsel or a letter or other document from such
exchange to the effect that the Company's exercise of its option under this
Section would not cause such Debt Securities to be delisted;
(5) no Event of Default or event (including such deposit) which, with
notice or lapse of time or both, would become an Event of Default with
respect to the Debt Securities of such series shall have occurred and be
continuing on the date of such deposit and, with respect to the legal
defeasance option only, no Event of Default under Section 5.01(5) or
Section 5.01(6) or event which with the giving of notice or lapse of time,
or both, would become an Event of Default under Section 5.01(5) or Section
5.01(6) shall have occurred and be continuing on the 91st day after such
date;
-84-
<PAGE>
(6) the Company shall have delivered to the Trustee an Opinion of
Counsel or a ruling from the Internal Revenue Service to the effect that
such deposit, defeasance or the Holders of the Debt Securities of such
series will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit, defeasance or Discharge; and
(7) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in accordance with Section 1.02.
Notwithstanding the foregoing, if the Company exercises its covenant defeasance
option and an Event of Default under Section 5.01(5) or Section 5.01(6) or event
which with the giving of notice or lapse of time, or both, would become an Event
of Default under Section 5.01(5) or Section 5.01(6) shall have occurred and be
continuing on the 91st day after the date of such deposit, the obligations of
the Company referred to under the definition of covenant defeasance option with
respect to such Debt Securities shall be reinstated. Money and securities held
in trust pursuant to a legal defeasance shall not be subject to Article Sixteen.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Debt Securities of such series and to have satisfied all the obligations under
this Indenture relating to the Debt Securities of such series (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same), except (A) the rights of Holders of Debt Securities of such series to
receive, from the trust fund described in clause (1) above, payment of the
principal of (and premium, if any) and interest on such Debt Securities when
such payments are due, (B) the Company's obligations with respect to the Debt
Securities of such series under Sections 3.04, 3.05, 3.06, 6.07, 12.03 and 15.03
and (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the timely payment of which its full faith
and credit is pledged, or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States the payment
of which is unconditionally guaranteed as a full faith and credit obligation by
the United States, which, in either case under clauses (i) or (ii), are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligation or a specific payment of interest
on or principal of any such U.S. Government Obligation held by such custodian
for the account of the holder of a depository receipt; provided that (except as
--------
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of the U.S. Government Obligation evidenced
by such depository receipt.
-85-
<PAGE>
Section 15.03. Deposited Moneys and U.S. Government Obligations to Be
------------------------------------------------------
Held in Trust.
- -------------
All moneys and U.S. Government Obligations deposited with the Trustee
pursuant to Section 15.02 in respect of Debt Securities of a series shall be
held in trust and applied by it, in accordance with the provisions of such Debt
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Debt Securities, of all sums due
and to become due thereon for principal (and premium, if any) and interest, if
any, but such money need not be segregated from other funds except to the extent
required by law.
Section 15.04. Repayment to Company.
--------------------
The Trustee and any Paying Agent shall promptly pay or return to the
Company upon Company Request any moneys or U.S. Government Obligations held by
them at any time that, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are not required for the payment of the principal of
(and premium, if any) and interest on the Debt Securities of any series for
which money or U.S. Government Obligations have been deposited pursuant to
Section 15.02.
The provisions of the last paragraph of Section 12.04 shall apply to
any money held by the Trustee or any Paying Agent under this Article that
remains unclaimed for two years after the Maturity of any series of Debt
Securities for which money or U.S. Government Obligations have been deposited
pursuant to Section 15.02.
ARTICLE SIXTEEN
SUBSIDIARY GUARANTEE
Section 16.01 Subsidiary Guarantee.
--------------------
To the extent applicable to any series of Debt Securities, the
Subsidiary Guarantors will, jointly and severally, fully and unconditionally
guarantee to each Holder of a Security authenticated and delivered by the
Trustee, and to the Trustee on behalf of such Holder, the due and punctual
payment of the principal of (and premium, if any) and interest on such Security
when and as the same shall become due and payable on the terms and subject to
the conditions established in or pursuant to the applicable Board Resolution.
Each of the Subsidiary Guarantors hereby jointly and severally agrees
that its obligations under any Subsidiary Guarantee issued pursuant hereto shall
be absolute unconditional, irrespective of, and shall be unaffected by, the
validity, regularity or enforceability of the applicable Debt Security or this
Indenture, the absence of any action to enforce the same or any release,
amendment, waiver, or indulgence granted to the Company or any guarantor or any
consent to departure from any requirement of any other guarantee of all or any
of the applicable Debt Securities or any other circumstances which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor. Each of the Subsidiary Guarantors hereby waives the benefits of
diligence, presentment, demand for payment, any requirement that the Trustee or
any of the Holders protect, secure, perfect or insure any security interest in
or other Lien on any property subject thereto or exhaust any right or take any
action against the Company or any other Person or any collateral, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest or notice with
respect to the applicable Debt Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants under any Subsidiary Guarantee issued
pursuant hereto will not be discharged in respect of the applicable Debt
Security except by complete performance of the obligations contained in the
applicable Debt Security and in any such Subsidiary Guarantee issued pursuant
hereto.
Section 16.02 Execution and Delivery of Subsidiary Guarantees.
-----------------------------------------------
The Subsidiary Guarantees, if any, to be endorsed on the Debt
Securities shall include the terms of the Subsidiary Guarantee set forth in
Section 16.01 and any other terms that may be set forth in the form established
pursuant to Section 2.01. Each of the Subsidiary Guarantors hereby agrees to
execute its Subsidiary Guarantee, if any, in a form established pursuant to
Section 2.01, to be endorsed on each Debt Security authenticated and delivered
by the Trustee.
The Subsidiary Guarantee shall be executed on behalf of each
respective Subsidiary Guarantor by any one of such Subsidiary Guarantor's
Chairman of the Board, Vice Chairman of the Board, President, Vice Presidents or
other person duly authorized by the Board of Directors of such Subsidiary
Guarantor, attested by its Secretary or Assistant Secretary. The signature of
any or all of these persons on the Subsidiary Guarantee may be manual or
facsimile.
A Subsidiary Guarantee bearing the manual or facsimile signature of
individuals who were at any time the proper officers of a Subsidiary Guarantor
shall bind such Subsidiary Guarantor, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of the Security on which such Subsidiary Guarantee is endorsed or did
not hold such offices at the date of such Subsidiary Guarantee.
The delivery of any Debt Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee endorsed thereon on behalf of the Subsidiary Guarantors and
shall bind each Subsidiary Guarantor notwithstanding the fact that Subsidiary
Guarantee does not bear the signature of such Subsidiary Guarantor. Each of the
Subsidiary Guarantors hereby jointly and severally agrees that its Subsidiary
Guarantee set forth in Section 16.01 and in the form of Subsidiary Guarantee
established pursuant to Section 2.01 shall remain in full force and effect
notwithstanding any failure to endorse a Subsidiary Guarantee on any Security.
-86-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
THE MONEY STORE INC.
By: ____________________________________
Title: ___________________________________
Attest:
________________________
Title:
Seal
THE CHASE MANHATTAN BANK,
as Trustee
By:_____________________________________
Title: ___________________________________
Attest:
________________________
Title:
Seal
THE MONEY STORE/D.C. INC.
THE MONEY STORE/KENTUCKY INC.
THE MONEY STORE/MINNESOTA INC.
THE MONEY STORE AUTO FINANCE INC.
CLASSNOTES INC.
DYNA-MARK, INC.
EQUITY INSURANCE AGENCY, INC.
MAJOR BROKERAGE CO., INC.
PRINCETON ESCROW
THE MONEY STORE HOME EQUITY CORP.
THE MONEY STORE INVESTMENT CORPORATION
THE MONEY STORE OF NEW YORK INC.
THE COMMERCE GROUP
THE MONEY STORE COMMERCIAL MORTGAGE INC.
THE MONEY STORE SERVICE CORP.
TMS MORTGAGE INC.
THE MONEY STORE U.K. INC.
THE MONEY STORE REALTY INC.
TMS VENTURE HOLDINGS, INC.
By:
---------------------------------
Title:
------------------------------
-87-
<PAGE>
STATE OF NEW JERSEY )
: ss.:
COUNTY OF UNION )
On the ___ day of April, 1997, before me personally came Morton Dear,
to me known, who, being by me duly sworn, did depose and say that his office is
located at 2840 Morris Avenue, Union, New Jersey 07083; that he is Executive
Vice President and Chief Financial Officer of The Money Store Inc. one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
__________________________
Notary Public
SEAL
<PAGE>
STATE OF )
: ss.:
COUNTY OF )
On the __ day of April, 1997, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that his office is located at 450 West 33/rd/ Street, 15/th/ Floor, New York,
New York 10004; that he is, ____________________ of The Chase Manhattan Bank,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.
________________________
Notary Public
SEAL
<PAGE>
EXHIBIT A
[FORMS OF CERTIFICATION]
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
________________________
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that as of the date hereof and except as set forth
below principal amount of the above captioned Debt Securities held by you for
our account (i) is owned by person(s) that are not United States person(s) (as
defined below), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (as defined in Section 1.165-
12(c)(1)(v) of the United States Treasury regulations) ("financial
institutions") purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Debt Securities through foreign branches of
United States financial institutions and who hold the Debt Securities through
such United States financial institutions on the date hereof (and in either case
(a) or (b), each such United States financial institution hereby agrees, on its
own behalf or through its agent, that you may advise the Company or the
Company's agent that it will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as
amended, and the Treasury regulations thereunder), or (iii) is owned by United
States or foreign financial institution(s) for the purpose of resale during the
restricted period (as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United
States Treasury regulations), and in addition if the owner of the Debt
Securities is a United States or foreign financial institution described in
clause (iii) above (whether or not also described in clause (i) or (ii)) this is
to further certify that such financial institution has not acquired the Debt
Securities for the purpose of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the beneficial
interest in the temporary global Security held by you for our account in
accordance with your operating procedures if any applicable statement herein is
not correct on such date, and in the absence of any such notification it may be
assumed that this certification applies as of such date.
This certificate excepts and does not relate to $____________
principal amount of Debt Securities held by you for our account as to which we
are not able to provide a certificate in this form. We understand that exchange
of such portion of the temporary global Note for
A-1
<PAGE>
definitive Bearer Securities or interests in a permanent global Note cannot be
made until we are able to provide a certificate in this form.
We understand that this certificate is required in connection with
certain tax laws and regulations of the United States. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States Person" means any citizen or resident of the United
States, any corporation, partnership or other entity created or organized in or
under the laws of the United States and any estate or trust the income of which
is subject to United States federal income taxation regardless of its source.
"United States" means the United States of America (including the States and the
District of Columbia) and its "possessions" which include Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands.
Dated:________________________, 19__
[To be dated no earlier than the
10th day before the Exchange Date]
By:_____________________________
As, or as agent for, the
beneficial owner(s) of the
portion of the temporary
global Note to which this
certificate relates.
A-2
<PAGE>
EXHIBIT B
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR AND
CEDEL, SOCIETE ANONYME IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL NOTE]
CERTIFICATE
________________________
[Insert title or sufficient description
of Securities to be delivered]
The undersigned certifies that, based solely on certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
to the effect set forth in the Indenture as of the date hereof, $___________
principal amount of the above-captioned Debt Securities (i) is owned by
person(s) that are not United States person(s) (as defined below), (ii) is owned
by United States person(s) that are (a) foreign branches of United States
financial institutions (as defined in Section 1.165-12(c)(1)(v) of the United
States Treasury regulations) ("financial institutions") purchasing for their own
account or for resale, or (b) United States person(s) who acquired the Debt
Securities through foreign branches of United States financial institutions and
who hold the Debt Securities through such United States financial institutions
on the date hereof (and in either case (a) or (b), each such United States
financial institution has agreed, on its own behalf or through its agent, that
we may advise the Company or the Company's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the Treasury regulations thereunder), or (iii) is owned by
United States or foreign financial institution(s) for the purpose of resale
during the restricted period (as defined in Section 1.163-5(c)(2)(i)(D)(7) of
the United States Treasury regulations), and in addition United States or
foreign financial institutions described in clause (iii) above (whether or not
also described in clause (i) or (ii)) have certified that they have not acquired
the Debt Securities for the purpose of resale directly or indirectly to a United
States person or to a person within the United States or its possessions.
We further certify (i) that we are not making available for exchange
or collection of any interest any portion of the temporary Global Note excepted
in such certifications and (ii) that as of the date hereof we have not received
any notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of the
part submitted herewith for exchange or collection of any interest are no longer
true and cannot be relied upon as of the date hereof.
We understand that this certificate is required in connection with
certain tax laws and regulations of the United States. If administrative or
legal proceedings are commenced or
B-1
<PAGE>
threatened in connection with which this certificate is or would be relevant, we
irrevocably authorize you to produce this certificate or a copy thereof to any
interested party in such proceedings.
"United States person" means any citizen or resident of the United
States, any corporation, partnership or other entity created or organized in or
under the laws of the United States and any estate or trust the income of which
is subject to United States federal income taxation regardless of its source.
"United States" means the United States of America (including the States and the
District of Columbia) and its "possessions" which include Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands.
Dated:________________________, 19__
[To be dated no earlier than the
Exchange Date]
By: ____________________________
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
BRUSSELS OFFICE, as
Operator of the Euro-Clear
System] [CEDEL BANK,
SOCIETE ANONYME]
B-2
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF THE MONEY STORE INC.]
April 9, 1997
The Money Store Inc.
2840 Morris Avenue
Union, New Jersey 07083
Ladies and Gentlemen:
I am Corporate Counsel of The Money Store Inc., a New Jersey corporation
(the "Company"), and am rendering this opinion in connection with the Company's
preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), of a
Registration Statement on Form S-3 being filed on the date hereof with the
Commission and a Post Effective Amendment to a Registration Statement on Form
S-3 (No 33-98972) (together, the "Registration Statement"), relating to the
registration (X) by the Company of (A) up to an aggregate of $759,146,250 of its
(i) unsecured debt securities (the "Debt Securities"), which may be either
senior or subordinated, (ii) shares of preferred stock, no par value per share
(the "Preferred Stock"), and (iii) shares of common stock, no par value (the
"Common Stock" and, together with the Debt Securities and Preferred Stock, the
"Securities"), and (B) an indeterminate amount of Securities that may be issued
upon conversion or exchange of Debt Securities or Preferred Stock, as set forth
in the Registration Statement and (Y) by the Guarantors named in the
Registration Statement of certain guarantees of Debt Securities issued by the
Company. This opinion letter is Exhibit 5.1 to the Registration Statement.
The Securities are to be issued, separately or together, in one or more
series and are to be sold from time to time as set forth in the Registration
Statement, the Prospectus contained therein (the "Prospectus") and any
amendments or supplements thereto.
<PAGE>
The Money Store Inc.
April 9, 1997
Page 2
In rendering this opinion, I have examined copies of the Amended and
Restated Certificate of Incorporation (the "Certificate of Incorporation") and
Amended and Restated By-Laws of the Company, each as amended to the date hereof,
the Registration Statement, and originals or copies of such other corporate
minutes, records, agreements and other instruments of the Company, certificates
of public officials and other documents and have made such examinations of law,
as I have deemed necessary to form the basis of the opinion hereinafter
expressed. In my examination of such materials, I have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals and the conformity to original documents of all copies submitted to
me. As to various questions of fact material to such opinion, I have relied, to
the extent I deemed appropriate, upon representations, statements and
certificates of officers and representatives of the Company and others.
I express no opinion except as to the laws of the State of New Jersey.
The enforceability opinion expressed in (a) below may be limited by (i) the
effect of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally and
court decisions with respect thereto and (ii) the application of equitable
principles in any proceeding whether at law or in equity.
<PAGE>
The Money Store Inc.
April 9, 1997
Page 3
Based upon the foregoing, I am of the opinion that when (1) the
Registration Statement shall have been declared effective by order of the
Securities and Exchange Commission, (2) the terms of any class or series of
Securities have been authorized by appropriate corporate action of the Company,
(3) if such Securities are Debt Securities, the appropriate indenture has been
entered into by both the Company and the appropriate trustee and such Debt
Securities shall have been executed by the Company and authenticated by such
trustee and (4) such Securities have been issued and sold upon terms and
conditions set forth in the Registration Statement, the applicable Prospectus
and the applicable supplement to such Prospectus, then (a) the Debt Securities
will be duly authorized and validly issued in accordance with their terms and
the terms of the applicable indenture and will constitute legal and binding
obligations of the Company, and (b) the shares of the Preferred Stock and Common
Stock will be duly authorized and validly issued, fully paid and non-assessable.
I hereby consent to be named in the Registration Statement and in the
Prospectus under the caption "Legal Matters" which forms part of the
Registration Statement. In giving such consent, I do not admit hereby that I
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or under the Rules and Regulations of
the Securities and Exchange Commission promulgated thereunder.
Stroock & Stroock & Lavan LLP may rely on this opinion insofar as it
relates to the Debt Securities as if such opinion had been addressed to such
firm.
Yours truly,
/s/ Eric R. Elwin
-----------------------------
Eric R. Elwin
Corporate Counsel
<PAGE>
EXHIBIT 5.2
STROOCK & STROOCK & LAVAN LLP
180 MAIDEN LANE
NEW YORK, NEW YORK 10038-4982
April 9, 1997
The Money Store Inc.
2840 Morris Avenue
Union, New Jersey 07083
Ladies and Gentlemen:
We have acted as special counsel to The Money Store Inc., a New Jersey
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-3
being filed on the date hereof with the Commission and a Post Effective
Amendment to the Registration Statement on Form S-3 (No. 33-98972) (together,
the "Registration Statement"), relating to the registration, (X) by the Company
of (A) up to an aggregate of $734,146,250 of its (i) unsecured debt securities
(the "Debt Securities"), which may be either senior or subordinated, (ii) shares
of preferred stock, no par value per share (the "Preferred Stock"), and (iii)
shares of common stock, no par value per share (the "Common Stock" and, together
with the Debt Securities and the Preferred Stock, the "Securities"), and (B) an
indeterminate amount of Securities that may be issued upon conversion of
exchange of Debt Securities or Preferred Stock, as set forth in the Registration
Statement and (Y) by the Guarantors named in the Registration Statement of
certain guarantees of Debt Securities issued by the Company (the "Subsidiary
Guarantees"). This opinion letter is Exhibit 5.2 to the Registration Statement.
The Debt Securities are to be issued, separately or together, in one or more
series and are to be sold from time to time as set forth in the Registration
Statement, the prospectus contained therein and any amendments or supplements
thereto.
We have examined copies of the Restated Certificate of Incorporation (the
"Certificate of Incorporation") and Amended and Restated By-Laws of the Company,
each as amended to the date hereof, the Registration Statement (including the
exhibits thereto), and originals or copies of such other corporate minutes,
records, agreements and other instruments of the Company, certificates of public
officials and other documents
<PAGE>
The Money Store Inc.
April 9, 1997
Page 2
and have made such examinations of law, as we have deemed necessary to form the
basis of the opinion hereinafter expressed. In such examinations, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity to original documents of all
copies submitted to us. As to various questions of fact material to such
opinion, we have relied, to the extent we deemed appropriate, upon
representations, statements and certificates of officers and representatives of
the Company and others.
Attorneys involved in the preparation of this opinion are admitted to practice
law in the State of New York and we do not express any opinion herein concerning
any law other than the laws of the State of New York. As to all matters
relating to New Jersey law relevant to this opinion, we have, with your
permission, relied without independent investigation upon the opinion of Eric R.
Elwin, Esq., Vice President and Corporate Counsel of the Company, of even date
herewith.
Based upon and subject to the foregoing, we are of the opinion that: (i) when
the issuance, execution and delivery of each series of Debt Securities has been
authorized by all necessary corporate action of the Company (subject to the
terms thereof being otherwise in compliance with applicable law at such time)
and otherwise in accordance with the provisions of the applicable indenture and
related supplemental indenture, if any, and when such Debt Securities have been
duly executed, authenticated and delivered by the applicable trustee and sold as
described in the Registration Statement, such Debt Securities will be duly
authorized and validly issued and will constitute legal and binding obligations
of the Company, enforceable in accordance with their terms and the terms of the
applicable indenture and related supplemental indenture, if any, and (ii) when a
Subsidiary Guarantee has been duly and validly authorized by all necessary
action on the part of the applicable Guarantor (subject to the terms thereof
being otherwise in compliance with applicable law at such time) and when sold as
described in the Registration Statement, such Subsidiary Guarantee will
constitute the valid and binding obligation of the applicable Guarantor,
enforceable against such Guarantor in accordance with its terms. The foregoing
opinions are subject to the effect of bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto, and to the
understanding that we express no opinion with respect to the application of
equitable principles in any proceeding, whether at law or in equity.
<PAGE>
The Money Store Inc.
April 9, 1997
Page 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus. In giving such consent, we do not admit
hereby that we come within the category of persons whose consent is required
under Section 7 of the Act or the Rules and Regulations of the Commission
thereunder.
Very truly yours,
/s/ STROOCK & STROOCK & LAVAN LLP
STROOCK & STROOCK & STROOCK LLP
<PAGE>
EXHIBIT 12.1
STATEMENT OF COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
for the Company for each of the years in the five-year period ended December 31,
1996.
The ratio of earnings to fixed charges has been computed by dividing
earnings by fixed charges. Earnings consist of income before income taxes plus
fixed charges. Fixed charges consist of interest on all indebtedness and the
portion of rental expense considered to be representative of interest.
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------
1996 1995 1994 1993 1992
---------- -------- ------- ------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Earnings $273,357 $180,389 $98,462 $71,429 $58,552
-------- -------- ------- ------- -------
Interest expense 124,076 93,985 43,059 29,184 31,504
Rent expense(1) 4,741 3,371 2,376 1,672 1,448
-------- -------- ------- ------- -------
Total fixed charges $128,817 $ 97,356 $45,435 $30,856 $32,952
======== ======== ======= ======= =======
Ratio 2.12x 1.85x 2.17x 2.31x 1.78x
======== ======= ======= ======= =======
</TABLE>
- -------------
(1) Rent expense reflects one-third of the Company's total rent expense.
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors and Shareholders
The Money Store Inc.:
We consent to the use of our report incorporated herein by reference, and to the
reference to our Firm under the heading "Experts" in the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Sacramento, California
April 9, 1997
<PAGE>
EXHIBIT 25.1
--------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
--------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
--------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------
<TABLE>
<S> <C> <C>
NEW JERSEY THE MONEY STORE INC. 22-2293022
AND ITS GUARANTORS
VIRGINIA THE MONEY STORE/D.C. INC. 22-2133027
KENTUCKY THE MONEY STORE/KENTUCKY INC. 22-2459832
MINNESOTA THE MONEY STORE/MINNESOTA INC. 22-3003495
DELAWARE THE MONEY STORE AUTO FINANCE INC. 22-3331186
DELAWARE CLASS NOTES INC. 22-3400682
NEW JERSEY DYNA-MARK, INC. 22-1920775
NEW JERSEY EQUITY INSURANCE AGENCY, INC. 22-1936537
NEW JERSEY MAJOR BROKERAGE CO., INC. 22-1902811
CALIFORNIA PRINCETON ESCROW 95-3427953
KENTUCKY THE MONEY STORE HOME EQUITY CORP. 22-2522232
NEW JERSEY THE MONEY STORE INVESTMENT CORPORATION 22-2293019
NEW YORK THE MONEY STORE OF NEW YORK INC. 22-3143559
CALIFORNIA THE COMMERCE GROUP 68-0103196
NEW JERSEY THE MONEY STORE COMMERCIAL MORTGAGE INC. 22-2378261
NEW JERSEY THE MONEY STORE SERVICE CORP. 22-2293016
NEW JERSEY TMS MORTGAGE INC. 22-3217781
DELAWARE THE MONEY STORE U.K. INC. 91-1784015
CALIFORNIA THE MONEY STORE REALTY INC. 68-0379803
DELAWARE TMS VENTURE HOLDINGS, INC. 91-1771259
(State or other (Exact name of obligor as specified in its charter) (I.R.S. employer
jurisdiction of identification No.)
incorporation or
organization)
</TABLE>
2840 MORRIS AVENUE
UNION, NEW JERSEY 07083
(Address of principal executive offices) (Zip Code)
--------------------
DEBT SECURITIES
(Title of the indenture securities)
--------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany,
New York 12110.
Board of Governors of the Federal Reserve System,
Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-
1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York and State of New York, on the 8th day
of April, 1997.
THE CHASE MANHATTAN BANK
By /s/Kathleen Perry
-------------------------
Kathleen Perry
Second Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1996, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ........................................... $ 11,509
Interest-bearing balances ................................... 8,457
Securities: ...................................................
Held to maturity securities.................................... 3,128
Available for sale securities.................................. 40,534
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold........................................... 9,222
Securities purchased under agreements to resell.............. 422
Loans and lease financing receivables:
Loans and leases, net of unearned income............ 133,935
Less: Allowance for loan and lease losses........... 2,789
Less: Allocated transfer risk reserve............... 16
--------
Loans and leases, net of unearned income,
allowance, and reserve....................................... 131,130
Trading Assets................................................. 49,876
Premises and fixed assets (including capitalized
leases)...................................................... 2,877
Other real estate owned........................................ 290
Investments in unconsolidated subsidiaries and
associated companies......................................... 124
Customer's liability to this bank on acceptances
outstanding.................................................. 2,313
Intangible assets.............................................. 1,316
Other assets................................................... 11,231
--------
TOTAL ASSETS................................................... $272,429
========
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices..................................... $ 87,006
Noninterest-bearing............................ $35,783
Interest-bearing............................... 51,223
-------
In foreign offices, Edge and Agreement
subsidiaries, and IBF's................................. 73,206
Noninterest-bearing ........................... $ 4,347
Interest-bearing............................... 68,859
Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and of its Edge and
Agreement subsidiaries, and in IBF's
Federal funds purchased................................. 14,980
Securities sold under agreements to repurchase.......... 10,125
Demand notes issued to the U.S. Treasury.................. 1,867
Trading liabilities....................................... 34,783
Other Borrowed money:
With a remaining maturity of one year or less........... 14,639
With a remaining maturity of more than one year 425
Mortgage indebtedness and obligations under
capitalized leases....................................... 40
Bank's liability on acceptances executed and
outstanding.............................................. 2,267
Subordinated notes and debentures......................... 5,471
Other liabilities......................................... 11,343
TOTAL LIABILITIES......................................... 256,152
--------
Limited-Life Preferred stock and related surplus 550
EQUITY CAPITAL
Common stock.............................................. 1,251
Surplus................................................... 10,243
Undivided profits and capital reserves.................... 4,526
Net unrealized holding gains (Losses)
on available-for-sale securities.......................... (309)
Cumulative foreign currency translation
adjustments.............................................. 16
TOTAL EQUITY CAPITAL...................................... 15,727
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL................................ $272,429
========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER ) DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
