<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1996
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
OLYMPIC FINANCIAL LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MINNESOTA 41-1664848
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification
Number)
</TABLE>
OLYMPIC FINANCIAL CENTER
7825 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55439-2435
(612) 942-9880
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------------------
JOHN A. WITHAM
OLYMPIC FINANCIAL LTD.
OLYMPIC FINANCIAL CENTER
7825 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55439-2435
(612) 942-9880
(Name and address, including zip code, and telephone number, including area code
of agent for service of process)
--------------------------
COPY TO:
RICHARD G. SWANSON, ESQ. JAMES D. ATKINSON III
Dorsey & Whitney LLP Olympic Financial Center
200 South Sixth Street 7825 Washington Avenue South
Minneapolis, Minnesota 55402 Minneapolis, Minnesota 55439-2435
(612) 340-2600 (612) 942-9880
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED DISTRIBUTION:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT AS
DETERMINED BY MARKET CONDITIONS.
--------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest investment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, 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,
please check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) PRICE(1)(2) FEE(3)
<S> <C> <C> <C> <C>
Debt Securities (4)(5), Preferred Stock (6),
Depositary Shares (6)(7), Common Stock, par
value $.01 per share (7)(8), Securities
Warrants (9) and Units (10).................. $500,000,000(3)(7) 100% $500,000,000 $116,656
</TABLE>
(FOOTNOTES ON NEXT PAGE)
--------------------------
Pursuant to Rule 429, the Prosectus in this Registration Statement also
relates to and constitutes Post-Effective Amendment No. 1 to Registration
Statement No. 333-1126, which was declared effective March 25, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
- --------------------------
(1) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D of Form S-3. Securities registered hereby may be
offered for U.S. dollars or the equivalent thereof in foreign currencies,
currency units or composite currencies. Securities registered hereby may be
sold separately, together or in units with other securities registered
hereby.
(2) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(o). The proposed maximum offering price will be determined from
time to time by the Registrant in connection with the issuance by the
Registrant of the securities registered hereunder.
(3) The amount of securities being carried forward from Registration Statement
No. 333-1126 pursuant to Rule 429 is $115,037,500 and the Registrant
previously paid a filing fee with respect to such securities of $39,668
(calculated at the rate of 1/29th of 1% of the amount of securities being
registered, the rate in effect at the time such Registration Statement was
filed).
(4) If any Debt Securities are issued at an original issue discount, then such
greater amount as may be sold for an aggregate initial offering price of up
to the proposed aggregate offering price set forth above.
(5) In addition to any Debt Securities that may be issued directly under this
Registration Statement, there is being registered hereunder such
indeterminate amount of Debt Securities as may be issued upon conversion or
exchange of other Debt Securities, Preferred Stock or Depositary Shares, for
which no consideration will be received by the Registrant.
(6) Such indeterminate number of shares of Preferred Stock and Common Stock, and
such indeterminate number of Depositary Shares, as may be issued from time
at indeterminate prices. In addition to any Preferred Stock, Depositary
Shares and Common Stock that may be issued directly under this Registration
Statement, there are being registered hereunder such indeterminate number of
shares of Preferred Stock and Common Stock, and such indeterminate number of
Depositary Shares, as may be issued upon conversion or exchange of Debt
Securities, Preferred Stock or Depositary Shares, as the case may be, for
which no separate consideration will be received by the Registrant.
(7) Depositary Shares will represent fractional interests in Preferred Stock
registered hereby.
(8) The aggregate amount of Common Stock registered hereunder is limited, solely
for purposes of any at the market offerings, to that which is permissible
under Rule 415(a)(4) of the Securities Act of 1933, as amended.
(9) Securities Warrants will represent rights to purchase Debt Securities,
Preferred Stock or Common Stock registered hereby.
(10) Units may consist of two or more of the Securities referred to in Notes
(1)-(8) offered and sold together.
<PAGE>
$500,000,000
[LOGO]
DEBT SECURITIES, PREFERRED STOCK, DEPOSITARY SHARES,
COMMON STOCK, SECURITIES WARRANTS AND UNITS
-----------------
Olympic Financial Ltd. (the "Company") may from time to time offer and sell:
(i) its debt securities, which may be either secured or unsecured senior debt
securities (the "Senior Debt Securities") or unsecured subordinated debt
securities (the "Subordinated Debt Securities" and, together with the Senior
Debt Securities, the "Debt Securities"); (ii) shares of its preferred stock,
$.01 par value per share (the "Preferred Stock"), in one or more series; (iii)
depositary shares (the "Depositary Shares") evidenced by depositary receipts;
(iv) shares of its common stock, par value $.01 per share (the "Common Stock");
and (v) warrants (collectively, the "Securities Warrants") to purchase Debt
Securities (the "Debt Securities Warrants"), Preferred Stock (the "Preferred
Stock Warrants") or shares of Common Stock (the "Common Stock Warrants"), for an
aggregate initial public offering price of up to $500,000,000 (or the equivalent
in foreign currencies, currency units or composite currencies (each, a
"Currency")). The Debt Securities, Preferred Stock, Depositary Shares, Common
Stock and Securities Warrants (collectively, the "Securities") may be offered
independently or together in any combination ("Units") for sale directly to
purchasers or through dealers, underwriters or agents to be designated. The Debt
Securities and Preferred Stock may be convertible into or exchangeable for other
Securities. The Securities will be offered to the public at prices and on terms
determined at the time of offering. The Securities may be sold for U.S. dollars
or other Currencies and any amounts payable by the Company in respect of the
Securities may likewise be payable in U.S. dollars or other Currencies.
The Senior Debt Securities, except to the extent secured by collateral, if
any, will rank PARI PASSU in right of payment with all unsecured and
unsubordinated debt of the Company. The Subordinated Debt Securities will be
subordinated to all existing and future Senior Debt (as defined) of the Company.
The Prospectus Supplement accompanying this Prospectus sets forth (where
applicable), with respect to the series or issue of Securities for which this
Prospectus and such Prospectus Supplement are being delivered: (i) the terms of
any Debt Securities offered, including, where applicable, their title, ranking,
aggregate principal amount, maturity, rate of interest (or method of
calculation) and time of payment thereof, any redemption or repayment terms, any
restrictive covenants, the Currency or Currencies in which such Debt Securities
will be denominated or payable, any index, formula or other method pursuant to
which principal, premium, if any, or interest, if any, may be determined, any
conversion or exchange provisions, and other specific terms not described in
this Prospectus; (ii) the terms of any Preferred Stock offered, including, where
applicable, the specific designation, number of shares, dividend rate (or method
of calculation) and time of payment thereof, liquidation preference, any
redemption or repayment terms, any conversion or exchange provisions, any voting
rights, and other specific terms not described in this Prospectus; (iii) the
terms of any Depositary Shares offered which are not described in this
Prospectus, including the fraction of a share of Preferred Stock represented by
each such Depositary Share; (iv) the terms of any Securities Warrants offered,
including where applicable, the exercise price, detachability, duration and
other specific terms not described in this Prospectus; and (v) the initial
public offering price and the net proceeds to the Company and other specific
terms related to the offered Securities.
As of the date hereof, the Company had outstanding registration statements
filed under the Securities Act of 1933, as amended, relating to continuous
offerings of: (i) up to $50 million aggregate principal amount of the Company's
unsecured subordinated notes issuable at various rates and maturities and
subordinated in right of payment to any Senior Debt Securities or Subordinated
Debt Securities offered hereby (the "Junior Subordinated Notes") and (ii) up to
3,871,364 shares of Common Stock issuable upon the exercise of outstanding
warrants, which have been registered pursuant to the exercise of registration
rights previously granted by the Company (the "Outstanding Warrant Stock"). The
Securities included in this Prospectus do not include Junior Subordinated Notes
or Outstanding Warrant Stock.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE SECURITIES OFFERED HEREBY, SEE "RISK FACTORS" AT PAGE 4
HEREIN.
-----------------
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 Securities may be offered directly, through agents designated from time
to time or through underwriters or dealers. If any agents or underwriters are
involved in the sale of any of the Securities, their names, and any applicable
fee, commission, purchase price or discount arrangements with them, will be set
forth, or will be calculable from the information set forth, in the applicable
Prospectus Supplement or Prospectus Supplements.
-------------------
THE DATE OF THIS PROSPECTUS IS , 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission, Room 1024, 450 Fifth Street N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Seven World Trade Center, Suite 1300, New York, New York 10048, and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and copies of such
materials can be obtained from the Public Reference Branch of the Commission at
450 Fifth Street N.W., Washington, D.C. 20549, at prescribed rates. Reports,
proxy statements and other information concerning the Company can also be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
Additional information regarding the Company and the Securities offered
hereby is contained in the Registration Statement and the exhibits relating
thereto in respect of the Securities offered hereby, filed with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). For further
information pertaining to the Company and the Securities offered hereby,
reference is made to the Registration Statement and the exhibits thereto, which
may be inspected without charge at the office of the Commission at 450 Fifth
Street N.W., Washington, D.C. 20549, and copies thereof may be obtained from the
Commission at prescribed rates.
In addition, the Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The Web site's address is
http://www.sec.gov.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars," or "U.S. $").
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act (File No. 1-20526) and the Securities Act are incorporated in
and made a part of this Prospectus by reference:
(i) Annual Report on Form 10-K/A-2 for the year ended December 31, 1995, filed
March 18, 1996;
(ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, filed
May 8, 1996; Quarterly Report on Form 10-Q for the quarter ended June 30,
1996, filed August 13, 1996; Quarterly Report on Form 10-Q for the quarter
ended Septemer 30, 1996, filed November 12, 1996.
(iii) Current Reports on Form 8-K dated February 20, 1996; March 15, 1996, April
16, 1996; June 5, 1996; June 6, 1996; July 26, 1996; July 26, 1996; August
20, 1996; August 26, 1996; August 26, 1996; September 11, 1996; September
19, 1996; October 7, 1996; October 10, 1996; October 10, 1996; October 17,
1996; October 23, 1996; November 1, 1996; November 7, 1996;
(iv) The description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A filed on March 22, 1996; and
(v) The description of the Company's Rights Agreement contained in the
Company's Registration Statement on Form 8-A filed on November 7, 1996.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the 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
2
<PAGE>
document which also is or is deemed to be incorporated by reference herein or in
the accompanying Prospectus Supplement 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.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated herein by reference (other than
exhibits, unless such exhibits are specifically incorporated by reference in
such documents). Written requests for such copies should be directed to the
Company, Olympic Financial Center, 7825 Washington Avenue South, Minneapolis, MN
55439-2435, Attention: Secretary. Telephone requests may be directed to (612)
942-9880.
3
<PAGE>
THE COMPANY
The Company purchases, securitizes and services consumer automobile loans
originated primarily by new car dealers affiliated with major foreign and
domestic manufacturers. At September 30, 1996, the Company had purchased loans
from more than 7,000 dealers in 38 states, a substantial majority of which sell
loans to the Company on a regular basis. Loans are purchased through 17 regional
buying centers serving as "hubs" in 14 states, supplemented by a network of
dealer development representatives ("DDRs") serving as "spokes." DDRs operating
in these "spokes" generate loans in their assigned market, and all
administrative functions, including credit approval and loan processing, are
performed at the "hub" or at the Company's headquarters in Minneapolis,
Minnesota. As a result of this expansion strategy, the Company has expanded the
number of dealers in its network and has significantly increased its annual
volume of automobile loans purchased, from $305.8 million in 1993 to $740.3
million in 1994, $2.1 billion in 1995, and $2.0 billion for the nine months
ended September 30, 1996, without incurring the additional costs that would be
associated with establishing a proportionate number of new buying centers. In
1996 the Company implemented a strategy to enhance its servicing and collections
capabilities by regionalizing these functions into four servicing and
collections centers. During the fourth quarter of 1996 the Company opened these
new regional servicing and collection centers in Colorado, Minnesota, North
Carolina and Texas. In addition, in 1996 the Company expanded its program to
finance and resell repossession inventory in the retail markets and has
diversified its outlets through multiple used car dealers.
The Company purchases each loan in accordance with its underwriting
guidelines and procedures, which focus on buyer qualifications and collateral
value. The Company's underwriting guidelines do not distinguish between new or
used vehicles. The Company maintains a tiered pricing system, allowing it to
price loans according to the borrower's credit characteristics as measured by
the Company's proprietary underwriting and credit scoring criteria. The Company
prices its loan products in order to maximize interest rate spreads relative to
expected losses within each credit tier. The Company markets its loan products
to dealers under two programs, designated Premier and Classic. Premier borrowers
generally have stronger credit characteristics than Classic borrowers. The
Company considers the loans it purchases under both programs to be in the
"prime" loan category. In accordance with prevailing industry practice, the
Company offers an up-front dealer participation to the originating dealer for
each loan purchased. "Premier" and "Classic" are proprietary trademarks of the
Company.
The Company uses warehouse facilities to fund the initial purchase of loans
and then securitizes loans purchased by it as asset-backed securities, generally
on a quarterly or more frequent basis. In its securitizations, the Company
(through its special purpose subsidiary, Olympic Receivables Finance Corp.
("ORFC")) transfers loans to newly-formed securitization trusts, which issue one
or more classes of asset-backed securities. The asset-backed securities are
simultaneously sold to investors (except for certain subordinated classes of
securities which may be retained by the Company) and the Company recognizes gain
on the sale of the loans. Each month, collections of principal and interest on
the loans are used by the trustee to pay the holders of the related asset-backed
securities, to establish and maintain spread accounts as a source of cash to
cover shortfalls in collections, if any, and to pay expenses associated with the
securitization and subsequent servicing. After such application by the trustee,
excess collections are distributed to ORFC. The Company acts as the servicer of
loans held by each trust in return for a monthly fee. All of the Company's
securitization trusts are credit-enhanced through financial guaranty insurance
policies issued by Financial Security Assurance Inc. ("FSA"), which insure
payments of principal and interest due on the related asset-backed securities.
As a result, such asset-backed securities have been rated AAA by Standard &
Poor's Ratings Services and Aaa by Moody's Investors Service, Inc.
Olympic Financial Ltd. is a Minnesota corporation. The Company's principal
office and mailing address are Olympic Financial Center, 7825 Washington Avenue
South, Minneapolis, Minnesota 55439-2435 and its telephone number is (612)
942-9880. The Company has been requested by the U.S. Olympic Committee to change
its name by April 1, 1997.
4
<PAGE>
RISK FACTORS
INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING MATTERS IN CONNECTION WITH
AN INVESTMENT IN THE SECURITIES IN ADDITION TO THE OTHER INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR IN THE ACCOMPANYING
PROSPECTUS SUPPLEMENT. INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT CONTAINS
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995, WHICH CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "EXPECT," "ANTICIPATE,"
"ESTIMATE" OR "CONTINUE" OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR
COMPARABLE TERMINOLOGY. THE FOLLOWING MATTERS CONSTITUTE CAUTIONARY STATEMENTS
IDENTIFYING IMPORTANT FACTORS WITH RESPECT TO SUCH FORWARD-LOOKING STATEMENTS,
INCLUDING CERTAIN RISKS AND UNCERTAINTIES, THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE IN SUCH FORWARD-LOOKING STATEMENTS.
LIQUIDITY AND ACCESS TO CAPITAL RESOURCES
NEGATIVE OPERATING CASH FLOWS. The Company's business requires substantial
cash to support the payment of dealer participations, the funding of spread
accounts in connection with securitizations, the purchase of loans pending
securitization, the financing of repossed inventory and other cash requirements,
in addition to debt service and dividends. These cash requirements increase as
the volume of the Company's loan purchases increases. To the extent that
increases in the volume of loan purchases and securitizations provide income, a
substantial portion of such income is received by the Company in cash over the
life of the loans. The Company has operated historically on a negative operating
cash flow basis and expects to continue to do so for so long as the Company's
volume of loan purchases continues to grow at a significant rate. As a result of
the Company's historical growth rate, the Company has used increasingly larger
amounts of cash than it has generated from its operating activities. The Company
has funded these negative operating cash flows principally through borrowings
from financial institutions, sales of equity securities and sales of senior and
subordinated notes. The Company's ability to execute its growth strategy depends
upon its continued ability to obtain substantial additional long-term debt and
equity capital through access to the capital markets or otherwise. There can be
no assurance that the Company will have access to the capital markets when
needed or will be able to obtain financing upon terms reasonably satisfactory to
the Company. Factors which could affect the Company's access to the capital
markets, or the costs of such capital, include changes in interest rates,
general economic conditions, the perception in the capital markets of the
Company's business, results of operations, leverage, financial condition and
business prospects, and the performance of the Company's securitization trusts.
In addition, covenants with respect to the Company's debt securities and credit
facilities may significantly restrict the Company's ability to incur additional
indebtedness and to issue new classes of preferred stock.
POTENTIAL INABILITY TO REFINANCE EXISTING INDEBTEDNESS. The Company's
ability to repay its outstanding indebtedness at maturity may depend on its
ability to refinance such indebtedness, which could be adversely affected if the
Company does not have access to the capital markets for the sale of additional
debt or equity through public offerings or private placements on terms
reasonably satisfactory to the Company. See "Negative Operating Cash Flows"
above.
DEPENDENCE ON WAREHOUSE FINANCING. The Company depends on warehouse
facilities with financial institutions or institutional lenders to finance its
purchase of loans on a short-term basis pending securitization. At September 30,
1996, the Company had $700.0 million of warehouse facilities through banks and
institutionally managed asset-backed securities conduits, of which $661.5
million was available. These facilities expire at various times in 1997, subject
to renewal or extension. Implementation of the Company's growth strategy
requires continued availability of warehouse facilities and may require
increases in the capacity of warehouse facilities. There can be no assurance
that such financing will be available on terms reasonably satisfactory to the
Company. The inability of the Company to arrange additional warehouse facilities
or to extend or replace existing facilities when they expire would have a
material adverse effect on the Company's business, financial condition and
results of operations and on the Company's outstanding securities.
DEPENDENCE ON SECURITIZATION. The Company has relied upon its ability to
aggregate and sell loans as asset-backed securities in the secondary market to
generate cash proceeds for repayment of warehouse
5
<PAGE>
facilities and to purchase new loans from dealers. Through September 30, 1996
the Company had securitized approximately $5.1 billion of automobile loans,
approximately $3.4 billion of which were outstanding at September 30, 1996.
Accordingly, adverse changes in the Company's asset-backed securities program or
in the asset-backed securities market for automobile receivables generally could
materially adversely affect the Company's ability to purchase and resell loans
on a timely basis and upon terms reasonably satisfactory to the Company. The
Company endeavors to effect public securitizations of its loans on at least a
quarterly basis. However, market and other considerations, including the
conformity of loans to insurance company and rating agency requirements, could
affect the timing of such transactions. Any delay in the sale of loans beyond a
quarter-end would eliminate the related gain on sale in the given quarter and
adversely affect the Company's reported earnings for such quarter. All of the
Company's securitizations from March 1993 through September 30, 1996 and one of
the Company's warehouse facilities have utilized credit enhancement in the form
of financial guaranty insurance policies issued by FSA to achieve "AAA/Aaa"
ratings with respect to the asset-backed securities. The Company believes that
financial guaranty insurance policies reduce the costs of the securitizations
and warehouse facility relative to alternative forms of credit enhancements
available to the Company. The Company has committed to use FSA for future credit
enhancement on insured securitizations through 1997 in consideration for certain
limitations on FSA insurance premiums. FSA is not required to insure
Company-sponsored securitizations and there can be no assurance that it will
continue to do so or that future Company-sponsored securitizations will be
similarly rated.
LOAN PERFORMANCE RISKS
POTENTIAL NEGATIVE EFFECTS ON FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
LIQUIDITY. The Company's business, financial condition, results of operations
and liquidity depend, to a material extent, on the performance of loans
purchased and sold by the Company. When such loans are sold in securitizations,
the Company recognizes gain on sale. Finance income receivable, the Company's
principal asset, has been calculated using assumptions concerning future default
and prepayment rates on securitized loans that are consistent with the Company's
historical experience and market conditions and present value discount rates
that the Company believes would be requested by an unrelated purchaser of an
identical stream of estimated cash flows. Management believes that the Company's
estimates of excess cash flow were reasonable at the time each gain on sale of
loans was recorded. However, the actual rates of default and/or prepayment on
such loans may exceed those estimated for purposes of calculating the Company's
finance income receivable and consequently may adversely affect anticipated
future excess cash flow. The Company periodically reviews its prepayment and
loss assumptions in relation to current performance of the loans and market
conditions, and, if necessary, writes down the balance of finance income
receivable. The Company's business, financial condition and results of
operations could be materially adversely affected by such adjustments in the
future. No assurance can be given that loan losses and prepayments will not
exceed the Company's estimates or that finance income receivable could be sold
at its stated value on the balance sheet, if at all.
POSSIBLE RESTRICTIONS ON CASH FLOW FROM SECURITIZATIONS. The Company's
future liquidity and financial condition, and its ability to finance the growth
of its business and to repay or refinance its indebtedness, will depend to a
material extent on distributions of excess cash flow from securitization trusts.
The Company's agreements with FSA provide that the Company must maintain in a
spread account for each insured securitization trust specified levels of excess
cash during the life of the trust. These spread accounts are initially funded
out of cash flows from the related trust. Thereafter, during each month, excess
cash flow due to ORFC from all insured securitization trusts is first used to
replenish any spread account deficiencies and is then distributed to the
Company. If excess cash flow from all insured securitization trusts, plus cash
flow from recoveries, is not sufficient to replenish all such spread accounts,
no cash flow would be available to the Company from ORFC for that month. Each
insured securitization trust has certain portfolio performance tests relating to
levels of delinquency, defaults and net losses on the loans in such trust. If
any of these levels are exceeded, the amount required to be retained in the
related spread account, and not passed through to ORFC, will be increased. Such
levels have historically been exceeded prior to 1996 and the Company has
obtained waivers from FSA to permit distributions of cash from certain spread
accounts to ORFC. There can be no assurance that such levels will not be
exceeded in the future or that, if exceeded, waivers will be available. In
certain events with respect to any series of asset-backed securities insured by
FSA, the Company
6
<PAGE>
will be in default under its insurance agreement with FSA and distributions of
cash flow to ORFC from the related securitization trust may be suspended until
the asset-backed securities have been redeemed. Such events include the
cumulative net loss rate, as defined, equaling or exceeding an agreed upon
percentage of the principal balance of loans included in the securitization
trust related to such series. Certain of the Company's securitization trusts
have exceeded such insurance agreement thresholds prior to 1996 and the Company
has obtained waivers from FSA to permit distributions of cash to ORFC. There can
be no assurance that such thresholds will not be exceeded in the future or that,
if exceeded, waivers will be available. In addition, the spread account for each
securitization is cross-collateralized to the spread accounts established in
connection with the Company's other securitization trusts (including one of its
warehouse facilities) such that excess cash flow from a performing
securitization trust may be used to support negative cash flow from, or to
replenish a deficient spread account in connection with, a nonperforming
securitization trust, thereby further restricting excess cash flow available to
ORFC. FSA also has a collateral security interest in the stock of ORFC. If FSA
were to foreclose on such security interest following an event of default under
an insurance agreement with respect to a securitization trust, FSA could
preclude payment of dividends by ORFC to the Company, thereby eliminating the
Company's right to receive distributions of excess cash flow from all the
FSA-insured securitization trusts. The Company's right to service the loans sold
in securitizations insured by FSA is also generally subject to the discretion of
FSA. Accordingly, there can be no assurance that the Company will continue as
servicer for such loans and receive related servicing fees. Any increase in
limitations on the Company's cash flow from securitization trusts or inability
to obtain any necessary waivers from FSA or termination of servicing
arrangements could materially adversely affect the Company's cash flow and
liquidity, and ultimately its business, financial condition and results of
operations and its outstanding securities.
IMPACT OF PORTFOLIO GROWTH AND NEW PRODUCTS. The Company has experienced
rapid growth in its loan servicing portfolio. Historically, the statistical
incidence of delinquencies and defaults in connection with automobile loans
tends to vary over the age of the loan. For example, statistically, loans that
are between six and fourteen months old have had a higher likelihood of being
delinquent or defaulting than loans with similar credit characteristics that are
three months old. Accordingly, to the extent that portfolio growth results in a
servicing portfolio containing disproportionately more loans originated within
the prior six months, the current and historical delinquency and default rates
of loans in the servicing portfolio may understate future delinquency and
default rates. Also, there can be no assurance that the Company's transition
from centralized to regional servicing and collection will not adversly affect
the rate of loan deliquences and defaults. In addition, to the extent the
Company offers new loan products which involve different underwriting policies,
the delinquency and default rates of the Company's servicing portfolio may
change. The Company has instituted a tiered pricing system and has periodically
increased the authorized amount of loans purchased under its Classic program
involving borrowers who may not meet all of the underwriting standards in the
Company's Premier program and are charged rates of interest higher than those
under the Company's Premier program. As a result of the increases in Classic
loans as a proportion of the Company's portfolio, there has been an increase in
the rates of, and reserves for, delinquency, repossession and loss historically
reported by the Company. To estimate future delinquency, repossession and loss
experience related to Classic loans, the Company uses a combination of factors,
including actual loan performance experience on Premier loans, adjusted for the
estimated effects of less favorable credit characteristics, and industry
experience on loans with similar credit characteristics. However, there can be
no assurance that the Classic loans will perform under varying economic
conditions in the manner estimated by the Company. Any increase in delinquency,
repossession and loss rates related to Classic loans above the rates estimated
by the Company could have a material adverse effect on the Company's business,
financial condition and results of operations, as well as its liquidity.
Furthermore, because loan default and delinquency rates tend to increase during
the six- to fourteen-month period from loan origination, the impact of increases
in the Classic program on the Company's overall delinquency, repossession and
loss rates will not be fully realized until the amount of Classic loans which
have entered this six- to fourteen-month period is proportionate to the amount
of Classic loans being purchased by the Company relative to Premier loans. In
addition, certain of the Company's loan products which produce higher
deliquency, repossession and loss rates than initially expected may continue to
have an impact on the Company's overall loan performance,
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<PAGE>
even after being discontinued or modified, until the initially generated loans
mature beyond the six-to fourteen-month period. In 1996, the Company
discontinued a Classic loan product directed to first-time credits and modified
a Classic program for financing the sale of its repossessed inventory in retail
markets, each of which had experienced higher than expected delinquency,
repossession and loss rates.
POTENTIAL NEGATIVE IMPACT OF COVENANTS UNDER FINANCE AGREEMENTS. Increases
in loan delinquency and loss rates with respect to any securitization trust may
result in the trust's portfolio exceeding the various pool performance levels
established by FSA, thereby restricting or cutting off cash distributions to
ORFC from the securitization spread accounts. See "Cash Flow from
Securitizations" above. In addition, such increases may cause the Company to
exceed certain pool performance tests established in other agreements governing
its indebtedness. Under the terms of the indenture governing the Company's
outstanding 13% Senior Notes due 2000 (the "Senior Term Notes"), if at any
month-end the amount of charge-offs (net of recoveries) of automobile loans in
the Company's servicing portfolio during the preceding six-month period, times
two, exceeds 1.65% of the average servicing portfolio in the preceding seven
months ("Portfolio Loss Ratio"), the Company will be prohibited from purchasing
new automobile loans in excess of 20% of the Company's Adjusted Consolidated
Cash Flow (as defined in the indenture governing the Senior Term Notes) plus
proceeds of warehouse facilities and certain other available cash. If the
Portfolio Loss Ratio exceeds 1.65% for two consecutive months, then 50% of such
Adjusted Consolidated Cash Flow (as defined in the indenture governing the
Senior Term Notes) must be used to offer to repurchase Senior Term Notes. Such a
restriction on purchases of new automobile loans could have a material adverse
effect on the Company's business, financial condition and results of operations.
Covenants with respect to a series of Debt Securities may contain similar
restrictions or other covenants relating to portfolio performance. In addition,
if at the end of any month the Portfolio Loss Ratio exceeds 1.65% or the
Company's delinquency level exceeds 3.5%, an event of default will occur under
one of the Company's outstanding warehouse facilities. The delinquency level is
calculated as a percentage of outstanding principal balance of all automobile
loans owned or securitized by the Company as to which a payment is more than
thirty days past due. Upon the occurrence of an event of default under such
warehouse facility, the lending banks under such facility may accelerate the
payment of amounts outstanding thereunder and would have no further obligation
to extend additional credit. Furthermore, any such event of default or
acceleration may trigger cross-defaults under other outstanding indebtedness of
the Company and may result in the acceleration of amounts due thereunder. The
increase in Classic loans during 1996 has increased the risk that the Company
may trigger its Portfolio Loss Ratio covenants in the future.
SUBSTANTIAL INDEBTEDNESS
The issuance of Debt Securities offered hereby will have the effect of
increasing the Company's leverage. The degree to which the Company is leveraged
may impair its ability to obtain additional financing in the future. In
addition, the Company's debt service costs will increase as a result of the
issuance of Debt Securities, except to the extent proceeds are used to repay
outstanding indebtedness. The Company is also subject to restrictive covenants
under its debt agreements. If the Company should require, but be unable to
obtain, any cure, modification or waiver of noncompliance with any such
covenants in the future, default could occur with respect to the relevant
indebtedness and, under cross-default provisions, other indebtedness of the
Company, and there can be no assurance that the Company would be able to repay
or refinance such obligations in such circumstances. In addition, the indenture
governing the Senior Term Notes contains covenants requiring the Company to
repurchase such debt securities under certain circumstances, including a change
in control of the Company, as well as covenants that may significantly restrict
the Company's ability to incur additional debt and to issue new classes of
preferred stock. In 1996, the Company received an indication of interest to buy
the Company and requested its financial advisor to examine the strategic
alternatives available to the Company, including a sale of the Company. No
definitive offers to buy the Company were received, but there can be no
assurance that a change in control of the Company will not occur in the future.
The terms of a series of Debt Securities issued by the Company in the future may
contain similar covenants.
8
<PAGE>
SUBORDINATION OF THE DEBT SECURITIES
CONTRACTUAL SUBORDINATION OF THE SUBORDINATED DEBT SECURITIES. The payment
of principal of or interest or premium on the Subordinated Debt Securities is
subordinated in right of payment to all Senior Debt of the Company, as defined
in the Subordinated Indenture. As a result, in the event of the dissolution,
liquidation, winding up or reorganization of the Company, or of certain
bankruptcy and insolvency-related events, the holders of the Subordinated Debt
Securities would not receive payment until the holders of Senior Debt were paid
in full. Senior Debt is defined in the Indenture to include, among other debt,
any Company guarantees of, or reimbursement commitments with respect to,
indebtedness in connection with securitization transactions. In the event a
default in any payment in respect to any Senior Debt has occurred and is
continuing, the Company may not make any payments on the account of the
Subordinated Debt Securities.
STRUCTURAL SUBORDINATION. Any right of the Company to receive assets of any
of its subsidiaries upon the latter's liquidation or reorganization (and the
consequent right of the holders of the Debt Securities to participate in those
assets) will be effectively subordinated to the claims of creditors of such
subsidiaries before such proceeds may be available for distribution to the
parent Company. Substantially all of the Company's securitizations through
September 30, 1996 provide that ORFC, a special purpose subsidiary, owns the
rights to excess cash flow from such securitization trusts. Consequently, a
significant portion of the Company's available cash flow is in the form of
distributions from ORFC. ORFC is a separate and distinct legal entity and has no
obligation, contingent or otherwise, to pay any amounts due under the Debt
Securities or to make any funds available therefor, whether by dividends to the
Company or otherwise. Substantially all of the Company's finance income
receivable at September 30, 1996 is held by ORFC, and, in the event of
liquidation of both the Company and ORFC, creditors of ORFC would have first
claim to such assets before holders of the Debt Securities. To the extent any
restriction on the distribution of cash from ORFC or other subsidiaries to the
Company is applicable and enforced, the Company's ability to pay interest and
principal on the Debt Securities may be impaired. See "Loan Performance Risks --
Cash Flow from Securitizations" above.
ECONOMIC CONDITIONS
AUTOMOBILE MARKET CONDITIONS. Periods of economic slowdown or recession,
whether general, regional or industry-related, may increase the risk of default
on automobile loans and may have an adverse effect on the Company's business,
financial condition and results of operations. Such periods also may be
accompanied by decreased consumer demand for automobiles, resulting in reduced
demand for automobile loans and declining values of automobiles securing
outstanding loans, thereby weakening collateral coverage and increasing the
possibility of losses in the event of default. The increased proportion of loans
under the Company's Classic program has increased the Company's sensitivity to
changes in economic conditions. Significant increases in the inventory of used
automobiles during recessionary economies may depress the prices at which
repossessed automobiles may be sold or delay the timing of such sales. There can
be no assurance that the used automobile markets will be adequate for the sale
of repossessed automobiles and any material deterioration of such markets could
increase the Company's loan losses or reduce recoveries from the sale of
repossession inventory. In addition, the Company has channeled a significant
portion of its repossession inventory through retail resale markets instead of
wholesale markets, including the financing of such retail sales through its
Classic program, which had the effect of reducing the Company's loan losses
while delaying cash flow recovered from inventory turnover. The Company has
experienced significant growth in its repossesion inventory, which increased
from $4.8 million at September 30, 1995, to $46.5 million at September 30, 1996.
There can be no assurance that the Company will continue to use such retail
resale channels, that it will be able to realize such benefits to loan losses in
the future or that its inventories will not reach levels at which they cannot
readily be liquidated through such channels. Any such event might have an
adverse effect on loan loss levels.
INTEREST RATES. The Company's profitability may be directly affected by the
level of and fluctuations in interest rates, which affect the Company's gross
interest rate spread. The Company monitors the interest
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<PAGE>
rate environment and employs prefunding or other hedging strategies designed to
mitigate the impact of changes in interest rates on its gross interest rate
spread. However, there can be no assurance that the profitability of the Company
would not be adversely affected during any period of changes in interest rates.
MANAGEMENT OF RAPID GROWTH
The rapid growth of the Company's servicing portfolio has resulted in
increased demands on the Company's personnel and systems. The Company's ability
to support, manage and control continued growth is dependent upon, among other
things, its ability to hire, train, supervise and manage its larger workforce.
Furthermore, the Company's ability to manage portfolio delinquency and loss
rates is dependent upon the maintenance of efficient collection and repossession
procedures and adequate staffing therefor. There can be no assurance that the
Company will have trained personnel and systems adequate to support such growth.
ACTING CHIEF EXECUTIVE OFFICER
The Company's success depends on its ability to retain its management team.
In August 1996, the Company accepted the resignation of its chief executive
officer. Since that time, the acting chief executive officer has been Warren
Kantor, chairman of the executive committee of the Board of Directors, who
devotes part time to the business of the Company. The Company is actively
searching for a new chief executive officer. Any new chief executive officer may
affect the Company's business, financial condition and results of operations and
the continued availability of financing for its operations.
COMPETITION
The business of financing automobiles is highly competitive. Existing and
potential competitors include well-established financial institutions, such as
banks, other automobile finance companies, small loan companies, thrifts,
leasing companies and captive finance companies owned by automobile
manufacturers, such as General Motors Acceptance Corporation, Chrysler Credit
Corp. and Ford Motor Credit Company. Many of these competitors have greater
financial, technical and marketing resources than the Company and from time to
time offer special buyer incentives in the form of below-market interest rates
on certain classes of vehicles. Many of such competitors also have longstanding
relationships with automobile dealers and some of such major competitors provide
other forms of financing to automobile dealers, including dealer floor plan
financing and leasing, which is not provided by the Company. There can be no
assurance that the Company will be able to compete successfully with such
competitors.
REGULATION
The Company's business is subject to numerous federal and state consumer
protection laws and regulations, which, among other things: (i) require the
Company to obtain and maintain certain licenses and qualifications; (ii) limit
the interest rates, fees and other charges the Company is allowed to charge;
(iii) limit or prescribe certain other terms of the Company's automobile loan
contracts; (iv) require specific disclosures; and (v) define the Company's
rights to repossess and sell collateral. The Company believes it is in
substantial compliance with all such laws and regulations, and that such laws
and regulations have had no material effect on the Company's ability to operate
its business. Changes in existing laws or regulations, or in the interpretation
thereof, or the promulgation of any additional laws or regulations, could have a
material adverse effect on the Company's business, financial condition and
results of operations and upon its outstanding securities.
SHARES ELIGIBLE FOR FUTURE SALES
Additional shares of Common Stock may be issued upon the exercise of
outstanding stock options, the conversion of outstanding convertible preferred
stock and the exercise of outstanding warrants. Certain holders thereof have
registration rights with respect to such shares. The Company has registered
pursuant to such rights the sale from time to time of up to 3,871,364 shares of
Common Stock when, as and if issued upon the exercise of outstanding warrants.
Such issuances, or the resale of the Common Stock so acquired, could have an
adverse effect on the market price of the Company's Common Stock.
UNDESIGNATED SHARES; ANTI-TAKEOVER CONSIDERATIONS
The authorized and unissued stock of the Company, other than shares reserved
for issuance pursuant to options and warrants, consists of undesignated shares.
The Board of Directors, without any action by the
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<PAGE>
Company's shareholders, is authorized to designate and issue the undesignated
shares in such classes or series as it deems appropriate and to establish the
rights, preferences and privileges of such shares, including dividend,
liquidation and voting rights. The Company has adopted a shareholder rights plan
to deter a hostile takeover. Further, certain provisions of the Minnesota
Business Corporation Act may operate to discourage a negotiated acquisition or
unsolicited takeover of the Company. See "Description of Common Stock." Each or
any of the foregoing could have the effect of entrenching the Company's
directors, impeding or deterring an unsolicited tender offer or takeover
proposal regarding the Company and thereby depriving the then current
shareholders of the ability to sell their shares at a premium over the market
price, or otherwise adversely affecting the voting power, dividend, liquidation
and other rights of holders of Common Stock.
USE OF PROCEEDS
Unless otherwise specified in an applicable Prospectus Supplement, the net
proceeds to be received by the Company from the sale of the Securities offered
hereby will be added to the general funds of the Company and will be available
for working capital and other general corporate purposes, including funding the
growth in the volume of loan purchases and repayment of maturing obligations and
redemption of outstanding indebtedness. Pending such use, the Company may
temporarily invest the net proceeds in short-term investments or use them to
reduce short-term indebtedness.
RATIOS OF EARNINGS TO FIXED CHARGES AND
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following are the consolidated ratios of earnings to fixed charges and
to combined fixed charges and preferred stock dividends for the periods
presented.
<TABLE>
<CAPTION>
MARCH 8, 1990 NINE MONTHS ENDED
(DATE OF SIX MONTHS
INCORPORATION) ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30,
TO DECEMBER DECEMBER 31, ------------------------------------------ --------------------
31, 1991 1991 1992 1993 1994 1995 1995 1996
(DOLLARS IN THOUSANDS) ------------- ------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges.................. 1.72x 2.06x 3.75x 3.64x 4.53x
Deficiency in earnings to
fixed charges............ $ 1,525 $ 1,158 $ 1,342
Ratio of earnings to
combined fixed charges
and preferred stock
dividends................ 1.56x 1.31x 3.10x 2.95x 4.13x
Deficiency in earnings to
combined fixed charges
and preferred stock
dividends................ $ 1,525 $ 1,158 $ 1,342
</TABLE>
For purposes of calculating the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends, earnings are
defined as income (loss) before income taxes plus fixed charges. Fixed charges
consist of interest expense, amortization of debt discount and the interest
factor in rental charges. Combined fixed charges and preferred stock dividends
consist of the fixed charges described above plus the pre-tax income necessary
to pay dividends on the Company's outstanding 8% Cumulative Convertible
Exchangeable Preferred Stock (the "8% Preferred Stock," all of which was
converted or redeemed on or before December 2, 1996).
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<PAGE>
DESCRIPTION OF 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 terms of the Debt Securities specific to
Senior Debt Securities and to Subordinated Debt Securities are set forth under
the headings "Description of Senior Debt Securities" and "Description of
Subordinated Debt Securities," respectively. Particular terms of the Debt
Securities offered by any Prospectus Supplement and the extent, if any, to which
such general and specific provisions may apply to the Debt Securities so offered
will be described in the Prospectus Supplement relating to such Debt Securities.
The Debt Securities may be issued either separately, or together with, or upon
conversion of or in exchange for, other Securities.
The Debt Securities may be issued from time to time in one or more series.
The terms of each series of Debt Securities, including without limitation any
restrictive covenants with respect thereto, will be established by or pursuant
to a resolution of the Board of Directors of the Company and set forth or
determined in the manner provided in an Officers' Certificate or by a
supplemental indenture. The particular terms of the Debt Securities offered
pursuant to any Prospectus Supplement or Prospectus Supplements will be
described in such Prospectus Supplement or Prospectus Supplements.
The Senior Debt Securities and the Subordinated Debt Securities will be
issued under the indentures (the "Senior Indenture" and the "Subordinated
Indenture," respectively) between the Company and the Trustee named in the
applicable Prospectus Supplement. The forms of Senior Indenture and Subordinated
Indenture (collectively, the "Indentures") have been filed as exhibits to the
Registration Statement of which this Prospectus is a part. The following brief
summary of certain provisions of the Indentures does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all of the
provisions of the Indentures, and is further qualified by any description
contained in the applicable Prospectus Supplement or Prospectus Supplements.
Certain terms capitalized and not otherwise defined herein are defined in the
Indentures. Wherever particular sections or defined terms of the Indentures are
referred to, such sections or defined terms are incorporated herein by
reference.
GENERAL
The amount of Debt Securities offered by this Prospectus will be limited to
the amount of Securities set forth on the cover of this Prospectus that have not
been otherwise issued or reserved for issuance. The Indentures will not limit
the aggregate principal amount of Debt Securities which may be issued
thereunder.
The Senior Debt Securities, except to the extent secured by collateral, if
any, will rank PARI PASSU with other unsecured, unsubordinated indebtedness of
the Company. The Subordinated Debt Securities will be unsecured and will be
subordinated in right of payment to the prior payment in full of the Senior Debt
of the Company as described under "Description of Subordinated Debt Securities
- -- Subordination of Subordinated Debt Securities."
The applicable Prospectus Supplement will indicate the form, registered or
bearer, and denominations in which Debt Securities of any series may be issued.
Debt Securities may be issuable in the form of one or more Global Securities, as
described below under "-- Global Securities." The Debt Securities (other than
those issued in the form of a Global Security) are exchangeable or transferable
without charge therefor, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith
and require the holders to furnish appropriate endorsements and transfer
documents. (Senior Indenture Section 305; Subordinated Indenture Section 305)
Debt Securities may be issued as original issue discount securities to be
sold at a substantial discount below their principal amount. Special federal
income tax and other considerations applicable thereto and special federal tax
and other considerations applicable to any Debt Securities which are denominated
in a currency other than U. S. dollars will be described in the Prospectus
Supplement or Prospectus Supplements relating thereto.
Principal of and any premium and interest on the Debt Securities will be
payable, and the transfer of the Debt Securities will be registrable, at the
corporate trust office of the Trustee in the case of Subordinated
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<PAGE>
Debt Securities and the office or agency maintained for such purpose in the case
of the Senior Debt Securities. Interest on any Debt Security that is payable
will be paid to the Person in whose name that Debt Security is registered in the
Security Register. In addition, in the case of Subordinated Debt Securities
payment of interest may be made at the option of the Company by check mailed to
the address of the Person entitled thereto as it appears on the Security
Register. (Senior Indenture Sections 301, 305 and 307; Subordinated Indenture
Sections 301, 305, 307, 1001 and 1002)
The applicable Prospectus Supplement or Prospectus Supplements will describe
the terms of the Debt Securities offered thereby, including the following: (i)
the title of the offered Debt Securities and whether the offered Debt Securities
are Senior Debt Securities or Subordinated Debt Securities; (ii) any limit on
the aggregate principal amount of the offered Debt Securities; (iii) the Person
to whom any interest on the offered Debt Securities will be payable, if other
than the Person in whose name they are registered on the regular record date for
such interest; (iv) the date or dates, or the method by which such date or dates
are determined or extended, on which the principal or installments of principal
and premium, if any, of the offered Debt Securities is or are payable; (v) the
rate or rates (which may be fixed or variable) 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 from which any such interest will accrue, the
dates on which such interest on the offered Debt Securities will be payable and
the regular record dates therefor, the circumstances, if any, in which the
Company may defer interest payments and the basis for calculating interest if
other than a 360-day year of twelve 30-day months; (vi) the place or places
where the principal of and premium, if any, and interest on the offered Debt
Securities will be payable and the offered Debt Securities may be surrendered
for registration of transfer or exchange, if other than those provided for in
the Senior Indenture or the Subordinated Indenture; (vii) if applicable, the
period or periods within which, the price or prices at which and the terms and
conditions upon which the offered Debt Securities may be redeemed, in whole or
in part, at the option of the Company; (viii) the obligation, if any, of the
Company to redeem or purchase Debt Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a holder thereof and
the period or periods within which, the price or prices at which and the terms
and conditions upon which Debt Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation; (ix) whether the
Debt Securities of the series will be convertible into shares of Common Stock
and/or exchangeable for other securities, and if so, the terms and conditions
upon which such Debt Securities will be so convertible or exchangeable, and any
deletions from or modifications or additions to the applicable Indenture to
permit or to facilitate the issuance of such convertible or exchangeable Debt
Securities or the administration thereof; (x) the identity of each Security
Registrar and Paying Agent, if other than or in addition to the Trustee; (xi) if
the amount of principal of or any premium or interest on the offered Debt
Securities may be determined by reference to an index or pursuant to a formula,
the manner in which such amounts shall be determined; (xii) the applicability
of, and any addition to or change in the covenants and definitions set forth in
the applicable Indenture, as described under "Description of Senior Debt
Securities" and "Description of Subordinated Debt Securities"; (xiii) the
denominations in which any offered Debt Securities will be issuable, if other
than denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000; (xiv) if other than U. S. dollars, the currency or
currencies for the payment of principal of and any premium and interest on the
offered Debt Securities and the manner of determining the U.S. dollar equivalent
of the principal amount thereof for purposes of the definition of "outstanding",
and, if the principal of or any premium or interest on the offered Debt
Securities is payable, at the election of the Company or the holder thereof, in
one or more currencies other than that or those in which the offered Debt
Securities are stated to be payable, the currency or currencies in which payment
of the principal of and any premium and interest on such offered Debt Securities
is to be made and the periods within which and the terms and conditions upon
which such election is to be made; (xv) any other event or events of default
applicable with respect to the offered Debt Securities in addition to or in lieu
of those described under "Description of Senior Debt Securities -- Events of
Default under the Senior Indenture" and "Description of Subordinated Debt
Securities -- Events of Default under the Subordinated Indenture", and any
change in the right of the Trustee or the holders to declare the principal of or
any premium or interest on the offered Debt Securities due and payable; (xvi) if
less than the principal amount thereof, the portion of the principal payable
upon acceleration of such Debt Securities following an Event of Default;
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<PAGE>
(xvii) whether such Debt Securities are to be issued in whole or in part in the
form of one or more Global Securities and, if so, the identity of the depositary
for such Global Security or Securities, and any circumstances under which any
such Global Security may be exchanged for Debt Securities registered in the name
of, and any transfer of such Global Security may be registered to, a Person
other than such depositary or its nominee, if other than those described in the
applicable Indenture (see "-- Global Securities"); (xviii) if applicable, that
the offered Debt Securities, in whole or in any specified part, are not
defeasible; (xix) whether, with respect to any series of Senior Debt Securities,
such series will be secured and the type,
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<PAGE>
amount and other terms of, and provisions relating to, the collateral to be
provided as such security, and any deletions, additions or modifications to the
Senior Indenture to permit the issuance of secured Senior Debt Securities or the
administration thereof; and (xx) any other terms of the offered Debt Securities
not inconsistent with the provisions of the applicable Indenture. (Senior
Indenture Section 301; Subordinated Indenture Section 301)
If the purchase price of any Debt Securities is payable in a currency other
than U.S. dollars or if principal of, or premium, if any, or interest, if any,
on any of the Debt Securities is payable in any currency other than U.S.
dollars, the specific terms and other information with respect to such Debt
Securities and such foreign currency, including any material foreign currency
risks, will be specified in the Prospectus Supplement or Prospectus Supplements
relating thereto.
Under the Indentures, the terms of the Debt Securities of any series may
differ, and the Company, without the consent of the holders of the Debt
Securities of any series, may reopen a previous series of Debt Securities and
issue additional Debt Securities of such series or establish additional terms of
such series.
GLOBAL SECURITIES
The following description will apply to any series of Debt Securities
issued, in whole or in part, in the form of a Global Security or Global
Securities deposited with, or on behalf of, The Depository Trust Company ("DTC")
(each such Debt Security represented by a Global Security being herein referred
to as a "Book-Entry Security").
Upon initial issuance, all Book-Entry Securities of the same series and
bearing interest, if any, at the same rate or pursuant to the same formula and
having the same date of issuance, redemption provisions, if any, repayment
provisions, if any, stated maturity and other terms will be represented by a
single Global Security. Each Global Security representing Book-Entry Securities
will be deposited with, or on behalf of, DTC and will be registered in the name
of DTC or a nominee of DTC. Unless otherwise specified in the applicable Pricing
Supplement, all Book-Entry Securities will be denominated in U. S. dollars.
Upon the issuance of a Global Security, DTC will credit accounts held with
it with the respective principal or face amounts of the Book-Entry Securities
represented by such Global Security. The accounts to be credited shall be
designated initially by the Agent through which the Debt Security was sold or,
to the extent that such Debt Securities are offered and sold directly, by the
Company. Ownership of beneficial interests in a Global Security will be limited
to institutions that have accounts with DTC ("participants") and to persons that
may hold interests through such participants. Ownership of beneficial interests
by participants in a Global Security will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by DTC for
such Global Security. Ownership of beneficial interests in such Global Security
by persons that hold through participants will be shown on, and the transfer of
that ownership interest within such participant will be effected only through,
records maintained by such participant.
Payment of principal of, premium, if any, and interest, if any, on
Book-Entry Securities represented by any such Global Security will be made to
DTC or its nominee, as the case may be, as the sole registered holder of the
Book-Entry Securities represented thereby for all purposes under the Indentures.
None of the Company, the Trustee, the Paying Agent or any agent of the Company
or the Trustee will have a responsibility or liability for any aspect of DTC's
records relating to or payments made on account of beneficial ownership
interests in a Global Security representing any Book-Entry Securities or any
other aspect of the relationship between DTC and its participants or the
relationship between such participants and the owners of beneficial interests in
a Global Security owning through such participants or for maintaining,
supervising or reviewing any of DTC's records relating to such beneficial
ownership interests.
The Company has been advised by DTC that upon receipt of any payment of
principal of, premium, if any, or interest, if any, on any such Global Security,
DTC will immediately credit, on its book-entry registration and transfer system,
the accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of DTC. Payments by participants to owners of beneficial
interests in a Global Security held through such
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participants will be governed by standing instructions and customary practices,
as is now the case with securities held by such participants for customer
accounts registered in "street name," and will be the sole responsibility of
such participants.
No Global Security may be transferred except as a whole by a nominee of DTC
to DTC or to another nominee of DTC, or by DTC or any such nominee to a
successor of DTC or a nominee of such successor.
A Global Security representing Book-Entry Securities is exchangeable for
certificated Debt Securities of the same series and bearing interest, if any, at
the same rate or pursuant to the same formula, having the same date of issuance,
redemption provisions, if any, repayment provisions, if any, stated maturity and
other terms and of differing authorized denominations aggregating a like amount,
if any, if (x) DTC notifies the Company that it is unwilling or unable to
continue as depositary for such Global Security or if at any time DTC ceases to
be a clearing agency registered under the Exchange Act, (y) the Company in its
sole discretion determines that such Global Security shall be exchangeable for
certificated Debt Securities or (z) there shall have occurred and be continuing
an Event of Default with respect to the Book-Entry Securities. Such certificated
Debt Securities shall be registered in the names of the owners of the beneficial
interests in such Global Security as provided by DTC's relevant participants (as
identified by DTC).
Owners of beneficial interests in a Global Security will not be considered
the registered holders thereof for any purpose under the applicable Indenture,
and no Global Security representing Book-Entry Securities shall be exchangeable
or transferrable. Accordingly, each person owning a beneficial interest in such
a Global Security must rely on the procedures of DTC and, if such person is not
a participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a registered holder under the
applicable Indenture. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
certificated form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
DTC, as the registered holder of each Global Security, may appoint agents
and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
registered holder is entitled to give or take under the applicable Indenture.
The Company understands that under existing industry practices, in the event
that the Company requests any action of registered holders or that an owner of a
beneficial interest in such a Global Security desires to give or take any action
which a registered holder is entitled to give or take under such Indenture, DTC
would authorize the participants holding the relevant beneficial interests to
give or take such action, and such participants would authorize beneficial
owners owning through such participants to give or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
DTC has advised the Company that DTC is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered under the Exchange
Act. DTC was created to hold the securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers, banks (which may include the Trustee), trust companies, clearing
corporations, and certain other organizations some of whom (and/or their
representatives) own DTC. Access to DTC's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
DESCRIPTION OF SENIOR DEBT SECURITIES
The following description sets for certain specific terms of the Senior Debt
Securities and provisions of the Senior Indenture. Certain general terms of the
Senior Debt Securities are described under "Description of Debt Securities." The
following brief summary of certain provisions of the Senior Debt Securities and
the Senior Indenture, together with the summary description under "Description
of Debt Securities," does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all of the provisions of
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the Senior Indenture, and is further qualified by any description contained in
the applicable Prospectus Supplement or Prospectus Supplements. The definitions
of certain terms used in the following summary are set forth below under "--
Certain Definitions in the Senior Indenture." Certain terms capitalized and not
otherwise defined herein are defined in the Senior Indenture. Wherever
particular sections or defined terms of the Senior Indenture are referred to,
such sections or defined terms are incorporated herein by reference.
REDEMPTION
The Prospectus Supplement relating to any offered Senior Debt Securities or
series thereof will specify the provisions, if any, for redemption of such
Senior Debt Securities or series thereof at the option of the Company.
Except as set forth in the Prospectus Supplement with respect to any offered
Senior Debt Securities or series thereof, the Company is not required to make
mandatory redemption or sinking fund payments with respect to the Senior Debt
Securities. The Prospectus Supplement relating to any offered Senior Debt
Securities or series thereof will specify the provisions, if any, regarding
sinking fund provisions related to such Senior Debt Securities or series
thereof. The Senior Indenture provides that the Company may deliver Outstanding
Senior Debt Securities of like tenor of a series (other than any previously
called for redemption) and may apply as a credit Senior Debt Securities of like
tenor of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Senior Debt Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such Senior
Debt Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Senior Debt Securities of like tenor of such
series required to be made pursuant to the terms of such Securities as provided
for by the terms of such series. (Senior Indenture Sections 1102 and 1103)
The Senior Indenture provides that, if less than all of the Senior Debt
Securities of any series are to be redeemed at any time, selection of Senior
Debt Securities for redemption will be made by the Trustee on a pro rata basis
(and in such manner as complies with applicable legal and stock exchange
requirements, if any), or by such other method as the Trustee shall deem fair
and appropriate, and portions of the Senior Debt Securities selected for
redemption shall be in amounts of $1,000 or whole multiples thereof, except that
if all of the Senior Debt Securities of a holder are to be redeemed, the entire
outstanding amount shall be redeemed. Notices of redemption shall be mailed by
first class mail at least 30 but not more than 60 days before the redemption
date to each Holder of Senior Debt Securities to be redeemed at its registered
address. If any Senior Debt Security is to be redeemed in part only, the notice
of redemption that relates to such Senior Debt Security shall state the portion
of the principal amount thereof to be redeemed. A new Senior Debt Security in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Senior Debt
Security. On and after the redemption date, interest ceases to accrue on Senior
Debt Securities or portions of them called for redemption. (Senior Indenture
Sections 403 and 404)
REPURCHASE AT THE OPTION OF HOLDERS
Except as set forth in the Prospectus Supplement with respect to any offered
Senior Debt Securities or any series thereof, the Senior Indenture does not
contain provisions that permit the Holders of the Senior Debt Securities to
require that the Company repurchase or redeem the Senior Debt Securities in the
event of a sale of assets or a takeover, recapitalization or similar
restructuring, nor does the Senior Indenture contain covenants specifically
designed to protect holders in the event of a highly leveraged transaction
involving the Company. The Senior Indenture provides that, if repurchase rights
are provided for in a Prospectus Supplement and amounts deposited in connection
with all such repurchase rights are insufficient to pay the repurchase price of
all Senior Debt Securities having such repurchase rights, the Trustee shall
select Senior Debt Securities to be repurchased on a pro rata basis among all
holders of such series of Senior Debt Securities having such repurchase rights
and exercising the option to elect repurchase. (Senior Indenture Sections 1201
and 1204)
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CERTAIN COVENANTS IN THE SENIOR INDENTURE
MERGER, CONSOLIDATION, OR SALE OF ASSETS. The Senior Indenture provides
that the Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another Person unless (i) the Company is
the surviving Person or the Person formed by or surviving any such consolidation
or merger (if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States, any state
thereof or the District of Columbia; (ii) the Person formed by or surviving any
such consolidation or merger (if other than the Company) or the Person to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made assumes all the obligations of the Company under the Senior Debt
Securities and the Senior Indenture pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; (iv) the Company or the
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made, will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction; and (v) the
applicable rating agencies shall have reaffirmed or raised their ratings with
respect to certain asset-back securities that have been rated in whole or in
part on the basis of the Company's credit. (Senior Indenture Section 601)
REPORTS. The Senior Indenture provides that, whether or not required by the
rules and regulations of the Commission, so long as any Senior Debt Securities
are outstanding, the Company will file with the Trustee and furnish to the
holders of Senior Debt Securities (i) all quarterly and annual financial reports
on Forms 10-Q and 10-K and all proxy statements that the Company is required to
file, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and including, with respect to the annual information
only, a report by the Company's certified independent accountants, and (ii) all
current reports that the Company is required to file with the Commission on Form
8-K. In addition, if the Company is not subject to Section 13 or 15(d) of the
Exchange Act, the Senior Indenture provides that the Company will nevertheless
continue to file a copy of all such information and reports with the Commission
and the Trustee and make such information available to securities analysts and
prospective investors upon request. (Senior Indenture Section 504)
EVENTS OF DEFAULT UNDER THE SENIOR INDENTURE
The Senior Indenture provides that each of the following constitutes an
Event of Default with respect to the Senior Debt Securities of any series issued
pursuant to the Senior Indenture: (i) default for 30 days in the payment when
due of interest on the Senior Debt Securities of that series; (ii) default in
payment when due of the principal of or premium, if any, on the Senior Debt
Securities of that series; (iii) failure to deposit any sinking fund payment,
when and as due, in respect of the Senior Debt Securities of that series; (iv)
failure by the Company to comply with the provisions described under the caption
"Merger, Consolidation or Sale of Assets;" (v) failure by the Company for 60
days after notice from the Trustee or holders of at least 25% of the principal
amount of the Senior Debt Securities of that series to comply with any of its
other agreements in the Senior Indenture or the Senior Debt Securities of that
series; (vi) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness (as defined in the Senior Indenture) for money borrowed by the
Company or any of its Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of the Senior Indenture, which default (a)
is caused by a failure to pay principal of or premium, if any, or interest on
such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $5.0
million or more; (vii) failure by the Company or any of its Subsidiaries to pay
final judgments aggregating in excess of $5.0 million, which judgments are not
paid, discharged or stayed for a
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period of 60 days; (viii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Subsidiaries and (ix) any other Event of
Default provided with respect to the Senior Debt Securities of that series.
(Senior Indenture Section 701)
If any Event of Default occurs and is continuing with respect to any series
of Senior Debt Securities, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Senior Debt Securities of
such series may declare the unpaid principal amount (or, if any of the Senior
Debt Securities of that series are Original Issue Discount Senior Debt
Securities, such lesser portion of the principal amount of such Senior Debt
Securities as may be specified in the terms thereof), premium, if any, and any
accrued and unpaid interest on all the Senior Debt Securities of such series to
be due and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, with
respect to the Company or any Subsidiary of the Company, all principal, premium,
if any, and interest on outstanding Senior Debt Securities will become due and
payable without further action or notice. Holders of the Senior Debt Securities
may not enforce the Senior Indenture or the Senior Debt Securities except as
provided in the Senior Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Senior Debt Securities of
any series may direct the Trustee in its exercise of any trust or power with
respect to such series of Senior Debt Securities. The Trustee may withhold from
Holders of the Senior Debt Securities of any series notice of any continuing
Default or Event of Default (except a Default or Event of Default in payment on
any Senior Debt Security or any series or in the payment of any sinking fund
installment with respect to such series) if it determines that withholding
notice is in their interest. (Senior Indenture Sections 702, 705, 706 and 805)
In the case of any Event of Default with respect to the Senior Debt
Securities of any series occurring by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Company or any of its Subsidiaries
the primary purpose of which was avoiding payment of the premium, if any, that
the Company would have had to pay with respect to such series if the Company
then had elected to redeem such Senior Debt Securities pursuant to the optional
redemption provisions, if any, established in accordance with the Senior
Indenture, if any, an equivalent premium shall also become and be immediately
due and payable if such Senior Debt Securities were repaid to the extent
permitted by law. (Senior Indenture Section 701)
The Holders of a majority in aggregate principal amount of the Senior Debt
Securities of any series then outstanding by notice to the Trustee may on behalf
of the Holders of all of the Senior Debt Securities of such series waive any
existing Default or Event of Default with respect to such series of Senior Debt
Securities and its consequences under the Senior Indenture except a continuing
Default or Event of Default with respect to such series in the payment of
interest on, or the principal of, or premium, if any, on the Senior Debt
Securities of such series. (Senior Indenture Section 704)
The Holders of a majority in principal amount of the outstanding Senior Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee, subject to certain exceptions. (Senior Indenture Section 705) The
Senior Indenture provides that in case an Event of Default shall occur and be
continuing, the Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent person in the conduct of his or her own affairs.
Subject to such provisions, the Trustee will be under no obligation to exercise
any of its rights or powers under the Senior Indenture unless the Trustee
receives indemnity satisfactory to it against any loss, liability or expense.
(Senior Indenture Section 801)
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Senior Indenture, and the Company is required upon
becoming aware of any Default or Event of Default with respect to a series of
Senior Debt Securities, or any event of default under any other mortgage,
indenture or instrument to deliver to the Trustee a statement specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto. (Senior Indenture Section 505)
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DEFEASANCE PROVISIONS IN THE SENIOR INDENTURE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Senior Debt Securities of
any series issued pursuant to the Senior Indenture ("Legal Defeasance"), except
for (i) the rights of Holders of outstanding Senior Debt Securities of that
series to receive payments in respect of the principal of, premium, if any, and
interest on the Senior Debt Securities of that series when such payments are due
from the trust referred to below, (ii) the Company's obligations with respect to
the Senior Debt Securities concerning issuing temporary Senior Debt Securities,
registration of Senior Debt Securities, mutilated, destroyed, lost or stolen
Senior Debt Securities and the maintenance of an office or agency for payment
and money for security payments held in trust, (iii) the rights, powers, trusts,
duties and immunities of the Trustee, and the Company's obligations in
connection therewith and (iv) the Legal Defeasance provisions of the Senior
Indenture. In addition, the Company may, at its option and at any time, elect to
have the obligations of the Company released with respect to certain covenants
that are described in the Senior Indenture ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Senior Debt Securities of such
series. In addition, after the Company's election to exercise its option
regarding Covenant Defeasance occurs, certain events (not including non-payment,
bankruptcy, receivership, rehabilitation and insolvency events) described under
"Events of Default" will no longer constitute an Event of Default with respect
to the Senior Debt Securities of such series. (Senior Indenture Sections 902 and
903)
In order to exercise either Legal Defeasance or Covenant Defeasance with
respect to any series of Senior Debt Securities issued pursuant to the Senior
Indenture, (i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Senior Debt Securities of such series,
cash in U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay (A) the principal of,
premium, if any, and interest on the outstanding Senior Debt Securities of such
series on the stated maturity or on the applicable redemption date, as the case
may be, or (B) any mandatory sinking fund payments or analogous payments
applicable to the Senior Debt Securities of such series on the day on which such
payments are due and payable; (ii) in the case of Legal Defeasance, the Company
shall have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of the Senior Indenture, there has been a change in
the applicable federal income tax law, in either case to the effect that, and
based thereon such opinion of counsel shall confirm that, the Holders of the
outstanding Senior Debt Securities of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the
Company shall have delivered to the Trustee an opinion of counsel in the United
States confirming that the Holders of the outstanding Senior Debt Securities of
such series will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax in the same amount, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred; (iv) no Default
or Event of Default with respect to such series shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period ending
on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a default
under the Senior Indenture or any material agreement or instrument to which the
Company is a party or by which the Company is bound; (vi) the Company must have
delivered to the Trustee an opinion of counsel to the effect that after the 91st
day following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; (vii) the Company must deliver to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Senior Debt Securities of such series
over the other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of
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the Company or others; and (viii) the Company must deliver to the Trustee an
Officers' Certificate and an opinion of counsel, each stating that all
conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance have been complied with. (Senior Indenture Section 904)
MODIFICATION AND WAIVER
Modifications and amendments of the Senior Indenture may be made by the
Company and the Trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the outstanding Senior Debt Securities
of all series affected by such modification or amendment (voting as one class);
provided, however, that no such modification or amendment may, without the
consent of the holder of each outstanding Senior Debt Security affected thereby:
(i) change the stated maturity of the principal of, or any installment of
principal of or interest on, any Senior Debt Security, reduce the principal
amount of, or premium or interest on, any Senior Debt Security, reduce the
amount of principal of an Original Issue Discount Senior Debt Security due and
payable upon acceleration of the maturity thereof, change the place of payment
where or coin or currency in which the principal of, or any premium or interest
on, any Debt Security is payable, or impair the right to institute suit for the
enforcement of any payment on or after the stated maturity of any Senior Debt
Security; or (ii) reduce the percentage in principal amount of outstanding
Senior Debt Securities of any series, the consent of the holders of which is
required for modification or amendment of the Senior Indenture or for waiver of
compliance with certain provisions of the Senior Indenture or for waiver of
certain defaults; or (iii) modify any of the various sections relating to above-
described provisions. (Senior Indenture Section 1002)
The holders of not less than a majority in aggregate principal amount of the
outstanding Senior Debt Securities of each series may waive any past Default or
Event of Default under the Senior Indenture with respect to Senior Debt
Securities of that series, except a continuing Default or Event of Default under
the Senior Indenture (i) in the payment of principal of, or any premium or
interest on, any Senior Debt Security of such series held by a nonconsenting
holder, or (ii) in respect of a covenant or provision of the Senior Indenture
which cannot be modified or amended without the consent of the holder of each
outstanding Senior Debt Security of such series affected, as described above.
(Senior Indenture Sections 704 and 1002)
The Senior Indenture provides that, in determining whether the holders of
the requisite principal amount of the "outstanding" Senior Debt Securities have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Senior Debt
Securities, (i) the principal amount of an Original Issue Discount Senior Debt
Security that will be deemed to be outstanding will be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon acceleration of the maturity thereof to such date, and (ii)
the principal amount of a Senior Debt Security denominated in a foreign currency
or currency unit that will be deemed to be outstanding will be the United States
dollar equivalent, determined as of the date of original issuance of such Senior
Debt Security, of the principal amount of such Senior Debt Security (or, in the
case of an Original Issue Discount Senior Debt Security, the United States
dollar equivalent, determined as of the date of original issuance of such Senior
Debt Security, of the amount determined as provided in (i) above). (Senior
Indenture Section 101)
CERTAIN DEFINITIONS IN THE SENIOR INDENTURE
Set forth below are certain defined terms used in the Senior Indenture.
Reference is made to the Senior Indenture for a full disclosure of all such
terms, as well as any other capitalized terms used herein for which no
definition is provided. (Senior Indenture Section 101)
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Subsidiaries as of such
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date plus (ii) the respective amounts reported on such Person's balance sheet as
of such date with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only to the
extent of any cash received by such Person upon issuance of such preferred
stock, plus (iii) with respect to the Company, without duplication, the
respective amounts reported on the Company's balance sheet as of such date with
respect to the Company's 8% Preferred Stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of the Senior Indenture in the book
value of any asset owned by such Person or a consolidated Subsidiary of such
Person, and (y) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"DEFAULT" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Senior Debt Securities mature.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"GOVERNMENT SECURITIES" means securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof.
"ORIGINAL ISSUE DISCOUNT SENIOR DEBT SECURITY" means any Senior Debt
Security which provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the maturity thereof
pursuant to the terms of the Senior Indenture.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof), with certain
exceptions.
DESCRIPTION OF SUBORDINATED DEBT SECURITIES
The following description sets forth certain specific terms of the
Subordinated Debt Securities and provisions of the Subordinated Indenture.
Certain general terms of the Subordinated Debt Securities are described under
"Description of Debt Securities." The following brief summary of certain
provisions of the Subordinated Debt Securities and the Subordinated Indenture,
together with the summary description under "Description of Debt Securities,"
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all of the provisions of the Subordinated Indenture,
and is further qualified by any description contained in the applicable
Prospectus Supplement or Prospectus Supplements. The definitions of certain
terms used in the following summary are set forth below under "-- Certain
Definitions in the Subordinated Indenture." Certain terms capitalized and not
otherwise defined herein are defined in the Subordinated Indenture. Wherever
particular sections or defined terms of the Subordinated Indenture are referred
to, such sections or defined terms are incorporated herein by reference.
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The Prospectus Supplement relating to any offered Subordinated Debt
Securities will specify any restrictive covenants applicable to such Securities.
Unless otherwise specified in the applicable Prospectus Supplement, the
Subordinated Debt Securities do not impose any financial or leverage
restrictions on the Company and will not contain provisions that permit the
holders of such Securities to require that the Company repurchase or redeem such
Securities in the event of a takeover, recapitalization or similar
restructuring, nor will the Subordinated Debt Securities contain covenants
specifically designed to protect holders in the event of a highly leveraged
transaction involving the Company.
EVENTS OF DEFAULT UNDER THE SUBORDINATED INDENTURE
The following events are defined in the Subordinated Indenture as "Events of
Default" with respect to the Subordinated Debt Securities of any series issued
pursuant to the Subordinated Indenture: (i) failure to pay any interest on any
Subordinated Debt Security of that series when due and payable, continued for 30
days; (ii) failure to pay principal of or any premium on any Subordinated Debt
Security of that series when due and payable; (iii) failure to deposit any
sinking fund payment, when and as due, in respect of any Subordinated Debt
Security of that series; (iv) failure to perform, or breach of, any other
covenant or warranty of the Company in the Subordinated Indenture or the
Subordinated Debt Securities of such series (other than a covenant or warranty a
default in the performance or breach of which is dealt with elsewhere in the
Subordinated Indenture or which is included in the Subordinated Indenture solely
for the benefit of a series of Subordinated Debt Securities other than that
series), continued for 60 days after written notice as provided in the
Subordinated Indenture; (v) the occurrence and continuation of an event of
default under any indenture or instrument under which the Company or any
Subsidiary shall have outstanding at least $5.0 million aggregate principal
amount of Indebtedness (as defined in the Subordinated Indenture)(other than as
part of a Securitization Transaction), the maturity of which has been
accelerated and such acceleration has not been rescinded or annulled within 60
days; (vi) certain events in bankruptcy, insolvency or reorganization involving
the Company; (vii) the entry against the Company or any Subsidiary of a final
judgment, judicial decree or order for the payment of money in excess of $5.0
million which remains unpaid, unvacated, unbounded or unstayed for a period of
60 days; or (viii) any other event of default provided with respect to
Subordinated Debt Securities of that series. (Subordinated Indenture Section
501)
If an Event of Default with respect to any series of outstanding
Subordinated Debt Securities under the Subordinated Indenture occurs and is
continuing, then either the Trustee or the holders of at least 25% in aggregate
principal amount of the outstanding Subordinated Debt Securities of that series
by notice as provided in the Subordinated Indenture may declare the principal
amount (or, if any of the Subordinated Debt Securities of that series are
Original Issue Discount Subordinated Debt Securities, such lesser portion of the
principal amount of such Subordinated Debt Securities as may be specified in the
terms thereof) of all of the Subordinated Debt Securities of that series to be
due and payable immediately; provided that in the case of certain events of
bankruptcy, insolvency or reorganization involving the Company, the principal
amount of such Subordinated Debt Securities (or specified portion thereof) shall
become due and payable immediately, without such notice. At any time after a
declaration of acceleration with respect to Subordinated Debt Securities of any
series has been made, but before a judgment or decree for payment of money has
been obtained by the Trustee, the holders of a majority in aggregate principal
amount of the outstanding Subordinated Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration. (Subordinated
Indenture Section 502)
The Subordinated Indenture provides that, subject to the duty of the Trustee
during default to act with the required standard of care, the Trustee will be
under no obligation to exercise any of its rights or powers under the
Subordinated Indenture at the request or direction of any of the holders of
Subordinated Debt Securities, unless such holders shall have offered to the
Trustee reasonable security or indemnity. (Subordinated Indenture Sections 601
and 603) Subject to such provisions for the indemnification of the Trustee and
to certain other limitations, the holders of a majority in aggregate principal
amount of the outstanding Subordinated Debt Securities of any series will 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 Subordinated Debt Securities of that series.
(Subordinated Indenture Section 512)
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The Company is required to furnish to the Trustee annually a statement as to
the compliance by the Company with all conditions and covenants under the
Subordinated Indenture. (Subordinated Indenture Section 703)
MODIFICATION AND WAIVER
Modifications and amendments of the Subordinated Indenture may be made by
the Company and the Trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the outstanding Subordinated Debt
Securities of each series affected by such modification or amendment; provided,
however, that no such modification or amendment may, without the consent of the
holder of each outstanding Subordinated Debt Security affected thereby: (i)
change the stated maturity of the principal of, or any installment of principal
of or interest on, any such outstanding Subordinated Debt Security, reduce the
principal amount of, or premium or interest on, any such outstanding
Subordinated Debt Security, reduce the amount of principal of an Original Issue
Discount Subordinated Debt Security due and payable upon acceleration of the
maturity thereof, change the place of payment where or coin or currency in which
the principal of, or any premium or interest on, any such outstanding
Subordinated Debt Security is payable, or impair the right to institute suit for
the enforcement of any payment on or with respect to any such outstanding
Subordinated Debt Security; or (ii) reduce the percentage in principal amount of
outstanding Subordinated Debt Securities of any series, the consent of the
holders of which is required for modification or amendment of the Subordinated
Indenture or for waiver of compliance with certain provisions of the
Subordinated Indenture or for waiver of certain defaults with respect to such
series of Subordinated Debt Securities; or (iii) modify any of the
above-described provisions or any of the provisions relating to waivers of past
defaults and defeasance of certain obligations except for certain stated
modifications. (Subordinated Indenture Section 902)
The holders of not less than a majority in aggregate principal amount of the
outstanding Subordinated Debt Securities of each series may, on behalf of the
holders of all Subordinated Debt Securities of that series, waive, insofar as
that series is concerned, compliance by the Company with certain restrictive
provisions of the Subordinated Indenture. (Subordinated Indenture Section 1006)
The holders of not less than a majority in aggregate principal amount of the
Outstanding Subordinated Debt Securities of each series may, on behalf of the
holders of all Subordinated Debt Securities of that series, waive any past
default under the Subordinated Indenture with respect to Subordinated Debt
Securities of that series, except a default (i) in the payment of principal of,
or any premium or interest on, any Subordinated Debt Security of such series
when due (other than amounts due and payable solely upon acceleration), or (ii)
in respect of a covenant or provision of the Subordinated Indenture which cannot
be modified or amended without the consent of the holder of each outstanding
Subordinated Debt Security of such series affected. (Subordinated Indenture
Section 513) The definition of "Senior Debt" in the Subordinated Indenture may
not be amended or modified in a manner adverse to the holders of then
outstanding Senior Debt without the consent of the holders of all Senior Debt
affected thereby. (Subordinated Indenture Section 908)
The Subordinated Indenture provides that, in determining whether the holders
of the requisite principal amount of the outstanding Subordinated Debt
Securities have given any request, demand, authorization, direction, notice,
consent or waiver thereunder or whether a quorum is present at a meeting of
holders of Subordinated Debt Securities, (i) the principal amount of an original
issue discount Subordinated Debt Security that will be deemed to be Outstanding
will be the amount of the principal thereof that would be due and payable as of
the date of such determination upon acceleration of the maturity thereof, and
(ii) the principal amount of a Subordinated Debt Security denominated in a
foreign currency or currency unit that will be deemed to be outstanding will be
the United States dollar equivalent, determined as of the date of original
issuance of such Subordinated Debt Security, of the principal amount of such
Subordinated Debt Security (or, in the case of an Original Issue Discount
Subordinated Debt Security, the United States dollar equivalent, determined as
of the date of original issuance of such Subordinated Debt Security, of the
amount determined as provided in (i) above). (Subordinated Indenture Section
101)
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CONSOLIDATION, MERGER AND SALE OF ASSETS
The Subordinated Indenture provides that the Company, without the consent of
the holders of any of the outstanding Subordinated Debt Securities under the
Subordinated Indenture, may consolidate or merge with or into, or convey,
transfer or lease its properties and assets substantially as an entirety to, any
Person which is a corporation, partnership or trust organized and validly
existing under the laws of any domestic jurisdiction, provided that (i) any
successor Person assumes by supplemental indenture the Company's obligations on
the Subordinated Debt Securities and under the Subordinated Indenture and (ii)
after giving effect to the transaction no event of default, and no event which,
after notice or lapse of time, would become an event of default, shall have
occurred and be continuing under the Subordinated Indenture. (Subordinated
Indenture Section 801)
DEFEASANCE PROVISIONS IN THE SUBORDINATED INDENTURE
DEFEASANCE AND DISCHARGE. The Company will be discharged from any and all
obligations in respect of the Subordinated Debt Securities of any series (except
for certain obligations to register the transfer or exchange of Subordinated
Debt Securities, to replace destroyed, stolen, lost or mutilated Subordinated
Debt Securities, to maintain paying agencies and to hold moneys for payment in
trust) on the 91st day after the date of deposit with the Trustee, in trust, of
money, U.S. Government Obligations (defined below) which through the payment of
interest and principal thereof in accordance with their terms will provide
money, or a combination thereof, in an amount sufficient to pay any installment
of principal of (and premium, if any) and interest on and any mandatory sinking
fund payments in respect of the Subordinated Debt Securities of such series on
the dates on which such payments are due and payable in accordance with the
terms of the Subordinated Indenture and such Subordinated Debt Securities. Any
such discharge is also subject to certain other conditions, including the
limitation that such discharge may only occur if there has been a change in
applicable federal law, or the Company has received from, or there has been
published by, the United States Internal Revenue Service a ruling to the effect
that such a discharge will not cause the holders of such series of Subordinated
Debt Securities to recognize income, gain or loss for federal income tax
purposes and that such holders will be subject to federal income tax on the same
amount and in the same manner and at the same times as would have been the case
had such deposit, defeasance and discharge not occurred; and that such discharge
will not cause any outstanding Subordinated Debt Securities then listed on the
New York Stock Exchange or other securities exchange to be de-listed as a result
thereof. (Subordinated Indenture Section 403) The term "U.S. Government
Obligations" is defined to mean direct obligations of the United States of
America, backed by its full faith and credit. (Subordinated Indenture Section
101)
DEFEASANCE OF CERTAIN COVENANTS. The Company may omit to comply with
certain restrictive covenants with respect to the Subordinated Debt Securities
of any series. If the Company elects not to comply with any term, provision or
condition in any such covenant, the Company must deposit with the Trustee money,
U.S. Government Obligations which through the payment of interest and principal
thereof in accordance with their terms will provide money, or a combination
thereof, in an amount sufficient to pay any installment of principal of (and
premium, if any) and interest on and any mandatory sinking fund payments in
respect of the Subordinated Debt Securities of such series on the dates on which
such payments are due and payable in accordance with the terms of the
Subordinated Indenture and such Subordinated Debt Securities. Any such covenant
defeasance is also subject to certain other conditions, including the delivery
to the Trustee of an opinion of counsel to the effect that the deposit and
related covenant defeasance will not cause the holders of the Subordinated Debt
Securities to recognize income, gain or loss for federal income tax purposes and
that such holders will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case had such
deposit and defeasance not occurred. (Subordinated Indenture Section 1005).
DEFEASANCE AND EVENTS OF DEFAULT. In the event the Company omits compliance
with certain covenants of the Subordinated Indenture and the Subordinated Debt
Securities issued pursuant thereto are declared due and payable because of the
occurrence of any event of default, although the amount of money and U.S.
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Government Obligations on deposit with the Trustee will be sufficient to pay
amounts due on the Subordinated Debt Securities at the time of their stated
maturity, it may not be sufficient to pay amounts due on the Subordinated Debt
Securities at the time of the acceleration resulting from such event of default.
In such event, the Company shall remain liable for all such payments.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be subordinate and subject in right of
payment, to the extent and in the manner set forth in the Subordinated
Indenture, to the prior payment in full of all Senior Debt. Upon any
distribution to creditors in a liquidation, dissolution, winding up,
reorganization, assignment for the benefit of creditors, marshaling of assets
and liabilities or any bankruptcy, insolvency or similar proceeding involving
the Company, the holders of Senior Debt will be entitled to receive payment in
full in cash of all Obligations (as defined in the Subordinated Indenture) due
on or to become due on or in respect of all Senior Debt, before the holders of
Subordinated Debt Securities are entitled to receive any payment or distribution
of any kind, whether in cash, property or securities, by set off or otherwise
(including any payment or distribution which may be payable or deliverable by
reason of the payment of any Junior Subordinated Debt) on account of the
principal of (and premium, if any) or interest on the Subordinated Debt
Securities or on account of any purchase, redemption or other acquisition of
Subordinated Debt Securities by the Company, any Subsidiary of the Company, the
Trustee or any Paying Agent or on account of any other obligation of the Company
in respect of any Subordinated Debt Securities (excluding (i) shares of stock or
securities of the Company or another corporation provided for by a plan of
reorganization or readjustment that are subordinated in right of payment to all
then outstanding Senior Debt to substantially the same extent as, or to a
greater extent than, the Subordinated Debt Securities are so subordinated and
(ii) payments of assets from any defeasance trust which have been on deposit for
90 consecutive days without the occurrence of blockage of payment on any such
series of Subordinated Debt Securities as described below) ("Securities
Payments"). Until the Senior Debt is paid in full, any Securities Payment to
which the holders of Subordinated Debt Securities or the Trustee for their
benefit would be entitled, will be paid or delivered by the Company or any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, directly to the holders of Senior Debt or
their representative or representatives or the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Debt may have
been issued. (Subordinated Indenture Sections 1301 and 1302) The Company may not
make any payments on the account of the Subordinated Debt Securities, or on
account of the purchase or redemption or other acquisition of the Subordinated
Debt Securities, if there has occurred and is continuing a default in the
payment of the principal of (or premium, if any) or interest on any Senior Debt
(a "Senior Payment Default"). (Subordinated Indenture Section 1303)
In the event that the Trustee receives any Securities Payment prohibited by
the subordination provisions of the Subordinated Indenture, such payment will be
held by the Trustee in trust for the benefit of, and will immediately be paid
over upon written request to, the holders of Senior Debt or their representative
or representatives, or the trustee or trustees under any applicable indenture
for application to the payment of Senior Debt. (Subordinated Indenture Section
1304) Such subordination will not prevent the occurrence of any event of default
in respect of the Subordinated Debt Securities.
By reason of such subordination, in the event of the insolvency of the
Company, holders of Senior Debt may receive more, ratably, and holders of the
Subordinated Debt Securities having a claim pursuant to such securities may
receive less, ratably, than the other creditors of the Company. There may also
be interruption of scheduled interest and principal payments resulting from
events of default on Senior Debt.
CERTAIN DEFINITIONS IN THE SUBORDINATED INDENTURE
Set forth below are certain defined terms use in the Subordinated Indenture.
Reference is made to the Subordinated Indenture for a full disclosure of all
such terms, as well as any other capitalized terms used herein for which no
definition is provided. (Subordinated Indenture Section 101)
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"JUNIOR SUBORDINATED DEBT" means the Indebtedness of the Company under its
Subordinated Extendible Notes and Subordinated Fixed-Term Notes issued pursuant
to the indenture dated as of July 1, 1994, as amended and restated as of April
28, 1995, by and between the Company and Norwest Bank Minnesota, National
Association, as Trustee.
"ORIGINAL ISSUE DISCOUNT SUBORDINATED DEBT SECURITY" means any Subordinated
Debt Security which provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to the Subordinated Indenture.
"SECURITIZATION TRANSACTION" means a public or private transfer of
installment sales contracts, loans, leases or other receivables by which the
Company directly or indirectly securitizes a pool of specified installment sales
contracts, loans, leases or other receivables.
"SENIOR DEBT" means all Indebtedness (as defined in the Subordinated
Indenture) of the Company, except Indebtedness created or evidenced by an
instrument which expressly provides that such Indebtedness is subordinated in
right of payment to any other Indebtedness of the Company. Without limiting the
generality of the foregoing, Senior Debt shall include: (i) the guarantee by the
Company of any Indebtedness of any other Person (including, without limitation,
subordinated Indebtedness of another Person), unless such guarantee is expressly
subordinated to any other Indebtedness of the Company; (ii) Indebtedness of the
Company under its 13% Senior Notes due 2000 issued pursuant to the indenture
dated as of April 28, 1995, by and between the Company and Norwest Bank
Minnesota, National Association, as Trustee; and (iii) Indebtedness of the
Company under that certain Amended and Restated Credit Agreement dated as of
August 4, 1995, by and among the Company, First Bank National Association, as
Administrative Bank, and certain other banks party thereto. Without limiting the
generality of the foregoing, Senior Debt shall not include Indebtedness of the
Company under the Subordinated Debt Securities or the Junior Subordinated Debt.
Notwithstanding anything to the contrary in the foregoing, Senior Debt shall not
include (x) any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates and (y) any Indebtedness incurred for the purchase of goods or
materials or for services obtained in the ordinary course of business (other
than with the proceeds of revolving credit borrowings permitted hereby).
"WAREHOUSE FACILITY" means a funding arrangement with one or more financial
institutions or other lenders or purchasers, either directly or through a
special purpose vehicle, exclusively to finance for a period not to exceed six
months the purchase of consumer installment sales contracts, loans, leases or
other receivables pending Securitization Transactions, including, without
limitation, so-called "pool bank" arrangements and repurchase agreements.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in the
Prospectus Supplement relating to such series of the Preferred Stock. If so
indicated in the Prospectus Supplement, the terms of any such series may differ
from the terms set forth below. 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 Certificate of Designation relating to each series of the
Preferred Stock to be filed as an exhibit to a document incorporated by
reference in this Prospectus.
GENERAL
Pursuant to the Company's articles of incorporation, as amended, the Board
of Directors of the Company has the authority, without further shareholder
action, to issue from time to time shares of preferred stock, $.01 par value
(the "Preferred Stock"), in one or more series and with such terms and at such
times and for such consideration as the Board of Directors of the Company may
determine. The authority of the Board of Directors of the Company includes the
determination or fixing of the following with respect to shares of any series
thereof: (i) the number of shares and designation or title thereof; (ii) rights
as to dividends; (iii) whether and upon what terms the shares are to be
redeemable; (iv) the rights
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of the holders upon the dissolution, or upon the distribution of assets, of the
Company; (v) whether and upon what terms the shares shall have a purchase,
retirement or sinking fund; (vi) whether and upon what terms the shares are to
be convertible; (vii) the voting rights, if any, which shall apply; and (viii)
any other preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions of such series. The
Preferred Stock will, when issued, be fully paid and nonassessable. The
Preferred Stock will have no preemptive rights to subscribe for any additional
securities which may be issued by the Company. The transfer agent and registrar
for the Preferred Stock will be specified in the applicable Prospectus
Supplement.
The Preferred Stock shall have the dividend, liquidation, redemption, voting
and conversion rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of the Preferred Stock.
Reference is made to the Prospectus Supplement relating to the particular series
of the Preferred Stock offered thereby for specific terms, including (i) the
title, stated value and liquidation preference of such Preferred Stock and the
number of shares offered; (ii) the initial public offering price at which such
Preferred Stock will be issued; (iii) the dividend rate or rates (or method of
calculation), the dividend periods, the dates on which dividends shall be
payable and whether such dividends shall be cumulative or noncumulative and, if
cumulative, the dates from which dividends shall commence to cumulate; (iv) any
redemption or sinking fund provisions; (v) any conversion provisions; and (vi)
any additional dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions.
As described under "Description of Depositary Shares" the Company may, at
its option, elect to offer depositary shares ("Depositary Shares") evidenced by
depositary receipts ("Depositary Receipts"), each representing a fractional
interest (to be specified in the Prospectus Supplement relating to the
particular series of the Preferred Stock) in a share of the particular series of
the Preferred Stock issued and deposited with a Depositary (as defined below).
DIVIDENDS
Subject to the preferential rights as to dividends of holders of any other
capital stock of the Company ranking prior to any series of the Preferred Stock,
the 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 or a duly
authorized committee thereof, out of funds legally available therefor, cash
dividends at such rates and on such dates as will be set forth in the Prospectus
Supplement relating to such series. Such rates may be fixed or variable or both.
If variable, the formula used for determining the dividend rate for each
dividend period will be set forth in the Prospectus Supplement. Dividends 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 or a duly authorized committee thereof.
Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the applicable Prospectus Supplement. If the Board
of Directors of the Company fails to declare a dividend payable on a dividend
payment date on any series of the Preferred Stock for which dividends are
noncumulative ("Noncumulative Preferred Stock"), then the holders of such series
of the Preferred Stock will have no right to receive a dividend in respect of
the dividend period ending on such dividend payment date, and the Company will
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
dates.
No full dividends will be declared or paid or set apart for payment on any
stock of the Company ranking, as to dividends, on a parity with or junior to the
Preferred Stock for any period unless full dividends on the Preferred Stock of
each series (including any accumulated dividends) have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment. When dividends are not paid in full upon any series
of Preferred Stock and any other Preferred Stock ranking on a parity as to
dividends with the Preferred Stock, all dividends declared or made upon
Preferred Stock of each series and any other Preferred Stock ranking on a parity
as to dividends with the Preferred Stock shall be declared pro rata so that the
amount of dividends declared per share on Preferred Stock of each series and
such other Preferred Stock shall in all cases bear to each other the same ratio
that accrued
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dividends per share (which, in the case of Noncumulative Preferred Stock, shall
not include any accumulation in respect of unpaid dividends for prior dividend
periods) on shares of each series of the Preferred Stock and such other
Preferred Stock bear to each other. Except as provided in the preceding
sentence, no dividend (other than dividends or distributions paid in shares of,
or options, warrants or rights to subscribe for or purchase shares of, Common
Stock or any other stock of the Company ranking junior to the Preferred Stock as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or any
other stock of the Company ranking junior to or on a parity with the Preferred
Stock as to dividends or upon liquidation, dissolution or winding up of the
Company, nor may any Common Stock or any other stock of the Company ranking
junior to or on a parity with the Preferred Stock as to dividends or
distributions of assets upon liquidation, dissolution or winding up of the
Company be redeemed, purchased or otherwise acquired for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption of
any shares of any such stock) by the Company (except by conversion into or
exchange for stock of the Company ranking junior to the Preferred Stock as to
dividends and distributions of assets upon liquidation, dissolution or winding
up of the Company) unless, in each case, the full dividends on each series of
the Preferred Stock shall have been paid or declared and set aside for payment.
No interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on any series of the Preferred Stock which may
be in arrears.
REDEMPTION AND REPURCHASE
A series of the Preferred Stock may be redeemable, in whole or in part, at
the option of the Company, may be subject to mandatory redemption pursuant to a
sinking fund or otherwise, or may be subject to repurchase by the Company at the
option of the holders, in each case upon terms, at the times and at the prices
set forth in the Prospectus Supplement relating to such series. Preferred Stock
redeemed by the Company will be restored to the status of authorized but
unissued Preferred Stock.
The Prospectus Supplement relating to a series of the Preferred Stock which
is subject to mandatory redemption will specify the number of shares of such
series of the Preferred Stock which shall be redeemed by the Company in each
year commencing after a date to be specified, at a redemption price per share to
be specified, together with an amount equal to all accrued and unpaid dividends
thereon to the date of redemption. The redemption price may be payable in cash
or other property, as specified in the Prospectus Supplement relating to such
series of the Preferred Stock. If the redemption price is payable only from the
net proceeds of the issuance of capital stock of the Company, the terms of such
series may provide that, if no such capital stock shall have been issued or to
the extent the net proceeds from any issuance are insufficient to pay in full
the aggregate redemption price then due, the applicable shares of such series of
the Preferred Stock shall automatically and mandatorily be converted into shares
of the applicable capital stock of the Company pursuant to conversion provisions
specified in the Prospectus Supplement relating to such series of the Preferred
Stock.
If fewer than all of the outstanding shares of any series of the Preferred
Stock are to be redeemed, the number of shares to be redeemed will be determined
by the Board of Directors of the Company and such shares shall be redeemed pro
rata from the holders of record of such shares in proportion to the number of
such shares held by such holders (with adjustments to avoid redemption of
fractional shares).
Notwithstanding the foregoing, if any dividends, including any accumulation,
on Preferred Stock of any series are in arrears, no Preferred Stock of such
series shall be redeemed unless all outstanding Preferred Stock of such series
are simultaneously redeemed, and the Company shall not purchase or otherwise
acquire any Preferred Stock of such series; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Stock of
such series pursuant to a purchase or exchange offer provided such offer is made
on the same terms to all holders of such series of the Preferred Stock.
Notice of redemption shall be given by mailing the same to each record
holder of the shares to be redeemed, not less than 30 nor more than 60 days
prior to the date fixed for redemption thereof, to the respective addresses of
such holders as the same shall appear on the stock books of the Company. Each
such notice shall state (i) the redemption date; (ii) the number of shares and
series of the Preferred Stock to be redeemed; (iii) the redemption price; (iv)
the place or places where certificates for such Preferred Stock are
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to be surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi) the
date upon which the holder's conversion rights as to such shares, if any, shall
terminate. If fewer than all shares of any series of the Preferred Stock held by
any holder are to be redeemed, the notice mailed to such holder shall also
specify the number of shares to be redeemed from such holder.
If notice of redemption has been given, from and after the redemption date
for the shares of the series of the Preferred Stock called for redemption
(unless default shall be made by the Company in providing money for the payment
of the redemption price of the shares so called for redemption), dividends on
the Preferred Stock so called for redemption shall cease to accrue and such
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as shareholders of the Company (except the right to receive the
redemption price) shall cease. Upon surrender in accordance with such notice of
the certificates representing any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Company shall so require
and the notice shall so state), the redemption price set forth above shall be
paid out of funds provided by the Company. If fewer than all of the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder thereof.
CONVERSION OR EXCHANGE
The Prospectus Supplement relating to a series of the Preferred Stock which
is convertible or exchangeable will state the terms on which shares of that
series are convertible into or exchangeable for shares of Common Stock, another
series of Preferred Stock or Debt Securities.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of shares of each series of the Preferred
Stock and any other Preferred Stock ranking on a parity with such series of
Preferred Stock as to the distribution of assets upon liquidation, dissolution
or winding up of the Company will be entitled to receive out of the assets of
the Company available for distribution to shareholders, before any distribution
of assets is made to holders of the Common Stock or any other class or series of
stock of the Company ranking junior to such series of the Preferred Stock as to
such distribution, liquidation distributions in the amount set forth in the
Prospectus Supplement relating to such series of the Preferred Stock plus an
amount equal to the sum of all accrued and unpaid dividends (whether or not
earned or declared) for the then current dividend period and, if such series of
the Preferred Stock is cumulative, for all dividend periods prior thereto. Such
right shall, however, be subject to the preferential rights, if any, of holders
of any capital stock of the Company ranking prior to such series of the
Preferred Stock as to the distribution of assets upon liquidation, dissolution
or winding up of the Company. Unless otherwise provided in the applicable
Prospectus Supplement, neither the sale of all or substantially all of the
property and assets of the Company, nor the merger or consolidation of the
Company into or with any other corporation nor the merger or consolidation of
any other corporation into or with the Company, shall be deemed to be a
dissolution, liquidation or winding up. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the assets of the Company
available for distribution to the holders of the Preferred Stock of any series
and any other shares of stock of the Company ranking as to any such distribution
on a parity with such series of the Preferred Stock shall be insufficient to pay
in full all amounts to which such holders are entitled, no such distribution
shall be made on account of any shares of any other series of the Preferred
Stock or other securities of the Company ranking as to any such distribution on
a parity with the Preferred Stock of such series upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall be
paid on account of the Preferred Stock of such series, ratably, in proportion to
the full distributive amounts for which holders of all such parity shares are
respectively entitled upon such dissolution, liquidation or winding up. After
payment of the full amount of the liquidation distribution to which they are
entitled, the holders of such series of the Preferred Stock will have no right
or claim to any of the remaining assets of the Company.
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VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular series of the Preferred Stock, or except as expressly required by the
Minnesota Business Corporation Act, the holders of the Preferred Stock will not
be entitled to vote. In the event the Company issues shares of a series of the
Preferred Stock, unless otherwise indicated in the Prospectus Supplement
relating to such series, each share will be entitled to one vote on matters on
which holders of such series are entitled to vote. However, as more fully
described under "Description of Depositary Shares," if the Company elects to
provide for the issuance of Depositary Shares representing fractional interests
in a share of a series of Preferred Stock, the holders of each such Depositary
Share will, in effect, be entitled through the Depositary to such fraction of a
vote, rather than a full vote. In the case of any series of Preferred Stock
having one vote per share on matters on which holders of such series are
entitled to vote, the voting power of such series, on matters on which holders
of such series and holders of any other series of Preferred Stock are entitled
to vote as a single class, will depend on the number of shares in such series,
not the aggregate stated value, liquidation preference or initial offering price
of the shares of such series of the Preferred Stock.
A series of the Preferred Stock may also have other voting rights -- for
example, upon the occurrence of certain events or relative to the taking of
certain actions. Any such special voting rights will be set forth in the
Prospectus Supplement relating to such series of Preferred Stock.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject to
and qualified in its entirety by reference to the Deposit Agreement and
Depositary Receipts relating to each series of the Preferred Stock which will be
filed or incorporated by reference as exhibits to the Registration Statement to
which this Prospectus pertains.
GENERAL
The Company may, at its option, elect to offer fractional interests in
Preferred Stock, rather than full Preferred Stock. In the event such option is
exercised, the Company will provide for the issuance by a Depositary to the
public of Depositary Receipts evidencing Depositary Shares, each of which will
represent a fractional interest (to be set forth in the Prospectus Supplement
relating to a particular series of the Preferred Stock) in a share of a
particular series of the Preferred Stock as described below.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate deposit agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name and
address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will be entitled, in proportion to the applicable
fractional interest in a Preferred Share underlying such Depositary Share, to
all the rights and preferences of the Preferred Stock underlying such Depositary
Share (including dividend, voting, redemption, conversion and liquidation
rights).
Pending the preparation of definitive Depositary Receipts, the Depositary
may, upon the written order of the Company, issue temporary Depositary Receipts
substantially identical to (and entitling the holders thereof to all the rights
pertaining to) the definitive Depositary Receipts but not in definitive form.
Definitive Depositary Receipts will be prepared thereafter without unreasonable
delay, and temporary Depositary Receipts will be exchangeable for definitive
Depositary Receipts at the Company's expense.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of the Depositary Receipts at the principal corporate trust
office of the Depositary (unless the related Depositary Shares have previously
been called for redemption), the owner of the Depositary Shares evidenced
thereby is entitled to delivery at such office, to or upon his order, of the
number of Preferred Stock and any money or other property represented by such
Depositary Shares. Partial
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Preferred Stock will not be issued. If the Depositary Receipts delivered by the
holder evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the number of whole Preferred Stock to be
withdrawn, the Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares. Holders
of Preferred Stock thus withdrawn will not thereafter be entitled to deposit
such shares under the Deposit Agreement or to receive Depositary Shares
therefor. No assurance can be given that a market will exist for the withdrawn
Preferred Stock.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock. less any taxes
required to be withheld therefrom, to the record holders of Depositary Shares
relating to such Preferred Stock in proportion to the numbers of such Depositary
Shares owned by such holders on the relevant record date. The Depositary shall
distribute only such amount, however, as can be distributed without attributing
to any holder of Depositary Shares a fraction of one cent, and any balance not
so distributed shall be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to holders of Depositary Shares.
REDEMPTION AND REPURCHASE OF DEPOSITED PREFERRED STOCK
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption at the option of the Company, the Depositary Shares will
be redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of such series of the Preferred Stock held by
the Depositary. The Depositary shall mail notice of redemption not less than 30
and not more than 60 days prior to the date fixed for redemption to the record
holders of the Depositary Shares to be so redeemed at their respective addresses
appearing in the Depositary's books. The redemption price per Depositary Share
will be equal to the applicable fraction of the redemption price per share
payable with respect to such series of the Preferred Stock. Whenever the Company
redeems Preferred Stock held by the Depositary, the Depositary will redeem as of
the same redemption date the number of Depositary Shares relating to the
Preferred Stock so redeemed. If less than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected by lot or pro
rata as may be determined by the Company.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
Depositary Shares, as such, are not subject to repurchase by the Company at
the option of the holders. Nevertheless, if the Preferred Stock represented by
Depositary Shares are subject to repurchase at the option of the holders, the
related Depositary Receipts may be surrendered by the holders thereof to the
Depositary with written instructions to the Depositary to instruct the Company
to repurchase the Preferred Stock represented by the Depositary Shares evidenced
by such Depositary Receipts at the applicable repurchase price specified in the
related Prospectus Supplement. The Company, upon receipt of such instructions
and subject to the Company having funds legally available therefor, will
repurchase the requisite whole number of such Preferred Stock from the
Depositary, who in turn will repurchase such Depositary Receipts.
Notwithstanding the foregoing, holders shall only be entitled to request the
repurchase of Depositary Shares representing one or more whole shares of the
related Preferred Stock. The repurchase price per Depositary Share will be equal
to the repurchase price and any other amounts per share payable with respect
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to the Preferred Stock multiplied by the fraction of a Preferred Share
represented by one Depositary Share. If the Depositary Shares evidenced by a
Depositary Receipt are to be repurchased in part only, one or more new
Depositary Receipts will be issued for any Depositary Shares not to be
repurchased.
VOTING OF DEPOSITED PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of Preferred Stock underlying such
Depositary Shares in accordance with such instructions, and the Company will
agree to take all action which may be deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will abstain from voting
Preferred Stock to the extent it does not receive specific instructions from the
holders of Depositary Shares relating to such Preferred Stock.
CONVERSION AND EXCHANGE OF DEPOSITED PREFERRED STOCK
If the Preferred Stock represented by Depositary Shares are exchangeable at
the option of the Company for other Securities, then, whenever the Company
exercises its option to exchange all or a portion of such Preferred Stock held
by the Depositary, the Depositary will exchange as of the same exchange date a
number of such Depositary Shares representing the Preferred Stock so exchanged,
provided the Company shall have issued and deposited with the Depositary the
Securities for which such Preferred Stock are to be exchanged. The exchange rate
per Depositary Share shall be equal to the exchange rate per Preferred Share
multiplied by the fraction of a Preferred Share represented by one Depositary
Share. If less than all of the Depositary Shares are to be exchanged, the
Depositary Shares to be exchanged will be selected by the Depositary by lot or
pro rata or other equitable method, in each case as may be determined by the
Company. If the Depositary Shares evidenced by a Depositary Receipt are to be
exchanged in part only, a new Depositary Receipt or Receipts will be issued for
any Depositary Shares not to be exchanged.
Depositary Shares, as such, are not convertible or exchangeable at the
option of the holders into other Securities or property. Nevertheless, if the
Preferred Stock represented by Depositary Shares are convertible into or
exchangeable for other Securities at the option of the holders, the related
Depositary Receipts may be surrendered by holders thereof to the Depositary with
written instructions to the Depositary to instruct the Company to cause
conversion or exchange, as the case may be, of the Preferred Stock represented
by the Depositary Shares evidenced by such Depositary Receipts into a whole
number of shares of Common Stock or Preferred Stock, a whole number of Common
Stock Warrants or Debt Securities in authorized denominations, as specified in
the related Prospectus Supplement. The Company, upon receipt of such
instructions, will cause the conversion or exchange, as the case may be, and
delivery to the holders such number of whole shares of Common Stock or Preferred
Stock, whole number of Common Stock Warrants, or principal amount of Debt
Securities in authorized denominations (and cash in lieu of any fractional
Security). The exchange or conversion rate per Depositary Share shall be equal
to the exchange or conversion rate per Preferred Share multiplied by the
fraction of a Preferred Share represented by one Depositary Share. If the
Depositary Shares evidenced by a Depositary Receipt are to be converted or
exchanged in part only, a new Depositary Receipt or Receipts will be issued for
any Depositary Shares not to be converted or exchanged.
TAXATION
Owners of Depositary Shares will be treated for federal income tax purposes
as if they were owners of the Preferred Stock represented by such Depositary
Shares and, accordingly, will be entitled to take into account for federal
income tax purposes income and deductions to which they would be entitled if
they were holders of such Preferred Stock. In addition, (i) no gain or loss will
be recognized for federal income tax purposes upon the withdrawal of Preferred
Stock in exchange for Depositary Shares as provided in the Deposit Agreement,
(ii) the tax basis of each Preferred Share to an exchanging owner of Depositary
Shares will, upon such exchange, be the same as the aggregate tax basis of the
Depositary Shares exchanged
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therefor, and (iii) the holding period for the Preferred Stock in the hands of
an exchanging owner of Depositary Shares who held such Depositary Shares as a
capital asset at the time of the exchange thereof for Preferred Stock will
include the period during which such person owned such Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the Depositary only if (i)
all outstanding Depositary Shares relating thereto have been redeemed or (ii)
there has been a final distribution in respect of the Preferred Stock of the
relevant series in connection with any liquidation, dissolution or winding up of
the Company and such distribution has been distributed to the holders of the
related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for their
accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
DESCRIPTION OF COMMON STOCK
GENERAL
As of September 30, 1996, 33,003,889 shares of Common Stock were
outstanding. An aggregate of 65,846,111 undesignated shares, $.01 par value,
remain authorized and unissued. Such shares may be issued as common shares or
may be issued as such other class (including as Preferred Stock, as described
above) or series and with such other rights and preferences as the Board of
Directors may determine. As of September 30, 1996, an aggregate of 9,369,665 of
such authorized, unissued shares have been reserved for issuance as common
shares upon the exercise of stock options, warrants or other rights granted,
including shares reserved for issuance as common shares upon conversion of the
8% Preferred Stock, all of which was converted or redeemed on or before December
2, 1996. Subject to any prior rights of any Preferred Stock
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then outstanding, holders of the Common Stock are entitled to receive such
dividends as are declared by the Board of Directors of the Company out of funds
legally available therefor. Subject to the rights, if any, of any Preferred
Stock then outstanding, all voting rights are vested in the holders of Common
Stock, each share being entitled to one vote. Subject to any prior rights of any
such Preferred Stock, in the event of liquidation, dissolution or winding up of
the Company, holders of shares of Common Stock are entitled to receive pro rata
any assets distributable to stockholders in respect of shares held by them.
Holders of shares of Common Stock do not have any preemptive right to subscribe
for any additional securities which may be issued by the Company. The
outstanding shares of Common Stock are fully paid and nonassessable. The
transfer agent and registrar for the Common Stock is Norwest Bank Minnesota,
National Association, South St. Paul, Minnesota.
SHAREHOLDER RIGHTS PLAN
Each share of Common Stock has one Preferred Stock Purchase Right ("Right")
attached. Each whole Right entitles the holder to buy one-one hundredth of a
share of the Company's Class A Preferred Stock at an initial per share price of
$90 (subject to adjustment). The Rights will only become exercisable ten days
after a person or group becomes an "Acquiring Person" by acquiring beneficial
ownership of 15% or more of the outstanding Common Stock or announcing a tender
or exchange offer for 15% or more of the Common Stock, subject to certain
exceptions. If the Rights become exercisable, a holder will generally be
entitled to acquire Common Stock having a value equal to twice the Right's
exercise price. If the Company is acquired in a merger or other business
combination transaction, or 50% or more of its assets or earning power is sold,
mortgaged or transferred, each Right will entitle its holder to purchase, at the
Right's exercise price, that number of shares of the acquiring company's common
stock having a then current market value of twice the Right's exercise price.
At the time after the Rights become exercisable, the Board of Directors may
exchange the Rights, in whole or in part, at an exchange ratio of one share of
Common Stock per Right, subject to adjustment. In addition, after the
acquisition by an "Acquiring Person" of 15% or more of the outstanding Common
Stock but prior to the tenth day following the acquisition, the Board of
Directors will be entitled to redeem the Rights, upon approval of a majority of
the "Continuing Directors" of the Company, at $.01 per Right. The Rights will
expire at the close of business on October 28, 2006 if not previously redeemed
or exercised.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of the Company, including without limitation, the right to vote
or to receive dividends. The Rights have certain anti-takover effects. The
Rights will cause substantial dilution to a person or group that attempts to
acquire the Company unless the offer is conditional on a substantial number of
Rights being acquired. The Rights, however, should not affect any prospective
offeror willing to make an offer at an equitable price and which is otherwise in
the best interests of the Company and its shareholders, as determined by the
Board of Directors. The Rights should not interfere with any merger or other
business combination approved by the Board of Directors since the Board of
Directors may, at its option, redeem the Rights at any time prior to the tenth
day following an "Acquiring Person's" acquisition of 15% or more of the
outstanding Common Stock.
The foregoing summary of certain terms of the Rights is qualified in its
entirety by reference to the Rights Agreement, a copy of which is incorporated
by reference as an exhibit to the Registration Statement.
MINNESOTA ANTI-TAKEOVER LAWS
The Company is governed by the provisions of Sections 302A.671 and 302A.673
of the Minnesota Business Corporation Act, which provisions may operate to
discourage a negotiated acquisition or unsolicited takeover of the Company and
thereby deprive the then current shareholders of the ability to sell their
shares at a premium over the market price. In general, Section 302A.671 provides
that the shares of a corporation acquired in a "control share acquisition" have
no voting rights unless voting rights are approved in a prescribed manner. A
"control share acquisition" is an acquisition, directly or indirectly, of
beneficial ownership of shares that would, when added to all other shares
beneficially owned by the acquiring person, entitle the acquiring person to have
voting power of 20% or more in the election of directors. In general, Section
302A.673 prohibits a public Minnesota corporation from engaging in a "business
combination" with an "interested shareholder" for a period of four years after
the date of the transaction in which the person
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became an interested shareholder, unless the business combination is approved in
a prescribed manner. "Business combination" includes mergers, asset sales and
other transactions resulting in a financial benefit to the interested
shareholder. An "interested shareholder" is a person who is the beneficial
owner, directly or indirectly, of 10% or more of the corporation's voting stock
or who is an affiliate or associate of the corporation and at any time within
four years prior to the date in question was the beneficial owner, directly or
indirectly, of 10% or more of the corporation's voting stock.
In the event of certain tender offers for stock of the Company, Section
302A.675 of the Minnesota Business Corporation Act precludes the tender offeror
from acquiring additional shares of stock (including acquisitions pursuant to
mergers, consolidations or statutory share exchanges) within two years following
the completion of such an offer unless the selling shareholders are given the
opportunity to sell the shares on terms that are substantially equivalent to
those contained in the earlier tender offer. The section does not apply if a
committee of the Board consisting of all of its disinterested directors
(excluding present and former officers of the corporation) approves the
subsequent acquisition before shares are acquired pursuant to the earlier tender
offer.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock or Common Shares. Securities Warrants may be issued
independently or together with other Securities offered by any Prospectus
Supplement and may be attached to or separate from such other Securities. Each
series of Securities Warrants will be issued under a separate warrant agreement
(a "Securities Warrant Agreement") to be entered into between the Company and a
bank or trust company, as Securities Warrant Agent, all as set forth in the
Prospectus Supplement relating to the particular issue of offered Securities
Warrants. The Securities Warrant Agent will act solely as an agent of the
Company in connection with the Securities Warrant Certificates and will not
assume any obligation or relationship of agency or trust for or with any holders
of Securities Warrant Certificates or beneficial owners of Securities Warrants.
Copies of the forms of Securities Warrant Agreements, including the forms of
Securities Warrant Certificates representing the Securities Warrants, will be
filed or incorporated by reference as exhibits to the Registration Statement to
which this Prospectus pertains. The following summaries of certain provisions of
the forms of Securities Warrant Agreements and Securities Warrant Certificates
do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Securities Warrant
Agreements and the Securities Warrant Certificates.
GENERAL
If Securities Warrants are offered, the applicable Prospectus Supplement
will describe the terms of such Securities Warrants, including, in the case of
Securities Warrants for the purchase of Debt Securities, the following where
applicable: (i) the offering price; (ii) the Currencies in which such Securities
Warrants are being offered; (iii) the designation, aggregate principal amount,
Currencies, denominations and terms of the series of Debt Securities purchasable
upon exercise of such Securities Warrants; (iv) the designation and terms of any
series of Securities with which such Securities Warrants are being offered and
the number of such Securities Warrants being offered with each such Security;
(v) the date on and after which such Securities Warrants and the related series
of Securities will be transferable separately; (vi) the principal amount of the
series of Debt Securities purchasable upon exercise of each such Securities
Warrant and the price at which and Currencies in which such principal amount of
Debt Securities of such series may be purchased upon such exercise; (vii) the
date on which the right to exercise such Securities Warrants shall commence and
the date (the "Expiration Date") on which such right shall expire; (viii)
whether the Securities Warrants will be issued in registered or bearer form;
(ix) a discussion of any material United States federal income tax consequences;
and (x) any other terms of such Securities Warrants.
In the case of Securities Warrants for the purchase of Preferred Stock or
Common Stock, the applicable Prospectus Supplement will describe the terms of
such Securities Warrants, including the following where applicable: (i) the
offering price; (ii) the aggregate number of shares purchasable upon exercise of
such Securities Warrants and, in the case of Securities Warrants for Preferred
Stock, the designation, aggregate
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number and terms of the series of Preferred Stock purchasable upon exercise of
such Securities Warrants; (iii) the designation and terms of the series of
Securities with which such Securities Warrants are being offered and the number
of such Securities Warrants being offered with each such Security; (iv) the date
on and after which such Securities Warrants and the related series of Securities
will be transferable separately; (v) the number of Preferred Stock or shares of
Common Stock purchasable upon exercise of each such Securities Warrant and the
price at which such number of Preferred Stock or shares of Common Stock may be
purchased upon each exercise; (vi) the date on which the right to exercise such
Securities Warrants shall commence and the expiration date thereof; (vii) a
discussion of any material United States federal income tax consequences; and
(viii) any other terms of such Securities Warrants. Securities Warrants for the
purchase of Preferred Stock or Common Stock will be offered and exercisable for
U.S. dollars only and will be in registered form only.
Securities Warrant Certificates may be exchanged for new Securities Warrant
Certificates of different denominations, may (if in registered form) be
presented for registration of transfer and may be exercised at the corporate
trust office of the Securities Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrant to purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal of, premium,
if any, or interest, if any, on the Debt Securities purchasable upon such
exercise or to enforce covenants in the applicable indenture. Prior to the
exercise of any Securities Warrants to purchase Preferred Stock or Common Stock,
holders of such Securities Warrants will not have any rights of holders of the
Preferred Stock or Common Stock purchasable upon such exercise, including the
right to receive payments of dividends, if any, on the Preferred Stock,
Depositary Shares or Common Stock purchasable upon such exercise or to exercise
any applicable right to vote.
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or number of Preferred Stock or shares of
Common Stock, as the case may be, at such exercise price as shall in each case
be set forth in, or calculable from, the Prospectus Supplement relating to the
offered Securities Warrants. After the close of business on the Expiration Date
(or such later date to which such Expiration Date may be extended by the
Company), unexercised Securities Warrants will become void.
Securities Warrants may be exercised by delivering to the Securities Warrant
Agent payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities, Preferred Stock or Common Stock, as
the case may be, purchasable upon such exercise together with certain
information set forth on the reverse side of the Securities Warrant Certificate.
Securities Warrants will be deemed to have been exercised upon receipt of
payment of the exercise price, subject to the receipt of the Securities Warrant
Certificate evidencing such Securities Warrants. Upon receipt of such payment
and the Securities Warrant Certificate properly completed and duly executed at
the corporate trust office of the Securities Warrant Agent or any other office
indicated in the applicable Prospectus Supplement, the Company will, as soon as
practicable, issue and deliver the Debt Securities, Preferred Stock or Common
Stock, as the case may be, purchasable upon exercise. If fewer than all of the
Securities Warrants represented by such Securities Warrant Certificate are
exercised, a new Securities Warrant Certificate will be issued for the remaining
amount of Securities Warrants.
AMENDMENTS AND SUPPLEMENTS TO SECURITIES WARRANT AGREEMENTS
The Securities Warrant Agreements may be amended or supplemented without the
consent of the holders of the Securities Warrants issued thereunder to effect
changes that are not inconsistent with the provisions of the Securities Warrants
and that do not adversely affect the interests of the holders of the Securities
Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
The exercise price of, and the number of shares of Common Stock covered by,
a Common Stock Warrant are subject to adjustment in certain events, including
(i) the issuance of capital stock as a dividend or distribution on the Common
Stock; (ii) subdivisions and combinations of the Common Stock; (iii) the
36
<PAGE>
issuance to all holders of Common Stock of certain rights or warrants entitling
them to subscribe for or purchase Common Stock within 45 days after the date
fixed for the determination of the stockholders entitled to receive such rights
or warrants, at less than the current market price (as defined in the Warrant
Agreement for such series of Common Stock Warrants); (iv) the distribution to
all holders of Common Stock of evidences of indebtedness or assets of the
Company (excluding certain cash dividends and distributions described below) or
rights or warrants (excluding those referred to above). In the event that the
Company shall distribute any rights or warrants to acquire capital stock
pursuant to clause (iv) above (the "Capital Stock Rights"), pursuant to which
separate certificates representing such Capital Stock Rights will be distributed
subsequent to the initial distribution of such Capital Stock Rights (whether or
not such distribution shall have occurred prior to the date of the issuance of a
series of Common Stock Warrants), such subsequent distribution shall be deemed
to be the distribution of such Capital Stock Rights; provided that the Company
may, in lieu of making any adjustment in the exercise price of and the number of
shares of Common Stock covered by a Common Stock Warrant upon a distribution of
separate certificates representing such Capital Stock Rights, make proper
provision so that each holder of such a Common Stock Warrant who exercises such
Common Stock Warrant (or any portion thereof) (a) before the record date for
such distribution of separate certificates shall be entitled to receive upon
such exercise shares of Common Stock issued with Capital Stock Rights and (b)
after such record date and prior to the expiration, redemption or termination of
such Capital Stock Rights shall be entitled to receive upon such exercise, in
addition to the shares of Common Stock issuable upon such exercise, the same
number of such Capital Stock Rights as would a holder of the number of shares of
Common Stock that such Common Stock Warrant so exercised would have entitled the
holder thereof to acquire in accordance with the terms and provisions applicable
to the Capital Stock Rights if such Common Stock Warrant was exercised
immediately prior to the record date for such distribution. Common Stock owned
by or held for the account of the Company or any majority owned subsidiary shall
not be deemed outstanding for the purpose of any adjustment.
No adjustment in the exercise price of and the number of shares of Common
Stock covered by a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of at
least 1% in the exercise price then in effect; provided that any such adjustment
not so made will be carried forward and taken into account in any subsequent
adjustment; and provided further that any such adjustment not so made shall be
made no later than three years after the occurrence of the event requiring such
adjustment to be made or carried forward. Except as stated above, the exercise
price of and the number of shares of Common Stock covered by a Common Stock
Warrant will not be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock, or securities carrying the
right to purchase any of the foregoing.
In the case of (i) a reclassification of or change to the Common Stock,
other than changes in par value, (ii) a consolidation or merger involving the
Company, other than where the Company is the continuing corporation and
reclassification or change, as described in (i) above, is involved or (iii) a
sale or conveyance to another corporation of the property and assets of the
Company as an entirety or substantially as an entirety, the holders of the
Common Stock Warrants then outstanding will be entitled thereafter to convert
such Common Stock Warrants into the kind and amount of shares of stock and other
securities or property which they would have received upon such
reclassification, change, consolidation, merger, sale or conveyance had such
Common Stock Warrants been exercised immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance.
PLAN OF DISTRIBUTION
The Company may offer and sell the Securities in any of three ways: (i)
through agents (ii) through underwriters or dealers, or (iii) directly to one or
more purchasers. The Prospectus Supplement or Prospectus Supplements with
respect to any of the Securities offered thereby will set forth the terms of the
offering of such Securities, including the name or names of any underwriters or
agents, the purchase price of such Securities, the proceeds to the Company from
such sale, any underwriting discounts or agency fees and other
37
<PAGE>
items constituting underwriters' or agents' compensation, the initial public
offering price, any discounts or concessions allowed or reallowed or paid to
dealers, and any securities exchanges on which such Securities may be listed.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
If so indicated in the Prospectus Supplement relating to any Securities
offered thereby, the Company will authorize underwriters, dealers and agents to
solicit offers by certain specified institutions to purchase such Securities
from the Company at the public offering price set forth in such Prospectus
Supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be subject only
to those conditions set forth in such Prospectus Supplement, and such Prospectus
Supplement will set forth the commission payable for solicitation of such
contracts.
Any underwriter, dealer or agent participating in the distribution of an
offering of Securities may be deemed to be an underwriter, and any discounts or
commissions received by it on the sale or resale of Securities may be deemed to
be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contributions
with respect to payments which the underwriters or agents may be required to
make in respect thereof. Underwriters and agents, and affiliates thereof, may be
customers of, engage in transactions with, or perform services for the Company
and its affiliates in the ordinary course of business.
Unless otherwise indicated in the applicable Prospectus Supplement, all
Securities (other than the Common Stock) will be new issues of securities with
no established trading market. Any underwriters to whom Securities are sold by
the Company for public offering and sale may make a market in such 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 concerning
the liquidity of the trading market for any Securities.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Company by Dorsey
& Whitney LLP, Minneapolis, Minnesota.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-K/A-2 for the year ended December 31, 1995
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
38
<PAGE>
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR A PROSPECTUS
SUPPLEMENT OR PROSPECTUS SUPPLEMENTS IN CONNECTION WITH THE OFFERING DESCRIBED
HEREIN AND THEREIN, AND ANY INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN
OR THEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS
MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT OR PROSPECTUS SUPPLEMENTS. THE DELIVERY OF THIS PROSPECTUS
AND A PROSPECTUS SUPPLEMENT OR PROSPECTUS SUPPLEMENTS RELATING TO PARTICULAR
SECURITIES SHALL NOT CONSTITUTE AN OFFER OF ANY OF THE OTHER SECURITIES COVERED
BY THIS PROSPECTUS. THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
OR PROSPECTUS SUPPLEMENTS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY THE SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION OF AN OFFER TO BUY THE SECURITIES IS UNLAWFUL.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
The Company.................................... 3
Risk Factors................................... 5
Use of Proceeds................................ 11
Ratios of Earnings to Fixed Charges and to
Combined Fixed Charges and Preferred Stock
Dividends..................................... 11
Description of Debt Securities................. 11
Description of Senior Debt Securities.......... 15
Description of Subordinated Debt Securities.... 21
Description of Preferred Stock................. 26
Description of Depositary Shares............... 30
Description of Common Stock.................... 33
Description of Securities Warrants............. 35
Plan of Distribution........................... 37
Validity of Securities......................... 38
Experts........................................ 38
</TABLE>
---------------------
[LOGO]
DEBT SECURITIES, PREFERRED STOCK,
DEPOSITARY SHARES, COMMON STOCK,
SECURITIES WARRANTS AND UNITS
---------------------
PROSPECTUS
---------------------
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The table below sets forth estimated expenses in connection with the
issuance and distribution of the securities registered hereby:
<TABLE>
<S> <C>
SEC registration fee.............................................. $ 116,656
Legal fees and expenses*.......................................... 25,000
Accounting fees and expenses*..................................... 10,000
Printing expenses*................................................ 20,000
Blue Sky and legal investment fees and related expenses*.......... 3,000
Miscellaneous (including listing fees, if applicable)*............ 1,344
---------
Total......................................................... $ 176,000
---------
---------
</TABLE>
- ------------------------
* Estimated pursuant to Item 511 of Regulation S-K.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Minnesota Statutes Section 302A.521 provides that a Minnesota business
corporation shall indemnify any director, officer, employee or agent of the
corporation made or threatened to be made a party to a proceeding, by reason of
the former or present official capacity (ad defined) of the person, against
judgments, penalties, fines, settlements and reasonable expenses incurred by the
person in connection with the proceeding if certain statutory standards are met.
"Proceeding" means a threatened, pending or completed civil, criminal,
administrative, arbitration or investigative proceeding, including one by or in
the right of the corporation. Section 302A.521 contains detailed terms regarding
such right of indemnification and reference is made thereto for a complete
statement of such indemnification rights.
Article 6 of the Company's Restated Bylaws, as amended, provides that
directors, officers, employees and agents, past or present, of the Company, and
persons serving as such of another corporation or entity at the request of the
Company, shall be indemnified by the Company for such expenses and liabilities,
in such manner, under such circumstances, and to such extent as permitted under
Minnesota Statutes 302A.521.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and and is therefore unenforceable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS.
<TABLE>
<S> <C> <C>
1.1 -- Form of Underwriting Agreement.*
4.1 -- Form of Indenture relating to Senior Debt Securities.
4.2 -- Form of Indenture relating to Subordinated Debt Securities.
4.3 -- Form of Common Stock Warrant Agreement.*
4.4 -- Form of Preferred Stock Warrant Agreement.*
4.5 -- Form of Debt Securities Warrant Agreement.*
4.6 -- Form of Deposit Agreement.*
4.7 -- Rights Agreement dated as of November 1, 1996, between the Company and Norwest Bank
Minnesota, N.A. as Rights Agent (incorporated by reference to Exhibit 1 to the
Company's Registration Statement on Form 8-A filed on November 7, 1996, Commission
file no. 0-20526).
5.1 -- Opinion and consent of Dorsey & Whitney LLP regarding the legality of the
Securities.
12.1 -- Computation of Ratio of Earnings to Fixed Charges (incorporated by reference to
Exhibit 12.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996, Commission file no. 0-20526).
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C> <C>
12.2 -- Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
(incorporated by reference to Exhibit 12.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996, Commission file no. 0-20526).
23.1 -- Consent of Dorsey & Whitney LLP (included in Exhibit 5.1).
23.2 -- Consent of Ernst & Young LLP.
24 -- Power of Attorney (included on signature page to the Registration Statement).
25.1 -- Statement of Eligibility of the Trustee with respect to Senior Debt Securities on
Form T-1.*
25.2 -- Statement of Eligibility of the Trustee with respect to Subordinated Debt Securities
on Form T-1*.
</TABLE>
- ------------------------
* To be filed by amendment.
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 this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (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 provisions summarized in Item 15 above, 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
II-2
<PAGE>
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 Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this Registration Statement
in reliance on Rule 430A and contained in the 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 and (2) for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering, thereof.
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, in accordance
with the rules and regulations prescribed by the Commission under section
305(b)(2) thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Minneapolis, Minnesota on the 16th day of December
1996.
OLYMPIC FINANCIAL LTD.
By /S/ WARREN KANTOR
--------------------------------------
Warren Kantor
CHAIRMAN OF THE EXECUTIVE COMMITTEE
OF THE BOARD OF DIRECTORS
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints A. Mark Berlin and John A. Witham, or either of
them (with full power to act alone), as his true and lawful attorneys-in-fact
and agents, with full powers of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorneys-in-fact and agents, full power and authority to do and perform
each and every act and thing requisite or 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 attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------ ------------------------------------ ----------------------
<C> <S> <C>
Chairman of the Executive Committee
/S/ WARREN KANTOR of the Board of Directors and
-------------------------------------- Director December 16, 1996
Warren Kantor (Principal Executive Officer)
/S/ JOHN A. WITHAM Executive Vice President and
-------------------------------------- Chief Financial Officer December 16, 1996
John A. Witham (Principal Financial Officer)
/S/ BRIAN S. ANDERSON Vice President and Corporate
-------------------------------------- Controller (Principal Accounting December 16, 1996
Brian S. Anderson Officer)
/S/ SCOTT H. ANDERSON
-------------------------------------- Director December 16, 1996
Scott H. Anderson
/S/ JAMES L. DAVIS
-------------------------------------- Director December 16, 1996
James L. Davis
/S/ A. MARK BERLIN, JR.
-------------------------------------- Director December 16, 1996
A. Mark Berlin, Jr.
/S/ LAWRENCE H. BISTODEAU
-------------------------------------- Director December 16, 1996
Lawrence H. Bistodeau
-------------------------------------- Director
Robert J. Cresci
-------------------------------------- Director
Frederick W. Zuckerman
</TABLE>
II-4
<PAGE>
Exhibit 4.1
________________________________________________________________________________
OLYMPIC FINANCIAL LTD.
to
___________________
as Trustee
_______________
SENIOR NOTES
______________
INDENTURE
Dated as of __________, 1997
________________________________________________________________________________
<PAGE>
OLYMPIC FINANCIAL LTD.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of __________, 1997
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT Section INDENTURE SECTION
----------- -----------------
310(a)(1) ......................................... 812
(a)(2) ......................................... 812
(a)(3) ......................................... N.A.
(a)(4) ......................................... N.A.
(a)(5) ......................................... 812
(b) ......................................... 809; 812
(c) ......................................... N.A.
311(a) ......................................... 813
(b) ......................................... 813
(c) ......................................... N.A.
312(a) ......................................... 806
(b) ......................................... 109
(c) ......................................... 109
313(a) ......................................... 807
(b)(1) ......................................... N.A.
(b)(2) ......................................... 807
(c) ......................................... 807
(d) ......................................... 807
314(a) ......................................... 504
(b) ......................................... N.A.
(c)(1) ......................................... 104
(c)(2) ......................................... 104
(c)(3) ......................................... N.A.
(d) ......................................... N.A.
(e) ......................................... 104
(f) ......................................... N.A.
315(a) ......................................... 801
(b) ......................................... 805
(c) ......................................... 801
(d) ......................................... 801
(e) ......................................... 711
i
<PAGE>
316(a)(last sentence) ........................... 101
(a)(1)(A) ................................. 705
(a)(1)(B) ................................. 704
(a)(2) ................................. N.A.
(b) ................................. 707
(c) ................................. 106
317(a)(1) ................................. 708
(a)(2) ................................. 709
(b) ................................. 503
318(a) ................................. 1301
(b) ................................. N.A.
(c) ................................. 1301
N.A. means not applicable.
____________________________
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be part of the Indenture.
ii
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . . 1
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . 1
Section 102. Other Definitions . . . . . . . . . . . . . . . . . 10
Section 103. Incorporation by Reference of TIA . . . . . . . . . 10
Section 104. Compliance Certificates and Opinions. . . . . . . . 11
Section 105. Form of Documents Delivered to Trustee. . . . . . . 12
Section 106. Acts of Holders . . . . . . . . . . . . . . . . . . 12
Section 107. Notices, Etc., to Trustee and Company . . . . . . . 15
Section 108. Notice to Holders; Waiver . . . . . . . . . . . . . 15
Section 109. Communication by Holders with Other Holders. . . . 16
Section 110. Rules of Construction . . . . . . . . . . . . . . . 16
ARTICLE 2 SECURITY FORMS. . . . . . . . . . . . . . . . . . . . . . . . 16
Section 201. Forms Generally. . . . . . . . . . . . . . . . . . 16
Section 202. Form of Trustee's Certificate of Authentication. . 17
Section 203. Form of Legend for Global Securities. . . . . . . . 17
ARTICLE 3 THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 17
Section 301. Amount Unlimited; Issuable in Series. . . . . . . . 17
Section 302. Denominations. . . . . . . . . . . . . . . . . . . 21
Section 303. Execution, Authentication, Delivery and Dating. . . 21
Section 304. Temporary Securities. . . . . . . . . . . . . . . . 24
Section 305. Registration, Registration of Transfer and
Exchange. . . . . . . . . . . . . . . . . . . . . . 25
Section 306. Mutilated, Destroyed, Lost and Stolen Securities. . 26
Section 307. Payment of Interest; Interest Rights Preserved. . . 28
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . 29
Section 309. Cancellation. . . . . . . . . . . . . . . . . . . . 29
Section 310. Computation of Interest . . . . . . . . . . . . . . 30
Section 311. CUSIP Number. . . . . . . . . . . . . . . . . . . . 30
ARTICLE 4 REDEMPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . 30
Section 401. Applicability of Article. . . . . . . . . . . . . . 30
Section 402. Notices to Trustee. . . . . . . . . . . . . . . . . 31
Section 403. Selection of Securities to Be Redeemed. . . . . . . 31
Section 404. Notice of Redemption. . . . . . . . . . . . . . . . 31
Section 405. Effect of Notice of Redemption. . . . . . . . . . . 33
Section 406. Deposit of Redemption Price . . . . . . . . . . . . 33
Section 407. Securities Payable on Redemption Date . . . . . . . 33
Section 408. Securities Redeemed in Part . . . . . . . . . . . . 33
iii
<PAGE>
ARTICLE 5 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 501. Payment of Principal, Premium and Interest. . . . . 34
Section 502. Maintenance of Office or Agency . . . . . . . . . . 34
Section 503. Money for Securities Payments to Be Held in Trust . 35
Section 504. Commission Reports. . . . . . . . . . . . . . . . . 37
Section 505. Compliance Certificate. . . . . . . . . . . . . . . 37
Section 506. Taxes . . . . . . . . . . . . . . . . . . . . . . . 38
Section 507. Stay, Extension and Usury Laws. . . . . . . . . . . 39
Section 508. Corporate Existence . . . . . . . . . . . . . . . . 39
ARTICLE 6 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 601. Limitations On Mergers, Consolidations or Sales of
Assets. . . . . . . . . . . . . . . . . . . . . . . 39
Section 602. Successor Corporation Substituted . . . . . . . . . 40
ARTICLE 7 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . 40
Section 701. Events of Default . . . . . . . . . . . . . . . . . 40
Section 702. Acceleration. . . . . . . . . . . . . . . . . . . . 43
Section 703. Other Remedies. . . . . . . . . . . . . . . . . . . 43
Section 704. Waiver of Past Defaults. . . . . . . . . . . . . . 44
Section 705. Control by Majority . . . . . . . . . . . . . . . . 44
Section 706. Limitation on Suits . . . . . . . . . . . . . . . . 44
Section 707. Rights of Holders to Receive Payment. . . . . . . . 45
Section 708. Collection Suit by Trustee. . . . . . . . . . . . . 45
Section 709. Trustee May File Proofs of Claim. . . . . . . . . . 46
Section 710. Priorities. . . . . . . . . . . . . . . . . . . . . 46
Section 711. Undertaking for Costs . . . . . . . . . . . . . . . 47
ARTICLE 8 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 801. Duties of Trustee . . . . . . . . . . . . . . . . . 47
Section 802. Rights of Trustee . . . . . . . . . . . . . . . . . 48
Section 803. Individual Rights of Trustee. . . . . . . . . . . . 49
Section 804. Trustee's Disclaimer. . . . . . . . . . . . . . . . 49
Section 805. Notice of Defaults. . . . . . . . . . . . . . . . . 50
Section 806. Preservation of Information . . . . . . . . . . . . 50
Section 807. Reports by Trustee to Holders . . . . . . . . . . . 50
Section 808. Compensation and Indemnity. . . . . . . . . . . . . 50
Section 809. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . 51
Section 810. Acceptance of Appointment by Successor . . . . . . 53
Section 811. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . 54
Section 812. Eligibility; Disqualification. . . . . . . . . . . 55
Section 813. Preferential Collection of Claims Against Company . 55
Section 814. Appointment of Authenticating Agent. . . . . . . . 55
iv
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ARTICLE 9 DISCHARGE OF INDENTURE. . . . . . . . . . . . . . . . . . . . 57
Section 901. Defeasance and Discharge of this Indenture and the
Securities. . . . . . . . . . . . . . . . . . . . . 57
Section 902. Legal Defeasance and Discharge. . . . . . . . . . . 57
Section 903. Covenant Defeasance. . . . . . . . . . . . . . . . 58
Section 904. Conditions to Legal or Covenant Defeasance. . . . . 59
Section 905. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions . . . 61
Section 906. Repayment to Company. . . . . . . . . . . . . . . . 61
Section 907. Reinstatement . . . . . . . . . . . . . . . . . . . 62
ARTICLE 10 AMENDMENT, SUPPLEMENT AND WAIVER . . . . . . . . . . . . . . 62
Section 1002. With Consent of Holders. . . . . . . . . . . . . . 63
Section 1003. Execution of Supplemental Indentures. . . . . . . . 65
Section 1004. Effect of Supplemental Indentures . . . . . . . . . 65
Section 1005. Compliance with TIA . . . . . . . . . . . . . . . . 65
Section 1006. Revocation and Effect of Consents . . . . . . . . . 65
Section 1007. Reference in Securities to Supplemental
Indentures. . . . . . . . . . . . . . . . . . . . . 66
Section 1008. Notice of Supplemental Indentures . . . . . . . . . 66
ARTICLE 11 SINKING FUNDS. . . . . . . . . . . . . . . . . . . . . . . . 66
Section 1101. Applicability of Article. . . . . . . . . . . . . . 66
Section 1102. Satisfaction of Sinking Fund Payments with
Securities. . . . . . . . . . . . . . . . . . . . . 67
Section 1103. Redemption of Securities for Sinking Fund . . . . . 67
ARTICLE 12 REPURCHASE OF SECURITIES AT OPTION OF HOLDERS. . . . . . . . 67
Section 1201. Applicability of Article. . . . . . . . . . . . . . 67
Section 1202. Notice of Repurchase Date . . . . . . . . . . . . . 68
Section 1203. Deposit of Repurchase Price . . . . . . . . . . . . 68
Section 1204. Securities Payable on Repurchase Date . . . . . . . 69
Section 1205. Securities Repurchased in Part. . . . . . . . . . . 69
ARTICLE 13 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 70
Section 1301. TIA Controls. . . . . . . . . . . . . . . . . . . . 70
Section 1302. Rules by Trustee and Agents . . . . . . . . . . . . 70
Section 1303. Legal Holidays. . . . . . . . . . . . . . . . . . . 70
Section 1304. No Personal Liability of Directors, Officers,
Employees and Stockholders. . . . . . . . . . . . . 70
Section 1305. Duplicate Originals . . . . . . . . . . . . . . . . 71
Section 1306. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial . . . . . . . . . . . . . . . . . . . 71
Section 1307. No Adverse Interpretation of Other Agreements . . . 72
Section 1308. Successors. . . . . . . . . . . . . . . . . . . . . 72
Section 1309. Severability. . . . . . . . . . . . . . . . . . . . 73
v
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Section 1310. Counterpart Originals . . . . . . . . . . . . . . . 73
Section 1311. Table of Contents, Headings, etc. . . . . . . . . . 73
vi
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INDENTURE, dated as of __________, 1996 between OLYMPIC FINANCIAL
LTD., a corporation duly organized and existing under the laws of the State of
Minnesota (herein called the "Company"), having its principal office at 7825
Washington Avenue South, Minneapolis, Minnesota 55439, and ___________________,
as Trustee (herein called the "Trustee"), having its principal office at
___________________.
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 notes or other
evidences of indebtedness (herein called the "Securities"), to be issued in one
or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof (including holders from time to time of the Securities of any series
held through a Holder which is a Depositary (as defined herein)), as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 101. Definitions.
"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 purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
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"AGENT" means any Authenticating Agent, Security Registrar, Paying
Agent or co-registrar.
"AUTO LOAN SECURITIZATION" means a public or private transfer of Auto
Receivables in the ordinary course of business and by which the Company directly
or indirectly securitizes a pool of specified Auto Receivables including any
such transaction involving the sale of specified Auto Receivables to a
Securitization Trust.
"AUTO RECEIVABLES" means consumer installment sale contracts and loans
evidenced by promissory notes secured by new and used automobiles and light
trucks purchased in the ordinary course of business by the Company or any
Subsidiary of the Company from motor vehicle dealers.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any duly authorized (generally or in any particular respect) committee appointed
by that board.
"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. Where any provision of this Indenture refers to action to be
taken pursuant to a Board Resolution (including establishment of any series of
the Securities and the forms and terms thereof), such action may be taken by any
committee, officer or employee of the Company authorized to take such action
(generally or in any particular respect) by a Board Resolution.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"COMMISSION" means the Securities and Exchange Commission.
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<PAGE>
"COMMON STOCK" means the common stock, par value $.01 per share, of
the Company.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument, as obligor under the Securities, unless and until
a successor replaces Olympic in accordance with Article 6 hereof and thereafter
means such successor.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President,
its Chief Executive Officer, its Chief Operating Officer, its Chief Financial
Officer, a Vice President, its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, or by any other officer of the Company authorized to
sign by Board Resolution, and delivered to the Trustee.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date, plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, plus (iii) with respect to the
Company, without duplication, the respective amounts reported on the Company's
balance sheet as of such date with respect to the Company's 8% Convertible
Preferred Stock, less (x) all write-ups (other than write-ups resulting from
foreign currency translations and write-ups of tangible assets of a going
concern business made within 12 months after the acquisition of such business)
subsequent to the date of this Indenture in the book value of any asset owned by
such Person or a consolidated Subsidiary of such Person, and (y) all unamortized
debt discount and expense and unamortized deferred charges as of such date, all
of the foregoing determined in accordance with GAAP.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which at the date of original execution of the Indenture is
______________.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEPOSITARY" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the clearing agency registered under the Exchange Act, specified for
that purpose as
3
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contemplated by Section 301 or any successor clearing agency registered under
the Exchange Act as contemplated by Section 305, and if at any time there is
more than one such Person, "Depositary" as used with respect to the
Securities of any series shall mean the Depositary with respect to the
Securities of such series.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Securities mature.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"GLOBAL SECURITY" means a Security bearing the legend specified in
Section 203 evidencing all or part of a series of Securities, issued to the
Depositary for such series or its nominee, and registered in the name of such
Depositary or nominee.
"GOVERNMENT SECURITIES" means securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"HOLDER" means a Person in whose name a Security is registered.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligation,
except any
4
<PAGE>
such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP, as well as all indebtedness of
others (except indebtedness of Securitization Trusts) secured by a Lien on
any asset of such Person (whether or not such indebtedness is assumed by such
Person) and, without duplication, all Warehouse Debt, and, to the extent not
otherwise included, the guarantee by such Person of any indebtedness of any
other Person.
"INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument due to the appointment of
one or more separate Trustees for any one or more separate series of Securities
pursuant to Section 809(e), "Indenture" shall mean, with respect to such series
of Securities for which any such Person is Trustee, 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 shall include the terms of particular series of
Securities for which such Person is Trustee established as contemplated by
Section 301, exclusive, however, of any provisions or terms which relate solely
to other series of Securities for which such Person is not Trustee, regardless
of when such terms or provisions were adopted, and exclusive of any provisions
or terms adopted by means of one or more indentures supplemental hereto executed
and delivered after such Person had become such Trustee but to which such
Person, as such Trustee, was not a party.
"INTEREST", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"INTEREST PAYMENT DATE", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
5
<PAGE>
"MATURITY", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"OFFICERS" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary,
any Assistant Secretary and any Vice President of the Company or any Subsidiary,
as the case may be.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board, the President, the Chief Executive Officer, the Chief Operating
Officer, the Chief Financial Officer, a Vice President or an Assistant Vice
President of the Company, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, any Subsidiary or the Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 702.
"OUTSTANDING", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities
6
<PAGE>
in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 702, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units that shall be
deemed to be Outstanding shall be the U.S. dollar equivalent, determined in the
manner provided as contemplated by Section 301 as of the date of original
issuance of such Security, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent, determined as of
the date of original issuance of such Security, of the amount determined as
provided in (i) above) of such Security as determined by the Company pursuant to
Section 301, and (iii) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledges is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of (and premium, if any) and/or interest on any Securities on behalf
of the Company.
"PERIODIC OFFERING" means an offering of Securities of a series from
time to time the specific terms of which Securities, including without
limitation the rate or rates of interest (or formula for determining the rate or
rates of interest), if any, thereon, the Stated Maturity or Maturities thereof
and the redemption provisions, if any, with respect thereto, are to be
determined by the Company or its agents upon the issuance of such Securities.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
7
<PAGE>
"PLACE OF PAYMENT", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and/or interest on the Securities of that series are payable.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"RATING AGENCY" means, at any time with respect to any Indebtedness of
a Securitization Trust, each nationally recognized statistical rating
organization which, at such time, has published a rating with respect to any
class of the securities issued by such Securitization Trust.
"REDEMPTION DATE", when used with respect to any Security or portion
thereof to be redeemed, means the date fixed for such redemption pursuant to
this Indenture.
"REDEMPTION PRICE", when used with respect to any Security or portion
thereof to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"REPURCHASE DATE", when used with respect to any Security or portion
thereof to be repurchased, means the date fixed for such repurchase pursuant to
this Indenture.
"REPURCHASE PRICE", when used with respect to any Security or portion
thereof to be repurchased, means the price at which it is to be repurchased
pursuant to this Indenture.
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
officer within the Corporate Trust Division of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
8
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"SECURITIES" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture; provided, however, that if at any time there is more than
one Person acting as Trustee under this Indenture, "Securities" with respect to
the Indenture as to which such Person is Trustee shall have the meaning stated
in the first recital of this Indenture and shall more particularly mean
Securities authenticated and delivered under this Indenture, exclusive, however,
of Securities of any series as to which such Person is not Trustee.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 305
"SECURITIZATION TRUST" means any Person established for the purpose of
issuing securities in connection with any Auto Loan Securitization.
"STATED MATURITY", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof), provided that a
Subsidiary of the Company or a Subsidiary of any Subsidiary of the Company shall
not include a Securitization Trust.
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect
on the date on which this Indenture is qualified under the TIA.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
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"WAREHOUSE DEBT" means, at any time, Indebtedness of the Company and
its Subsidiaries outstanding under the Warehouse Facilities, including without
limitation, the repurchase price of any Auto Receivables sold to any other
Person pursuant to the terms of any of the Warehouse Facilities.
"WAREHOUSE FACILITIES" means funding arrangements with financial
institutions or other lenders or purchasers exclusively to finance the purchase
of Auto Receivables by the Company or a Subsidiary of the Company for a period
not to exceed six months in the ordinary course of business, including so-called
"pool bank" arrangements and repurchase agreements for Auto Receivables.
Section 102. Other Definitions.
Defined in
Term Section
---- ----------
"BANKRUPTCY LAW" 701
"COVENANT DEFEASANCE" 903
"CUSTODIAN" 701
"EVENT OF DEFAULT" 701
"LEGAL DEFEASANCE" 902
"LEGAL HOLIDAY" 1303
"NOTICE OF DEFAULT" 701
"PAYMENT DEFAULT" 701
Section 103. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Securities means the Company and any successor
obligor upon the Securities.
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All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by the Commission rule
under the TIA have the meanings so assigned to them.
Section 104. 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, if so requested by the Trustee, an Officers' Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion whether such covenant or condition has been
complied with; and
(4) a statement whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Every such certificate provided under this Indenture shall be without
personal recourse to the individual executing the same and may include an
express statement to such effect.
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Section 105. 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 any 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, opinion or representations
with respect to the matters upon which such officer's 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. Any certificate or opinion of counsel may be stated to be based on the
certificates or opinions of other counsel, in which event it shall be
accompanied by a copy of such other certificates or opinions.
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. All applications, requests, certificates, statements or
other instruments given under this Indenture shall be without personal recourse
to any individual giving the same and may include an express statement to such
effect.
Section 106. Acts of Holders.
(a) 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 (including Persons who hold
their Securities through a Holder which is a Depositary) in person or by an
agent duly appointed in writing, and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "ACT" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to
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Section 801) conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
Without limiting the generality of the foregoing, a Holder, including
a Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy or proxies duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be made, given or taken by the Holders, and a Depositary that is a
Holder of a Global Security may provide its proxy or proxies to the beneficial
owners of interest in any such Global Security.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine, provided that, in any instance, the Trustee may require further proof
with respect to any matter referred to in this Section.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) The Company may fix any day as the record date for the purpose of
determining the Holders (including Persons who hold Securities through a Holder
which is a Depositary) of Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders of Securities of such series. If not set by the Company prior to the
first solicitation of a Holder of Securities of such series made by any Person
in respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 311 prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders
(including Persons who hold Securities through a Holder which is a Depositary)
of one or more series of Securities, only the Holders of Securities of such
series on such date (or their duly designated proxies) shall be entitled to give
or take, or vote on, the relevant action.
With regard to any action that may be given or taken hereunder only by
Holders (including Persons who hold their Securities through a Holder which is a
Depositary) of a requisite principal amount of outstanding Securities of any
series (or their duly appointed agents) and for which a record date is set
pursuant to this subsection (d), the Company may, at its option, set an
expiration date after which no such action purported to be given or taken by any
Holder shall be effective hereunder unless given or taken on or prior to such
expiration date by Holders (including Persons who hold Securities through a
Holder which is a Depositary) of
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the requisite principal amount of outstanding Securities of such series on
such record date (or their duly appointed agents). On or prior to any
expiration date set pursuant to this subsection (d), the Company may, on one
or more occasions at its option, extend such date to any later date. Nothing
in this subsection (d) shall prevent any Holder (or any duly appointed agent
thereof) from giving or taking, after any expiration date, any action
identical to, or, at any time, contrary to or different from any action given
or taken, or purported to have been given and taken, hereunder by a Holder on
or prior to such date, in which event the Company may set a record date in
respect hereof pursuant to this subsection (d).
Notwithstanding the foregoing, upon receipt by the Trustee, with
respect to Securities of any series, of (i) any Notice of Default pursuant to
Section 701, (ii) any declaration or acceleration, or any rescission and
annulment of any such declaration, pursuant to Section 702, or (iii) any
direction given pursuant to Section 704 (any such notice, declaration,
rescission and annulment, or direction being referred to herein as a
"DIRECTION"), a record date shall automatically and without any other action by
any Person be set for the purpose of determining the Holders (including Persons
who hold Securities through a Holder which is a Depositary) of outstanding
Securities of such series entitled to join in such Direction, which record date
shall be the close of business on the day the Trustee receives such Direction.
The Holders (including Persons who hold Securities through a Holder which is a
Depositary) of outstanding Securities of such series on such record date (or
their duly appointed agents), and only such Persons, shall be entitled to join
in such Direction, whether or not such Holders remain Holders after record date;
provided that, unless such Direction shall have become effective by virtue of
Holders (including Persons who hold Securities through a Holder which is a
Depositary) of the requisite principal amount of outstanding Securities of such
series on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such Direction shall
automatically and without any action by any Person be canceled and be of no
further effect. Nothing in this paragraph shall prevent a Holder (or duly
appointed agent thereof) from giving, before or after the expiration of such 90-
day period, a Direction contrary to or different from, or, after the expiration
of such period, identical to, a Direction that has been canceled pursuant to the
proviso to the preceding sentence, in which event a new record date in respect
thereof shall be set pursuant to this subsection (d).
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
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Section 107. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing to or with a Responsible
Officer of the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument (Attention: Treasurer) or at any other
address previously furnished in writing to the Trustee by the Company.
Section 108. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder (including Persons who hold Securities through a Holder which is a
Depositary if the name and address of such beneficial holder has been
provided in writing to the Person required to give such notice prior to the
date such notice is given) affected by such event, at such Holder's address
as it appears in the Security Register or as provided in writing by the
Depositary, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice mailed
to the Holder in the manner herein prescribed shall be conclusively deemed to
have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall
be the equivalent of such notice. Waivers of notice by Holders shall be
filed with the Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such
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notification as shall be made by or with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 109. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 110. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
SECURITY FORMS
Section 201. Forms Generally.
The Securities of each series, including Global Securities
representing Securities of such series, shall be in the form established,
without the approval of any Holders or the Trustee, by or pursuant to a Board
Resolution in accordance with Section 301 or by one or more indentures
supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.
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The definitive Securities may be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein and
issued pursuant to the within-mentioned Indenture.
__________________, as Trustee
By________________________
Authorized Signature
Section 203. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder shall, in
addition to the provisions established by or pursuant to a Board Resolution
or in one or more indentures supplemental hereto in accordance with Section
201, bear a legend in substantially the following form or such similar form
as may be required by the Depositary:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York, New York) to the issuer or to its agent for registration of
transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein."
ARTICLE 3
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
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The Securities may be issued in one or more series. There shall be
established, without the approval of any Holders or the Trustee, by or
pursuant to authority granted by one or more Board Resolutions, and, subject
to Section 303, there shall be set forth in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the
initial issuance of Securities of any series, all or any of the following, as
applicable:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in lieu of, other Securities of the series
pursuant to Section 304, 305, 306, 1007 and 1205 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder) and the absence of such limitation
shall mean that the Company may issue from time to time additional
securities of such series without limitation as to aggregate principal
amount;
(3) the Person to whom any interest on a Security of the series
shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest;
(4) the date or dates, or the method by which such date or dates are
determined or extended, on which the principal or installments of
principal and premium, if any, of the Securities of the series is or are
payable;
(5) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method by
which such rate or rates shall be determined, the date or dates from which
such interest shall accrue, the Interest Payment Dates on which such
interest shall be payable, the Regular Record Date for the interest payable
on any Interest Payment Date and the circumstances, if any in which the
Company may defer interest payments and the basis upon which interest shall
be calculated if other than that of a 360-day year of twelve 30-day months;
(6) the place or places, if any, where the principal of (and premium,
if any) and interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for registration of transfer or
exchange and notices and demands to or upon the Company with respect to the
Securities of the series and this Indenture may be served, other than or in
addition to the Corporate Trust Office of the Trustee and the office
maintained for such
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purpose in the Borough of Manhattan, the City of New York in accordance
with Section 502 hereof;
(7) if applicable, the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(9) whether the Securities of the series will be convertible into
shares of Common Stock and/or exchangeable for other securities, and if so,
the terms and conditions upon which such Securities will be so convertible
or exchangeable, and any deletions from or modifications or additions to
this Indenture to permit or to facilitate the issuance of such convertible
or exchangeable Securities or the administration thereof;
(10) the identity of each Security Registrar and Paying Agent, if
other than or in addition to the Trustee;
(11) if the amount of principal of, or any premium or interest on, any
Securities of the series may be determined by reference to an index or
pursuant to a formula, the manner in which such amounts shall be
determined;
(12) the applicability of, and any addition to or change in, the
covenants and definitions currently set forth in this Indenture;
(13) if other than denominations of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000, the denominations in which
Securities of the series shall be issuable;
(14) if other than the currency of the United States of America, the
currency, currencies, currency units or composite currencies in which
payment of the principal of and any premium and interest on any Securities
of the series shall be payable and the manner of determining the U.S.
dollar equivalent of the principal amount thereof for purposes of the
definition of "Outstanding" in Section 101, and, if the principal of or any
premium or interest on any Securities of the series is to be payable, at
the election of the Company or a Holder thereof, in one or more currencies
or currency units
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other than that or those in which the Securities are stated to be payable,
the currency, currencies or currency units in which payment of the
principal of and any premium and interest on Securities of such series as
to which such election is made shall be payable, and the periods within
which and the terms and conditions upon which such election is to be made;
(15) any other event or events of default applicable with respect to
Securities of the series in addition to or in lieu of those provided in
Section 701 and any change in the right of the Trustee or the Holders to
declare the principal of or any premium or interest on such Securities due
and payable;
(16) if less than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
702;
(17) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Securities and, if so, (a) the
Depositary with respect to such Global Security or Securities and (b) the
circumstances under which any such Global Security may be exchanged for
Securities registered in the name of, and any transfer of such Global
Security may be registered to, a Person other than such Depositary or its
nominee, if other than as set forth in Section 305;
(18) if applicable, that the Securities of the series, in whole or any
specified part, shall not be defeasible pursuant to Section 902 or Section
903 or both such Sections and, if other than by a Company Order, the manner
in which any election by the Company to defend such Securities shall be
evidenced;
(19) whether the Securities of the series will be secured and the
type, amount and other terms of, and provisions relating to, the collateral
to be provided as such security, and any deletions, additions or
modifications to this Indenture to permit the issuance of secured
Securities or the administration thereof; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 1001(v)).
All Securities of any one series (other than Securities offered in
a Periodic Offering) shall be substantially identical except as to
denomination and except as may otherwise be provided by or pursuant to the
Board Resolution referred to above and, subject to Section 303, set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture
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supplemental hereto. All Securities of any one series need not be issued at
the same time. Unless otherwise provided, Securities of a single series may
have different terms, and a series may be reopened, without the consent of
the Holders of Securities of such series, for issuance of additional
Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
With respect to Securities of a series offered in a Periodic
Offering, such Board Resolution and Officers' Certificate or supplemental
indenture may provide general terms or parameters for Securities of such
series and provide either that the specific terms of particular Securities of
such series shall be specified in a Company Order or that such terms shall be
determined by the Company or its agents in accordance with other procedures
specified in a Company Order as contemplated by the third paragraph of
Section 303.
Section 302. Denominations.
Unless otherwise provided in the applicable Officers' Certificate
or supplemental indenture, the Securities of each series shall be issued in
registered form without coupons in such denominations as shall be specified
as contemplated by Section 301. In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series shall
be issuable in denominations of $1,000 or any amount in excess thereof which
is an integral multiple of $1,000.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President, its Chief Executive Officer, its Chief
Operating Officer, its Chief Financial Officer or one of its Vice Presidents,
under its corporate seal affixed thereto or reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
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At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed
by the Company to the Trustee for authentication, together with a Company
Order for the authentication and delivery of such Securities, or, in the case
of Securities offered in a Periodic Offering, from time to time in accordance
with such other procedures (including, without limitation, the receipt by the
Trustee of electronic instructions from the Company or its duly authorized
agents, promptly confirmed in writing by the Company) acceptable to the
Trustee as may be specified from time to time by a Company Order for
establishing the specific terms of particular Securities being so offered,
and the Trustee in accordance with the Company Order shall authenticate and
deliver such Securities. If the form or forms or terms of the Securities of
the series have been established by or pursuant to one or more Board
Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 801) shall be fully protected in relying upon
(a) an Opinion of Counsel stating:
(1) that the form or forms of such Securities have been established
in conformity with the provisions of this Indenture;
(2) that the terms of such Securities have been established in
conformity with the provisions of this Indenture;
(3) that authentication and delivery of such Securities and the
execution and delivery of the supplemental indenture, if any, by the
Trustee will not violate the terms of the Indenture;
(4) that the Company has the corporate power to issue, and has duly
authorized, such Securities;
(5) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer and other
laws of general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles, provided that such
Opinion of Counsel need express an opinion as to whether a court in the
United States would render a money judgment in a currency other than that
of the United States; and
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(6) that the issuance of such Securities will not contravene the
certificate of incorporation or bylaws of the Company or result in any
violation of any of the terms or provisions of any law or regulation or of
any indenture, mortgage or other agreement known to such Counsel by which
the Company is bound;
(b) an executed supplemental indenture, if any;
(c) a copy of a Board Resolution; and
(d) an Officers' Certificate;
provided, however, that, with respect to Securities of a series offered in a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel in connection only with the first authentication of each form of
Securities of such series and that the opinions described in clauses (a)(2)
and (a)(5) above may state, respectively, that
(2) if the terms of such Securities are to be established pursuant
to a Company Order or pursuant to such procedures as may be specified from
time to time by a Company Order, all as contemplated by a Board Resolution
or action taken pursuant thereto, such terms will have been duly authorized
by the Company and established in conformity with the provisions of this
Indenture; and
(5) that such Securities, when executed by the Company, completed,
authenticated and delivered by the Trustee in accordance with this
Indenture, and issued and delivered by the Company and paid for, all in
accordance with any agreement of the Company relating to the offering,
issuance and sale of such Securities, will be duly issued under this
Indenture and will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting generally the enforcement of creditors' rights and to general
principles of equity.
With respect to Securities of a series offered in a Periodic
Offering, the Trustee may rely, as to the authorization by the Company of any
of such Securities, the form or forms and terms thereof and the legality,
validity, binding effect and enforceability thereof, upon the Opinion of
Counsel, Company Order and other documents delivered pursuant to Sections 201
and 301 and this Section, as applicable, in connection with the first
authentication of a form of Securities of such series and it shall not be
necessary for the Company to deliver such Opinion of Counsel and other
documents (except as may be required by the specified other procedures, if
any, referred to above) at or prior to the time of authentication of each
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Security of such series unless and until the Trustee receives notice that
such Opinion of Counsel or other documents have been superseded or revoked,
and may assume compliance with any conditions specified in such Opinion of
Counsel (other than any conditions to be performed by the Trustee). If such
form or forms or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided
for herein executed by the Trustee by manual signature, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that
such Security has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture. Notwithstanding the foregoing, if
any Security shall have been authenticated and delivered hereunder but never
issued and sold by the Company, and the Company shall deliver such Security
to the Trustee for cancellation as provided in Section 309, for all purposes
of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any Series, the
Company may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Securities which are printed, lithographed,
typewritten or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities. In the case of Securities
of any series, such temporary Securities may be in the form of Global
Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable, subject to Section 305, for
definitive Securities of like tenor of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series the
Company shall execute and the Trustee shall
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authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series and of like tenor and of any
authorized denominations. Until so exchanged the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the "SECURITY REGISTER") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "SECURITY REGISTRAR" of each series of Securities for the
purpose of registering Securities and transfers of Securities as herein
provided at the Corporate Trust Office.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in any Place of Payment for
such series, the Company shall execute and the Trustee shall authenticate and
deliver (in the name of the designated transferee or transferees) one or more
new Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and tenor and bearing a number not
contemporaneously outstanding.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Securities to be exchanged at the office or agency of the
Company in any Place of Payment for such series. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt and entitled to the same benefits under this Indenture as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed, by
the Holder thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection
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with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 1007 or 1205 not involving any transfer.
The Company may but shall not be required (i) to issue, register
the transfer of or exchange Securities of any series during a period
beginning at the opening of business 15 days before the day of the mailing of
a notice of redemption of Securities of that series selected for redemption
under Section 403 and ending at the close of business on the day of such
mailing, (ii) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part or (iii) to register the transfer of or
exchange any certificated Securities during a period beginning five days
before the date of Maturity with respect to such Security and ending on such
date of Maturity.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, no Global Security shall be exchangeable
pursuant to this Section 305 for Securities registered in the name of, and no
transfer of a Global Security of any series may be registered to, any Person
other than the Depositary for such Security or its nominee, unless (i) such
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or the Company determines that the
Depositary is unable to continue as Depositary and the Company thereafter
fails to appoint a successor Depositary, (ii) the Company provides for such
exchange or registration of transfer pursuant to Section 301 of this
Indenture, (iii) the Company executes and delivers to the Trustee a Company
Order that such Global Security shall be so exchangeable and the transfer
thereof so registrable, or (iv) there shall have occurred and be continuing
an Event of Default with respect to the Securities of such series which
entitles the Holders of such Securities to accelerate the maturity thereof
Upon the occurrence in respect of any Global Security of any series of any
one or more of the conditions specified in clauses (i), (ii), (iii) or (iv)
of the preceding sentence or such other conditions as may be specified as
contemplated by Section 301 for such series, such Global Security may be
exchanged for Securities not bearing the legend specified in Section 203 and
registered in the names of such Persons as may be specified by the Depositary
(including Persons other than the Depositary or its nominees).
Notwithstanding any other provision of this Indenture, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security, including a Global Security, is
surrendered to the Trustee or the Company, together with such security, bond
or indemnity as may
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be required by the Trustee or the Company to save each of them and any agent
of either of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security, including a new
Global Security if the mutilated Security was a Global Security, of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security, including a Global Security if the destroyed, lost or stolen
Security was a Global Security, and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a bona fide purchaser, the Company shall
execute and upon its written request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new
Security, including a Global Security if the destroyed, lost or stolen
Security was a Global Security, of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee), if any, connected
therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly
issued hereunder. A new Security shall have such legends as appeared on the
old Security unless the Company determines otherwise.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
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Section 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered in the Security Register at the close
of business on the Regular Record Date for such Interest Payment Date.
Any interest on any Security of any series which is payable but is
not punctually paid or duly provided for on any Interest Payment Date (herein
called "DEFAULTED INTEREST") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 5 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series at such Holder's address as it appears in the Security
Register, not less than 15 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
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(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of, or in
exchange for, or in lieu of, any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Security is registered in the
Security Register as the owner of such Security for the purpose of receiving
payment of principal of (and premium, if any) and (subject to Sections 305
and 307) interest on such Security and for all other purposes whatsoever,
whether or not such 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.
No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary (or its nominees) shall have any rights under this
Indenture with respect to such Global security or any Security represented
thereby, and such Depositary may be treated by the Company, the Trustee, and
any agent of the Company or the Trustee as the owner of such Global Security
or any Security represented thereby for all purposes whatsoever.
Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by a Depositary as Holder of such Global Security, or
impair, as between a Depositary and the owners of beneficial interests in
such Global Security, the operation of customary practices governing the
exercise of the rights of the Depositary (or its nominees) as Holder of such
Global Security.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the
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Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. The Trustee is hereby directed by the Company to
destroy the canceled Securities held by the Trustee (subject to the record
retention requirements of the Exchange Act), and the Trustee shall provide
the Company with a certificate of a Responsible Officer certifying as to the
destruction of such Securities.
Section 310. Computation of Interest.
Except as otherwise specified pursuant to Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months and no
interest will accrue with respect to the 31st day of any month.
Section 311. CUSIP Number.
The Company in issuing the Securities may use "CUSIP" numbers, and
if it does so, the Trustee shall use the applicable CUSIP number in notices
of redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed
on the Securities. The Company will promptly notify the Trustee of any
change in any CUSIP number.
ARTICLE 4
REDEMPTION OF SECURITIES
Section 401. Applicability of Article.
Unless otherwise specifically provided for in accordance with
Section 301 with respect to any series of Securities, the Company shall have
no mandatory redemption or sinking fund obligations with respect to the
Securities of any series. Securities of any series which are redeemable
before their Stated Maturity in accordance with their terms as specifically
established in accordance with Section 301 shall be redeemable in accordance
with their terms and, except as otherwise provided by such terms, in
accordance with this Article.
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Section 402. Notices to Trustee.
If the Company elects to redeem any general Securities pursuant to
any optional redemption provisions established with respect to such series
hereof, it shall furnish to the Trustee, at least 40 days but not more than
60 days before the Redemption Date, an Officers' Certificate setting forth
(i) such Redemption Date, (ii) the Redemption Price, (iii) if the Securities
of such series have different terms and less than all of the Securities of
such series are to be redeemed, the terms of the Securities to be redeemed
and (iv) if less than all the Securities of such series with identical terms
are to be redeemed, the principal amount of such Securities to be redeemed.
In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
Section 403. Selection of Securities to Be Redeemed.
If less than all of the Securities of like tenor of any series are
to be redeemed at any time, the Trustee shall select the particular
Securities to be redeemed among the Holders on a PRO RATA basis (and in such
manner as complies with applicable legal and stock exchange requirements, if
any) or in such other manner as the Trustee, in the exercise of its
reasonable discretion, deems fair and appropriate. In the event of partial
redemption by lot, the particular Securities to be redeemed from the
Outstanding Securities of like tenor of such series shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to
the Redemption Date by the Trustee from the Outstanding Securities of like
tenor of such series not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected
for partial redemption, the principal amount thereof to be redeemed.
Securities and portions of them selected shall be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Securities of a Holder
are to be redeemed, the entire outstanding amount of Securities held by such
Holder, even if not a multiple of $1,000, shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities
called for redemption.
Section 404. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, notice of redemption shall be delivered by first-class mail, postage
prepaid, to each
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Holder whose Securities are to be redeemed at each such Holder's address
appearing in the Security Register.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of like tenor of any
series are to be redeemed, the portion of the principal amount of any
Security of such series to be redeemed and that, after the redemption date
upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion shall be issued;
(4) the place or places where such Securities are to be surrendered
for payment of the Redemption Price;
(5) that, unless the Company defaults in making such redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date;
(6) the paragraph of the Securities and/or Section of this Indenture
pursuant to which the Securities called for redemption are being redeemed;
and
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that
the Company shall have delivered to the Trustee, at least 40 days prior to
the redemption date, an Officers' Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph. The notice mailed in the
manner herein provided shall be conclusively presumed to have been duly given
whether or not the Holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the Holder of any Security
shall not affect the validity of the proceeding for the redemption of any
other Security.
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Section 405. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 404
hereof, Securities called for redemption become due and payable on the
redemption date at the redemption price plus accrued and unpaid interest, if
any, to such date.
Section 406. Deposit of Redemption Price.
At or before 10:00 a.m. Eastern Time on the Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 503) an amount of money, sufficient to pay the redemption
price of and accrued interest on all Securities to be redeemed on that date.
The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess
of the amounts necessary to pay the Redemption Price of (including any
applicable premium), and accrued interest on, all Securities to be redeemed.
Section 407. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at
the Redemption Price therein specified, and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable
to the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Regular Record
Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 408. Securities Redeemed in Part.
Any Security which is to be redeemed in part shall be surrendered
at a Place of Payment for such series (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the
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Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series and of like
tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered. To the extent a
series of Securities represented by a Global Security is to be redeemed only
in part, a notation of such redemption shall be made by the Trustee in the
schedule of exchanges on the Global Security.
ARTICLE 5
COVENANTS
Section 501. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of such series in accordance
with the terms of such Securities and this Indenture. Principal of (premium,
if any) and interest on the Securities of any series shall be considered paid
on the date due if the Paying Agent, if other than the Company or a
Subsidiary of the Company, holds as of 10:00 a.m. Eastern Time on the due
date money, deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the Company, no later
than one Business Day following the date of payment, any money (including
accrued interest) that exceeds such amount of principal (premium, if any) and
interest paid on the Securities of such series.
The Company shall, unless otherwise provided for as contemplated by
Section 301, pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal of the Securities of any
series at the rate equal to 1% per annum in excess of the interest rate then
applicable to such series to the extent lawful. In addition, the Company
shall pay interest on the Securities of any series (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments
of interest (without regard to any applicable grace period) at the same rate
to the extent lawful.
Section 502. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of
New York, and in each Place of Payment for any series of securities, an
office or agency (which may be an office of the Trustee or an affiliate of
the Trustee, the Security Registrar or co-registrar) where Securities of such
series may be surrendered
<PAGE>
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of such series and this Indenture
may be served. The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in the Borough of Manhattan, the City of New York and in each Place of
Payment for Securities of any series for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
Section 503. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum in the currency in which such series of Securities is payable
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 failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of such series, deposit with a
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 to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its
failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
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(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of such series in trust for the
benefit of the Holders of such Securities until such sums shall be paid to
such Holders or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of such series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of
such series; and
(3) during the continuance of any such default by the Company (or any
other obligor upon the Securities of such series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of
such series, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums 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.
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 Security 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 on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, the City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company on Company
Request.
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Section 504. Commission Reports.
(i) So long as any of the Securities remain Outstanding, the
Company shall cause copies of all current, quarterly and annual financial
reports on Forms 8-K, 10-Q and 10-K, respectively, and all proxy statements,
which the Company is required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act to be filed with the Trustee and mailed to
the Holders of such series of Securities at their addresses appearing in the
Security Register maintained by the Security Registrar, in each case, within
15 days of filing with the Commission. If the Company is not subject to the
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
continue to file with the Commission and the Trustee, with such copy to such
Holders, on the same timely basis, such reports as it would file if it were
subject to the requirements of Section 13 or 15(d) of the Exchange Act and
shall make such information available to securities analysts and prospective
investors upon request. The Company shall also comply with the provisions of
TIA Section 314(a).
(ii) If the Company is required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, the Company shall
cause any such annual or quarterly report to its stockholders and any other
financial report furnished by it generally to its stockholders to be filed
with the Trustee and mailed to the Holders of each series of Securities
Outstanding at their addresses appearing in the Security Register maintained
by the Security Registrar, and such reports shall be in lieu of the delivery
to such Holders of the reports on Form 10-K and 10-Q described in clause (i)
above if they contain the information required by clauses (i) above and (iii)
below, and if the reports are delivered within the periods specified in
clause (i) above.
(iii) So long as Securities of any series remain Outstanding, all
quarterly and annual financial reports of the Company shall include a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
(iv) So long as Securities of any series remain Outstanding, all
annual financial reports of the Company shall include a report by the Company's
certified independent accountants.
Section 505. Compliance Certificate.
(i) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether each has kept, observed, performed and fulfilled its
obligations under this
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Indenture, and further stating, as to each such Officer signing such
certificate, that to his or her knowledge each entity has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture
and is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action each is taking
or proposes to take with respect thereto) and that to his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of or interest, if any, on the Securities of any
series is prohibited or if such event has occurred, a description of the
event and what action each is taking or proposes to take with respect thereto.
(ii) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 504 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation reasonably satisfactory to the
Trustee) that in making the examination necessary for certification of such
financial statements nothing has come to their attention which would lead them
to believe that the Company has violated any provisions of Sections 501 or 506
or Article 6 of this Indenture or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
(iii) The Company shall, so long as any of the Securities of any
series are Outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of (a) any Default or Event of Default with respect to such
series of Securities or (b) any event of default under any other mortgage,
indenture or instrument, an Officers' Certificate specifying such Default, Event
of Default or event of default and what action the Company is taking or proposes
to take with respect thereto.
Section 506. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments and governmental
levies except (i) as contested in good faith by appropriate proceedings and with
respect to which appropriate reserves have been taken, if required, in
accordance with GAAP or (ii) where the failure to effect such payment is not
adverse in any material respect to the Holders.
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Section 507. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that 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 shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 508. Corporate Existence.
Subject to Article 6 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of each Subsidiary and (ii) the
rights (charter and statutory), licenses and franchises of the Company and its
Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders.
ARTICLE 6
SUCCESSORS
Section 601. Limitations On Mergers, Consolidations or Sales of Assets.
The Company may not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another Person unless:
(i) the Company is the surviving Person or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
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(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of the Company under the Securities
and this Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists; and
(iv) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction; and
(v) the Rating Agencies shall have reaffirmed or raised their
ratings with respect to all rated securities issued by the
Securitization Trusts which have been rated in whole or in part on the
basis of the Company's credit.
Section 602. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 601 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition, the provisions of this Indenture referring to the "Company"
shall refer instead to the successor corporation), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person has been named as the Company, herein.
ARTICLE 7
DEFAULTS AND REMEDIES
Section 701. Events of Default.
"EVENT OF DEFAULT", wherever used herein with respect to Securities of
any series, and unless otherwise provided with respect to Securities of any
series pursuant to Section 301, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary
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or be effected by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(i) a default for 30 days in the payment when due of interest on any
Security of such series;
(ii) a default in payment when due of principal of or premium, if
any, on any Security of such series at Maturity, upon redemption or
otherwise;
(iii) a failure by the Company to deposit any "mandatory sinking
fund payment" (as defined in Section 1101 hereof), when and as due, in
respect of the Securities of such series;
(iv) a default in the performance or breach of Article 6;
(v) failure by the Company for 60 days after notice to comply with
any of its other agreements in this Indenture or any Security of such
series;
(vi) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Subsidiaries
(or the payment of which is guaranteed by the Company or any of its
Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the date of this Indenture, which default (a) is caused by a
failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "PAYMENT DEFAULT") or
(b) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more;
(vii) failure by the Company or any of its Subsidiaries to pay
final judgments aggregating in excess of $5.0 million, which final
judgments remain unpaid, undischarged or unstayed for a period of 60 days
after their entry;
(viii) the Company or any Subsidiary of the Company pursuant to or
within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
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(b) consents to the entry of an order for relief against it in
an involuntary case in which it is the debtor,
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(d) makes a general assignment for the benefit of its creditors,
or
(e) admits in writing its inability generally to pay its debts
as the same become due;
(ix) court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against the Company or any Subsidiary of the
Company in an involuntary case in which it is the debtor,
(b) appoints a Custodian of the Company or any Subsidiary
thereof or for all or substantially all of the property of the Company
or any Subsidiary thereof, or
(c) orders the liquidation of the Company or any Subsidiary of
the Company,
and the order or decree remains unstayed and in effect for 60 days; and
(x) any other Event of Default provided with respect to Securities
of such series pursuant to Section 301.
The term "BANKRUPTCY LAW" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "CUSTODIAN" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
A Default under clause (v) is not an Event of Default with respect to
any series of Securities until the Trustee notifies the Company in writing, or
the Holders of at least 25% in principal amount of the then outstanding
Securities of such series notify the Company and the Trustee in writing, of the
Default and the Company does not cure the Default within 60 days after receipt
of such notice. The written notice must specify the Default, demand that it be
remedied and state that the notice is a "NOTICE OF DEFAULT."
In the case of any Event of Default with respect to the Securities of
any series pursuant to the provisions of this Section 701 occurring by reason of
any
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willful action (or inaction) taken (or not taken) by or on behalf of the
Company or any of its Subsidiaries the primary purpose of which was to allow
the Company to avoid payment of the premium, if any, that the Company would
have had to pay with respect to the Securities of such series if the Company
then had elected to redeem such Securities pursuant to the optional
redemption provisions, if any, established in accordance with this Indenture,
an equivalent premium shall also become and be immediately due and payable if
such Securities are repaid to the extent permitted by law, anything in this
Indenture or in the Securities of such series to the contrary
notwithstanding.
Section 702. Acceleration.
If an Event of Default with respect to the Outstanding Securities of
any series (other than an Event of Default specified in clauses (viii) and (ix)
of Section 701) occurs and is continuing, the Trustee by notice to the Company,
or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of such series by written notice to the Company and the
Trustee, may declare the unpaid principal of (or, if any of the Securities of
such series are Original Issue Discount Securities, such lesser portion of the
principal amount of such Securities as may be specified in the terms thereof),
premium, if any, and any accrued and unpaid interest on all the Securities of
that series to be due and payable. Upon such declaration the principal (or
specified portion thereof), premium, if any, and interest shall be due and
payable immediately. If an Event of Default specified in clause (viii) or (ix)
of Section 701 occurs with respect to the Company or any Subsidiary thereof such
an amount shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of a majority in principal amount of the Outstanding Securities of such series
by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default with respect to such series (except
nonpayment of principal or interest that has become due solely because of the
acceleration) have been cured or waived.
Section 703. Other Remedies.
If an Event of Default with respect to the Outstanding Securities of
any series occurs and is continuing, the Trustee may pursue any available remedy
(under this Indenture or otherwise) to collect the payment of principal,
premium, if any, or interest on the Securities of such series or to enforce the
performance of any provision of such Securities or this Indenture.
The Trustee may maintain a proceeding with respect to the Outstanding
Securities of any series even if it does not possess any of the Securities of
such series or does not produce any of them in the proceeding. A delay or
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omission by the Trustee or any Holder of such Securities in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 704. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of any series by written notice to the Trustee may
waive an existing Default or Event of Default with respect to the Securities of
such series and its consequences, except a continuing Default or Event of
Default in the payment of the principal of, premium, if any, or interest on any
Security of such series held by a nonconsenting Holder (other than a recision of
acceleration of the Securities of such series by the Holders of at least a
majority in aggregate principal amount of the Securities of such series and a
waiver of the payment default resulting from such acceleration). Upon any such
waiver, such Default shall cease to exist, and any Event of Default with respect
to the Securities of such series arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
Section 705. Control by Majority.
Holders of a majority in principal amount of the Outstanding
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee with respect to such series
or exercising any trust or power conferred on the Trustee with respect to such
series. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Securities of such series or that may involve
the Trustee in personal liability. The Trustee may take any other action which
it deems proper which is not inconsistent with any such direction.
Section 706. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default with respect to the Securities of such series;
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(ii) the Holders of at least 25% in principal amount of the
Outstanding Securities of such series make a written request to the Trustee
to pursue the remedy;
(iii) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(v) during such 60-day period the Holders of a majority in principal
amount of the Outstanding Securities of such series do not give the Trustee
a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
Section 707. Rights of Holders to Receive Payment.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date, or, in the case of a repurchase right at the option of the Holder, if any,
on the Repurchase Date specified pursuant to Section 301) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
Section 708. Collection Suit by Trustee.
If an Event of Default with respect to the Securities of any series
specified in Section 7.01(i) or (ii) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company or any other obligor for the whole amount of
principal, premium, if any, and interest remaining unpaid on the Securities of
such series and interest on overdue principal and, to the extent lawful,
interest, premium and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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Section 709. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
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 808 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 808 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any 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 710. Priorities.
If the Trustee collects any money with respect to the Securities of
any series pursuant to this Article, it shall pay out the money in the following
order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 808, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders of the Securities of such series for amounts due
and unpaid on the Securities of such series for principal, premium, if any, and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities of such series for principal, premium,
if any and interest, respectively;
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Third: without duplication, to Holders of the Securities of such
series for any other principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness owing to such Holders under this Indenture or the
Securities of such series; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
Section 711. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 707, or a suit by Holders of more than 10% in principal
amount of the Outstanding Securities of the affected series.
ARTICLE 8
TRUSTEE
Section 801. Duties of Trustee.
(i) With respect to the Securities of any series, if an Event of
Default has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(ii) With respect to the Securities of any series, except during the
continuance of an Event of Default known to the Trustee:
(a) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture or the TIA and the Trustee need
perform only those duties that are specifically set forth in this Indenture
or the TIA and no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee, and
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(b) 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. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(iii) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) this paragraph does not limit the effect of paragraph (ii) of
this Section;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 705 hereof.
(iv) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(i), (ii), and (iii) of this Section.
(v) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(vi) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 802. Rights of Trustee.
(i) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(ii) Any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order or as
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otherwise expressly provided herein and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(iii) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(iv) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(v) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
Section 803. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other
agent. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 811 and 812 hereof.
Section 804. Trustee's Disclaimer.
The Trustee and the Authenticating Agent shall not be responsible for
and makes no representation as to the validity or adequacy of this Indenture or
the Securities of any series, nor shall it or the Authenticating Agent be
accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, nor shall it or the Authenticating Agent be responsible for the
use or application of any money received by any Paying Agent other than the
Trustee, nor shall it be responsible for any statement or recital herein or any
statement in the Securities of any series or any other document in connection
with the sale of the Securities or pursuant to this Indenture other than its
certificate of authentication.
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Section 805. Notice of Defaults.
If a Default or Event of Default with respect to the Securities of any
series occurs and is continuing and if it is known to the Trustee, the Trustee
shall mail to Holders of such Securities a notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or
Event of Default in payment on any Security of any series or in the payment of
any sinking fund installment with respect to the Securities of such series, the
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of Securities of such series.
Section 806. Preservation of Information.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of such series of Securities
received by the Trustee in its capacity as Security Registrar.
Section 807. Reports by Trustee to Holders.
Within 60 days after May 15 of each year commencing with the later of
May 15, 1996 or the first May 15 after the first issuance of Securities pursuant
to this Indenture, the Trustee shall mail to the Holders of Securities of all
series a brief report dated as of such reporting date that complies with TIA
Section 313(a) (but if no event described in TIA Section 313(a) has occurred
within the twelve months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply with TIA Section 313(b). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c).
A copy of each report at the time of its mailing to the Holders shall
be mailed to the Company and filed with the Commission and each stock exchange
on which the Securities are listed. The Company shall promptly notify the
Trustee when the Securities are listed on any stock exchange.
Section 808. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder
mutually satisfactory to the Company and Trustee. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
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The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance of its duties and the administration of the trusts under this
Indenture, except as set forth below. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee
to so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall cooperate
in the defense. The Trustee may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this Section 808 shall survive
the satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or bad
faith.
To secure the Company's payment obligations in this Section 807, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on the Securities of any series. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 701(vii) or (viii) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 809. 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 in accordance with the
applicable requirements of Section 810.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company specifying
its intention to resign, the applicable series affected by such resignation, the
reason therefor and the date upon which such resignation shall become effective.
Notwithstanding the foregoing, unless the reason for such resignations is a
conflict pursuant to TIA Section 310(b) as provided in Section 812 hereof, the
Trustee must resign with respect to all Securities if the Trustee resigns with
respect to any series of Securities. If the instrument of acceptance by a
successor Trustee required by Section
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810 shall not have been delivered to the Trustee within 60 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) The Trustee may be removed with respect to any or all series of
Securities at any time upon 30 days notice by filing with it an instrument in
writing signed on behalf of the Company by a duly authorized officer of the
Company specifying such removal and the date on which it is to become effective.
(e) If at any time:
(1) the Trustee shall fail to comply with TIA Section 310(b) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 812 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to any one or more series of Securities or all Securities,
or (ii) subject to Section 711, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to such series of Securities and the appointment of
a successor Trustee or Trustees.
(f) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that
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at any time there shall be only one Trustee with respect to the Securities of
any particular series) and shall comply with the applicable requirements of
Section 809. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment
in accordance with the applicable requirements of Section 809, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in
the manner required by Section 810, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(g) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
Section 810. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each
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successor Trustee shall accept such appointment and which (1) shall contain
such provisions as shall be necessary or desirable to transfer and confirm
to, and to vest in, each successor Trustee all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee,
and (3) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of
a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and
each such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates. Whenever there is a successor Trustee with respect to one or more
(but less than all) series of securities issued pursuant to this Indenture,
the terms "Indenture" and "Securities" shall have the meanings specified in
the provisos to the respective definitions of those terms in Section 101
which contemplate such situation.
(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) and (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 811. 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
<PAGE>
Corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities; in case any of the Securities shall not have
been authenticated by the Trustee then in office, any successor by merger,
conversion or consolidation to such Trustee may authenticate such Securities
either in the name of such predecessor hereunder or in the name of the
successor Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have; provided, however,
that the right to adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 812. Eligibility; Disqualification.
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 or of any state thereof authorized under such laws to exercise
corporate trustee power, shall be subject to supervision or examination by
Federal or state authority and shall have a combined capital and surplus of
at least $100 million as set forth in its most recent published annual report
of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject
to TIA Section 310(b).
Section 813. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
Section 814. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the
Trustee, with the concurrence of the Company, may appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which shall
be authorized to act on behalf of the Trustee to authenticate Securities of
such series, and Securities so authenticated shall be entitled to the
benefits of this Indenture and
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shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating
Agent and a certificate of authentication executed on behalf of the Trustee
by an Authenticating Agent. Each Authenticating Agent shall be acceptable to
the Company and shall at all times be a Corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $100,000,000
and subject to supervision or examination by Federal, State or District of
Columbia 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 the purposes of this Section,
the combined capital and surplus of such Authenticating Agent shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any Corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such Corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at anytime
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first class mail, postage prepaid, to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named
as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
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The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to reimbursement for such payments subject to
Section 807.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication an
alternate certificate of authentication in the following form:
This is one of the Securities of the series designated herein and
issued pursuant to the within-mentioned Indenture.
_________________, as Trustee
By __________________________
Authorized Signature
____________________________,
as Authenticating Agent
By __________________________
Authorized Signature
ARTICLE 9
DISCHARGE OF INDENTURE
Section 901. Defeasance and Discharge of this Indenture and the Securities.
The Company may, at the option of its Board of Directors evidenced
by a Board Resolution set forth in an Officers' Certificate, at any time,
with respect to the Securities of any series, elect to have either Section
902 or 903 be applied to the Outstanding Securities of such series upon
compliance with the conditions set forth below in this Article 9.
Section 902. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 901 of the option
applicable to this Section 902, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities of
any series on the date the conditions set forth below are satisfied with
respect to such series (hereinafter, "LEGAL DEFEASANCE"). For this purpose,
such Legal Defeasance means
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that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the Outstanding Securities of such series, which
shall thereafter be deemed to be "Outstanding" only for the purposes of
Section 905 and the other Sections of this Indenture referred to in clauses
(i) and (ii) of this Section 902, and to have satisfied all its other
obligations under the Securities of such series and this Indenture as it
relates to such series (and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of Outstanding Securities of
such series to receive solely from the trust fund described in Section 904,
and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Securities when such
payments are due, (ii) the Company's obligations with respect to such
Securities under Sections 304, 305 and 502, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, including, without
limitation, the Trustee's rights under Section 807, and the Company's
obligations in connection therewith and (iv) this Article 9. Subject to
compliance with this Article 9, the Company may exercise its option under
this Section 902 notwithstanding the prior exercise of its option under
Section 903 with respect to the Securities of such series.
Section 903. Covenant Defeasance.
Unless specifically otherwise provided in a Board Resolution,
Officers' Certificate or indenture supplemental hereto provided pursuant to
Section 301, upon the Company's exercise under Section 901 of the option
applicable to this Section 903, the Company shall be released from its
obligations under the covenants contained in Sections 504, 505 and 506,
Article 6 and Section 301(12) with respect to the Outstanding Securities of
any series on and after the date the conditions set forth below are satisfied
with respect to such series (hereinafter, "COVENANT DEFEASANCE"), and the
Securities of such series shall thereafter be deemed not "outstanding" for
the purposes of any direction, waiver, consent or declaration or act of
Holders of such Securities (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "Outstanding"
for all other purposes hereunder (it being understood that such Securities
shall not be deemed outstanding for accounting purposes). For this purpose,
such Covenant Defeasance means that, with respect to the Outstanding
Securities of any series, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default with
respect to such series of Securities under Section 701(iv) or (v) but, except
as specified above, the remainder of this Indenture and such Securities shall
be unaffected thereby. In addition, upon the Company's exercise
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under Section 901 of the option applicable to this Section 903, Sections
701(v) through 701(x) shall not constitute Events of Default.
Section 904. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to application of either Section
802 or Section 903 to the Outstanding Securities of any series:
(i) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 812 who shall agree to comply with the provisions of this
Article 9 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of such
series, (a) cash in U.S. Dollars in an amount, or (b) non-callable
Government Securities which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide,
not later than one day before the due date of any payment, cash in U.S.
Dollars in an amount, or (c) a combination thereof, in such amounts, as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which shall be applied
by the Trustee (or other qualifying trustee) to pay and discharge (A) the
principal of, premium, if any, and interest on the Outstanding Securities
of such series on the Stated Maturity or on the applicable Redemption Date,
as the case may be, of such principal or installment of principal, premium,
if any, or interest on the day on which such payments are due and payable
and (B) any mandatory sinking fund payments or analogous payments
applicable to the Securities of such series on the day on which such
payments are due and payable in accordance with the terms of this Indenture
and such Securities; PROVIDED that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such non-callable
Government Securities to said payments with respect to the Securities of
such series.
(ii) In the case of an election under Section 902, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (a) the Company has
received from, or there has been published by, the Internal Revenue Service
a ruling or (b) since the date hereof, there has been a change in the
applicable federal income tax law, in either case to the effect that, and
based thereon such opinion shall confirm that, the Holders of the
Outstanding Securities of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance
and will be subject to federal income tax
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on the same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance has not occurred.
(iii) In the case of an election under Section 903, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States to the effect that the Holders of the Outstanding Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
Federal income tax in the same amount, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred.
(iv) No Default or Event of Default with respect to the Securities of
such series shall have occurred and be continuing on the date of such
deposit or, in so far as Subsection 701(vii) or 701(viii) is concerned, at
any time in the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(v) Such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which the Company is bound.
(vi) In the case of an election under either Section 902 or 903, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable Bankruptcy Law.
(vii) In the case of an election under either Section 902 or 903,
the Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election under
Section 902 or 903 was not made by the Company with the intent of
preferring the Holders of the series of Securities to be defeased over
other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others.
(viii) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating
that all conditions precedent provided for relating to either the Legal
Defeasance under Section 902 or the Covenant Defeasance under Section 903
(as the case may be) have been complied with as contemplated by this
Section 904.
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Section 905. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 906, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 905, the
"Trustee") pursuant to Section 904 in respect of the Outstanding Securities
of any series shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of the
Securities of such series of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not
be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 904 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding
Securities of such series.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
Company's request any money or non-callable Government Securities held by it
as provided in Section 904 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 904(i)), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 906. Repayment to Company.
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, premium,
if any, or interest on any Security 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 on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the NEW YORK TIMES and
THE WALL STREET JOURNAL (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not
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be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 907. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Dollars
or non-callable Government Securities in accordance with Section 902 or 903,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities of any series to be defeased shall be revived and reinstated as
though no deposit had occurred pursuant to Section 902 or 903 until such time
as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 902 or 903, as the case may be; PROVIDED, HOWEVER,
that, if the Company makes any payment of principal of, premium, if any, or
interest on any such Security following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Security
to receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 10
AMENDMENT, SUPPLEMENT AND WAIVER
Section 1001. Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
or pursuant to a Board Resolution, and the Trustee, at any time and from time
to time, may amend this Indenture or enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(i) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(ii) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of one or
more specified series) or to surrender any right or power herein conferred
upon the Company; or
(iii) to add any additional Events of Default (and if such Events
of Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are being included solely for the
benefit of such series); or
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(iv) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities of any series in certificated or uncertificated
form; or
(v) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (i) shall neither (A) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Security with respect to such provision or
(ii) shall become effective only when there is no such Security
Outstanding; or
(vi) to secure the Securities of any series; or
(vii) to establish the form or terms of Securities of any series
as permitted by Sections 201 and 301; or
(viii) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 809(b); or
(ix) to cure any ambiguity or defect in or to correct or supplement
any provision herein which may be inconsistent with any other provision in
this Indenture or any Security of any series, or to make any other
provisions with respect to matters or questions arising under this
Indenture, provided such action shall not adversely affect the interests of
the Holders of Securities of any series in any material respect; or
(x) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
Section 1002. With Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series at the time
Outstanding affected by such amendment or supplemental indenture (voting as
one class), by Act of said Holders delivered to the Company and the Trustee,
the Company, when authorized by a Board Resolution, and the Trustee may amend
this Indenture or enter into an indenture or indentures supplemental hereto
for the purpose of adding any
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provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no
such amendment or supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(i) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any such affected Security, or
reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 702, or change any Place of Payment where, or the coin or
currency in which, any such Security or any premium or the interest thereon
is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case
of redemption or repayment, on or after the Redemption Date or any
repayment date), or
(ii) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
modifications or amendments to the Indenture with respect to such series or
to the terms and conditions of such series or to approve a supplemental
indenture with respect to such series, or the consent of whose Holders is
required for any waiver with respect to such series of compliance with
certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture, or
(iii) modify any of the provisions of this Sections 704, 707 or
1002 or Article 8, 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 Security
affected thereby; provided however, that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the references
to "the Trustee" and concomitant changes in this Section 1002 and Article
8, or the deletion of this proviso, in accordance with the requirements of
Sections 810(b) and 1001(viii).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
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It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 1003. 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 801) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 1004. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities of the series affected thereby theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby to the extent
provided therein.
Section 1005. Compliance with TIA.
Every amendment or supplement to this Indenture or the Securities of
any series shall be set forth in a supplemental indenture that complies with the
TIA as then in effect.
Section 1006. Revocation and Effect of Consents.
Until an amendment, supplemental waiver or waiver becomes
effective, a consent to it by a Holder is a continuing consent by the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation
of the consent is not made on any Security. A supplemental indenture,
amendment or waiver becomes effective in accordance with its terms and
thereafter binds every Holder of the series of Securities to which such
amendment, supplemental waiver or waiver relates.
The Company may, but shall not be obligated to, fix a record date for
determining which Holders of the Securities of any series must consent to such
amendment or waiver. If the Company fixes a record date, the record date shall
be fixed at (i) the later of 30 days prior to the first solicitation of such
consent or the date
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<PAGE>
of the most recent list of Holders furnished to the Trustee prior to such
solicitation or (ii) such other date as the Company shall designate.
Section 1007. Reference in Securities to Supplemental Indentures.
Securities 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 a form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered
by the Trustee in exchange for Outstanding Securities of such series.
Section 1008. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 1002, the
Company shall give notice thereof to the Holders of each Outstanding Security
so affected, pursuant to Section 108, setting forth in general terms the
substance of such supplemental indenture.
ARTICLE 11
SINKING FUNDS
Section 1101. Applicability of Article.
Unless otherwise specifically provided for in accordance with
Section 301 with respect to any series of Securities, the Company shall have
no sinking fund obligations with respect to Securities of any series. The
sinking fund obligations as to any series of Securities for which such
obligations exist shall be as provided by the terms of such series of
Securities as specifically established in accordance with Section 301 and,
except as otherwise provided by such terms, as provided in this Article.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount
provided for by the terms of Securities of any series is herein referred to
as an "optional sinking fund payment". If provided for by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 1102. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided
for by the terms of Securities of such series.
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Section 1102. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of like tenor of
a series (other than any previously called for redemption) and (2) may apply
as a credit Securities of like tenor of a series which have been redeemed
either at the election of the Company pursuant to the terms of such
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to
the Securities of like tenor of such series required to be made pursuant to
the terms of such Securities as provided for by the terms of such series;
provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at
the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment
shall be reduced accordingly. Such Securities shall be first applied to the
sinking fund payment next due and any excess shall be applied to the
following sinking fund payments in the order they are due.
Section 1103. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
Securities of like tenor of a series, the Company will deliver to the Trustee
an Officers' Certificate specifying the amount of the next ensuing sinking
fund payment for such Securities pursuant to the terms of such Securities,
the portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of like tenor of that series pursuant to Section 1102
and, at the time of delivery of such Officers' Certificate, will also deliver
to the Trustee any Securities to be so delivered. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 403 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided
in Section 404. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
407 and 408.
ARTICLE 12
REPURCHASE OF SECURITIES AT OPTION OF HOLDERS
Section 1201. Applicability of Article.
Unless otherwise specifically provided for in accordance with
Section 301 with respect to any series of Securities, the Company shall have
no repurchase obligations with respect to Securities of any series.
Securities of any series which are repurchasable before their Stated Maturity
at the option of the Holders in accordance with their terms as specifically
established in accordance with
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Section 301 shall be repurchasable in accordance with their terms and, except
as otherwise provided by such terms, in accordance with this Article.
Section 1202. Notice of Repurchase Date.
Notice of any Repurchase Date with respect to Securities of any
series shall, unless otherwise specified by the terms of such Securities, be
given by the Company not less than 45 nor more than 60 days prior to such
Repurchase Date to each Holder of Securities of such series subject to
repurchase in accordance with Section 108.
The notice as to Repurchase Date shall state:
(1) the Repurchase Date;
(2) the Repurchase Price;
(3) the place or places where such Securities are to be surrendered
for payment of the Repurchase Price and the date by which such Securities
must be so surrendered in order to be repurchased;
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right; and
(5) that exercise of the option to elect repurchase is irrevocable.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right.
Section 1203. Deposit of Repurchase Price.
On or prior to the Repurchase Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
paying Agent, segregate and hold in trust as provided in Section 406) the
amounts required to be deposited in accordance with the applicable repurchase
right provisions or, if no such amount is specified, an amount of money
sufficient to pay the Repurchase Price of and (unless the Repurchase Date
shall be an Interest Payment Date) accrued interest, if any, on all of the
Securities of such series which are to be repurchased on that date.
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Section 1204. Securities Payable on Repurchase Date.
The form of option to elect repurchase having been delivered as
specified in the form of Security for such series as provided in Article 2,
the Securities of such series so to be repurchased shall, on the Repurchase
Date, become due and payable at the Repurchase Price applicable thereto and
from and after such date (unless the Company shall default in the payment of
the Repurchase Price and accrued interest) such Securities shall cease to
bear interest. Upon surrender of any such Security for repurchase in
accordance with said notice, such Security shall be paid by the Company at
the Repurchase Price together with accrued interest to the Repurchase Date;
provided, however, that installments of interest whose Stated Maturity is on
or prior to such Repurchase Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular and Special Record Dates according
to their terms and the provisions of Section 307.
If the amount deposited in accordance with Section 1203 is
insufficient to pay the Repurchase Price of all of the Securities as to which
the option to elect repurchase exists under this Indenture and has been
exercised, the Trustee shall select the particular Securities to be
repurchased on a PRO RATA basis among all such Holders of all series of
Securities having such repurchase right and so exercising the option to elect
repurchase (and in such manner as complies with applicable legal and stock
exchange requirements, if any). The Trustee shall promptly notify the
Company in writing of the Securities selected for repurchase and the
principal amount thereof. Securities and portions of them selected shall be
in amounts of $1,000 or whole multiples of $1,000. Except as provided in
this paragraph, provisions of this Indenture that apply to Securities to be
repurchased also apply to portions of Securities to be repurchased.
If any such Security shall not be paid upon surrender thereof for
repurchase, the principal (and premium, if any) shall, until paid, bear interest
from the Repurchase Date at the rate prescribed therefor in such Security.
Section 1205. Securities Repurchased in Part.
Any Security which by its terms may be repurchased in part at the
option of the Holder and which is to be repurchased only in part, or which is
repurchased only in part in accordance with Section 1204, shall be
surrendered at any office or agency of the Company designated for that
purpose pursuant to Section 502 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or
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Securities of the same series and of like tenor of any authorized
denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unrepurchased portion of the principal of the
Security so surrendered. To the extent a series of Securities represented by
a Global Security is to be repurchased in part only, a notation of such
redemption shall be made by the Trustee in the schedule of exchanges on the
Global Security.
ARTICLE 13
MISCELLANEOUS
Section 1301. TIA Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall
control.
Section 1302. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Authenticating Agent, the Security Registrar or the Paying
Agent may make reasonable rules and set reasonable requirements for their
respective functions.
Section 1303. Legal Holidays.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York or Minneapolis, Minnesota or at a place
of payment are authorized or obligated by law, regulation or executive order
to remain closed. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
Section 1304. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities, this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Securities by accepting a Security waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the
Securities.
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Section 1305. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One
signed copy shall be sufficient to prove this Indenture.
Section 1306. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
(i) THIS INDENTURE SHALL BE GOVERNED BY AND INTERPRETED UNDER THE
LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
COMPANY, THE TRUSTEE AND THE HOLDERS IN CONNECTION WITH THIS INDENTURE, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(ii) THE COMPANY AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS
TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDERS, HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE COMPANY OR ITS
PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO
ENABLE THE TRUSTEE TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE. THE COMPANY AGREES THAT
IT WILL NOT ASSERT ANY COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS IN ANY
PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE
A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE TRUSTEE. THE COMPANY WAIVES
ANY OBJECTION THAT THEY MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE
TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS.
(iii) THE COMPANY, THE TRUSTEE AND THE HOLDERS EACH WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH
THIS INDENTURE OR THE PLEDGE AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
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(iv) THE COMPANY AGREES THAT NEITHER THE TRUSTEE NOR ANY HOLDER
SHALL HAVE ANY LIABILITY TO THE COMPANY (WHETHER SOUNDING IN TORT, CONTRACT
OR OTHERWISE) FOR LOSSES SUFFERED BY THE COMPANY IN CONNECTION WITH, ARISING
OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE
RELATIONSHIP ESTABLISHED BY THIS INDENTURE, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND
NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE TRUSTEE OR SUCH
HOLDER, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF THE
NEGLIGENCE OR BAD FAITH OF THE TRUSTEE OR SUCH HOLDER, AS THE CASE MAY BE.
(v) THE COMPANY WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY
KIND PRIOR TO THE EXERCISE BY THE TRUSTEE OR ANY HOLDER OF ITS RIGHTS DURING
THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS THE COLLATERAL WITH
JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL OR OTHER
SECURITY FOR THE OBLIGATIONS. THE COMPANY WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER IN CONNECTION WITH ANY
JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR
LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS, TO ENFORCE ANY
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE OR ANY HOLDER,
OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR
PRELIMINARY OR PERMANENT INJUNCTION THIS INDENTURE, THE PLEDGE AGREEMENT OR
ANY OTHER AGREEMENT OR DOCUMENT AMONG THE COMPANY, ON THE ONE HAND, AND THE
TRUSTEE AND/OR THE HOLDERS, ON THE OTHER HAND.
Section 1307. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 1308. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successor.
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Section 1309. Severability.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 1310. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 1311. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
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* * *
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and the respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
OLYMPIC FINANCIAL LTD.
By_________________________________
Senior Vice President and Chief
Financial Officer
Attest:
___________________________________
Vice President, Corporate Counsel
and Secretary
[SEAL]
_______________________, as Trustee
By ________________________________
Vice President
Attest:
___________________________________
Assistant Secretary
[SEAL]
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<PAGE>
STATE OF )
) SS.
COUNTY OF )
On the ____ day of __________, 1997 before me personally came
___________ to me known, who, being by me duly sworn, did depose and say that
he is ___________ of Olympic Financial Ltd., 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.
[SEAL] ________________________________
Notary Public
STATE OF )
) SS.
COUNTY OF )
On the ____ day of _____________, 1997 before me personally came
___________________ to me known, who, being by me duly sworn, did depose and
say that he is Vice President of _________________, 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.
[SEAL] ________________________________
Notary Public
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Exhibit 4.2
________________________________________________________________________________
OLYMPIC FINANCIAL LTD.
to
____________________
as Trustee
_______________
SUBORDINATED NOTES
______________
INDENTURE
Dated as of ___________, 1997
________________________________________________________________________________
<PAGE>
OLYMPIC FINANCIAL LTD.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of __________, 1997
Trust Indenture
Act Section Indenture Section
- ----------- -----------------
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . 609
(b) . . . . . . . . . . . . . . . . . . . . . . . 608, 610
Section 311 . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . 701, 701(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . 701(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . 701(c)
Section 313 . . . . . . . . . . . . . . . . . . . . . . . 702
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . 703
(b) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . 101
(a)(l)(A) . . . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(l)(B) . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . 508
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . 107
Note: This reconciliation and tie shall not, for any purpose,
-i-
<PAGE>
be deemed to be part of the Indenture.
-ii-
<PAGE>
TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION . . . . . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . 11
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . 12
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . 13
SECTION 105. Notices, Etc., to Trustee and Company . . . . . . . . . 15
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . 15
SECTION 107. Compliance with Trust Indenture Act . . . . . . . . . . 16
SECTION 108. Effect of Headings and Table of Contents. . . . . . . . 16
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . . . 16
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . 16
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . 17
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . 17
SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . . . 17
ARTICLE TWO
SECURITY FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . 17
SECTION 202. Form of Trustee's Certificate of Authentication . . . . 18
SECTION 203. Form of Legend for Global Securities. . . . . . . . . . 18
ARTICLE THREE
THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 301. Amount Unlimited; Issuable in Series. . . . . . . . . . 18
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . 22
-iii-
<PAGE>
SECTION 303. Execution, Authentication, Delivery and Dating. . . . . 22
SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . . . 25
SECTION 305. Registration, Registration of Transfer and Exchange . . 25
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. . . . 27
SECTION 307. Payment of Interest; Interest Rights Preserved. . . . . 28
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . 30
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . 30
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . 31
ARTICLE FOUR
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . 31
SECTION 402. Application of Trust Money. . . . . . . . . . . . . . . 32
SECTION 403. Defeasance and Discharge of Indenture . . . . . . . . . 32
ARTICLE FIVE
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . 34
SECTION 502. Acceleration of Maturity; Rescission and Annulment. . . 36
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . . . 38
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities. . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 506. Application of Money Collected. . . . . . . . . . . . . 39
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . 40
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest. . . . . . . . . . . . . . . . . . 41
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<PAGE>
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . . . 41
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . 41
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . 41
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . . . . 42
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . 42
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . 42
SECTION 515. Waiver of Stay or Extension Laws. . . . . . . . . . . . 43
ARTICLE SIX
THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . 43
SECTION 602. Notice of Defaults. . . . . . . . . . . . . . . . . . . 44
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . 45
SECTION 604. Not Responsible for Recitals or Issuance of
Securities. . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . 46
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . 47
SECTION 607. Compensation and Reimbursement. . . . . . . . . . . . . 47
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . 48
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . 48
SECTION 610. Resignation and Removal; Appointment of Successor . . . 48
SECTION 611. Acceptance of Appointment by Successor. . . . . . . . . 50
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 613. Preferential Collection of Claims Against Company . . . 52
SECTION 614. Appointment of Authenticating Agent . . . . . . . . . . 52
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY. . . . . . . . . . . 54
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SECTION 701. Preservation of Information; Communications to
Holders . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 702. Reports by Trustee. . . . . . . . . . . . . . . . . . . 54
SECTION 703. Reports by Company. . . . . . . . . . . . . . . . . . . 55
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE . . . . . . . . . 56
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms . . 56
SECTION 802. Successor Substituted . . . . . . . . . . . . . . . . . 56
ARTICLE NINE
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 901. Supplemental Indentures Without Consent of Holders. . . 57
SECTION 902. Supplemental Indentures With Consent of Holders . . . . 58
SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . 59
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . 60
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . 60
SECTION 906. Reference in Securities to Supplemental Indentures. . . 60
SECTION 907. Notice of Supplemental Indentures . . . . . . . . . . . 60
SECTION 908. Supplemental Indentures With Consent of Holders of
Senior Debt . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE TEN
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1001. Payment of Principal, Premium and Interest. . . . . . . 61
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . 61
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . 61
SECTION 1004. Existence . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1005. Defeasance of Certain Obligations . . . . . . . . . . . 63
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SECTION 1006. Waiver of Certain Covenants . . . . . . . . . . . . . . 64
ARTICLE ELEVEN
REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1101. Applicability of Article. . . . . . . . . . . . . . . . 65
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . 65
SECTION 1103. Selection by Trustee of Securities to Be Redeemed . . . 66
SECTION 1104. Notice of Redemption. . . . . . . . . . . . . . . . . . 66
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . 67
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . 67
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . 68
ARTICLE TWELVE
SINKING FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1201. Applicability of Article. . . . . . . . . . . . . . . . 68
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . 69
ARTICLE THIRTEEN
SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1301. Agreement to Subordinate. . . . . . . . . . . . . . . . 70
SECTION 1302. Distribution on Dissolution, Liquidation and
Reorganization. . . . . . . . . . . . . . . . . . . . . 70
SECTION 1303. No Payment When Senior Debt in Default. . . . . . . . . 71
SECTION 1304. Payment to Holders of Senior Debt . . . . . . . . . . . 72
SECTION 1305. Subrogation . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1306. Payment on Securities Permitted . . . . . . . . . . . . 73
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SECTION 1307. Authorization of Holders to Trustee to Effect
Subordination . . . . . . . . . . . . . . . . . . . . . 73
SECTION 1308. No Waiver of Subordination Provisions . . . . . . . . . 74
SECTION 1309. Trustee as Holder of Senior Debt. . . . . . . . . . . . 74
SECTION 1310. Notices to Trustee. . . . . . . . . . . . . . . . . . . 74
SECTION 1311. No Fiduciary Duty by Trustee to Holders of Senior Debt. 75
SECTION 1312. Paying Agent Treated as Trustee . . . . . . . . . . . . 75
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT OPTION OF HOLDERS. . . . . . . . . . . . . 76
SECTION 1401. Applicability of Article. . . . . . . . . . . . . . . . 76
SECTION 1402. Notice of Repurchase Date . . . . . . . . . . . . . . . 76
SECTION 1403. Deposit of Repurchase Price . . . . . . . . . . . . . . 76
SECTION 1404. Securities Payable on Repurchase Date . . . . . . . . . 77
SECTION 1405. Securities Repurchased in Part. . . . . . . . . . . . . 77
ARTICLE FIFTEEN
CORPORATE OBLIGATION ONLY. . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 1501. Indenture and Securities Solely Corporate Obligations . 78
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INDENTURE, dated as of ______________, 1997 between OLYMPIC FINANCIAL
LTD., a corporation duly organized and existing under the laws of the State
of Minnesota (herein called the "Company"), having its principal office at
7825 Washington Avenue South, Minneapolis, Minnesota 55439, and
_____________, as Trustee (herein called the "Trustee"), having its principal
office at ___________.
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 or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof
(including holders from time to time of the Securities of any series held
through a Holder which is a Depositary (as defined herein)), as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. 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 or by Commission rule or regulation under the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(3) any gender used in this Indenture shall be deemed and construed
to include correlative words of the masculine, feminine or neuter gender;
<PAGE>
(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP and, except as otherwise
herein expressly provided, GAAP with respect to any computation required or
permitted hereunder shall mean GAAP at the date of such computation; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that Article.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Directors" means either the board of directors of the Company or
any duly authorized (generally or in any particular respect) committee appointed
by that board.
"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. Where any provision of this Indenture refers to action to be
taken pursuant to a Board Resolution (including establishment of any series of
the Securities and the forms and terms thereof), such action may be taken by any
committee, officer or employee of the Company authorized to take such action
(generally or in any particular respect) by a Board Resolution.
"Business Day", when used with respect to any Place of Payment or other
location, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions generally in that Place of Payment or
other
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location are authorized or obligated by law or executive order to close,
unless otherwise specified in a form of Security.
"Capital Lease Obligation" means, as to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property, which obligations are
required to be classified and accounted for as capital lease obligations on the
balance sheet of such Person under GAAP, and the amount of such obligations at
the time any determination thereof is to be made for purposes of this Indenture
shall be the amount of the liability in respect of a capital lease that would at
such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation, and any other obligor upon the Securities.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President,
its Chief Executive Officer, its Chief Operating Officer, its Chief Financial
Officer, a Vice President, its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, or by any other officer of the Company authorized to
sign by Board Resolution, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which at the date of original execution of the Indenture is _________________.
"Corporation" includes corporations, associations, companies, joint stock
companies and business trusts.
"Credit Enhancement Facility" means any document, instrument or agreement
entered into by any Person for the purpose of providing credit support for
Securitization Transactions and Warehouse Facilities.
"Defaulted Interest" has the meaning specified in Section 307.
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"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
clearing agency registered under the Exchange Act, specified for that purpose as
contemplated by Section 301 or any successor clearing agency registered under
the Exchange Act as contemplated by Section 305, and if at any time there is
more than one such Person, "Depositary" as used with respect to the Securities
of any series shall mean the Depositary with respect to the Securities of such
series.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United States
of America set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect from time
to time.
"Global Security" means a Security bearing the legend specified in Section
202 evidencing all or part of a series of Securities, issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary or
nominee.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, as to any Person, any of the following obligations,
contingent or otherwise, whether outstanding on the date of this Indenture or
thereafter created, incurred, assumed or guaranteed by such Person:
(a) all obligations for borrowed money or for the deferred purchase
price of property or services (including, without limitation, any interest
accruing subsequent to an event of default), except any such obligation
that constitutes a trade payable or an accrued liability arising in the
ordinary course of business, if and to the extent the foregoing
Indebtedness would appear as a liability on a balance sheet of such Person
prepared in accordance with GAAP;
(b) all obligations evidenced by bonds, notes, debentures or other
similar instruments issued by such Person;
(c) all Indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired (even
though the rights and remedies of the seller or lender under such agreement
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<PAGE>
in the event of default are limited to repossession or sale of such
property), except any such obligation that constitutes a trade payable or
an accrued liability arising in the ordinary course of business, if and to
the extent the foregoing Indebtedness would appear as a liability on a
balance sheet of such Person prepared in accordance with GAAP;
(d) all Capital Lease Obligations;
(e) all obligations for the payment of principal or interest, all
commitment fees and all reimbursement obligations incurred, created or
arising in connection with Securitization Transactions, Warehouse
Facilities or Credit Enhancement Facilities;
(f) all Indebtedness of the types referred to in the foregoing
clauses (a) through (e) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any lien upon or security interest in property of such Person
(including, without limitation, accounts and contract rights), even though
such Person has not assumed or become liable for the payment of such
Indebtedness;
(g) any guarantee of any Indebtedness of the types referred to in the
foregoing clauses (a) through (f), regardless of whether such obligation
would appear on a balance sheet of such Person prepared in accordance with
GAAP; and
(h) all renewals, extensions and refundings of any Indebtedness of
the types referred to in any of the foregoing clauses (a) through (g).
"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 shall
include the terms of particular series of Securities established as contemplated
by Section 301; provided, however, that, if at any time more than one Person is
acting as Trustee under this instrument due to the appointment of one or more
separate Trustees for any one or more separate series of Securities pursuant to
Section 610(e), "Indenture" shall mean, with respect to such series of
Securities for which any such Person is Trustee, 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 shall include the terms of particular series of Securities
for which such Person is Trustee established as contemplated by Section 301,
exclusive, however, of any provisions or terms which relate solely to other
series of Securities for which such Person is not Trustee, regardless of when
such terms or provisions were adopted, and exclusive of any provisions or terms
adopted by means of one or more indentures supplemental
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hereto executed and delivered after such Person had become such Trustee but
to which such Person, as such Trustee, was not a party.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Junior Subordinated Debt" means the Indebtedness of the Company under its
Subordinated Extendible Notes and Subordinated Fixed-Term Notes issued pursuant
to the indenture dated as of July 1, 1994, by and between the Company and
Norwest Bank Minnesota, National Association, as Trustee, as the same was
amended and restated as of April 28, 1995.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Obligations" has the meaning specified in Section 1302.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President, the Chief Executive Officer, the Chief Operating Officer,
the Chief Financial Officer, a Vice President or an Assistant Vice President of
the Company, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
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(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units that shall be
deemed to be Outstanding shall be the U.S. dollar equivalent, determined in the
manner provided as contemplated by Section 301 as of the date of original
issuance of such Security, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent, determined as of
the date of original issuance of such Security, of the amount determined as
provided in (i) above) of such Security as determined by the Company pursuant to
Section 301, and (iii) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledges is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) and/or interest on any Securities on behalf
of the Company.
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"Periodic Offering" means an offering of Securities of a series from time
to time the specific terms of which Securities, including without limitation the
rate or rates of interest (or formula for determining the rate or rates of
interest), if any, thereon, the Stated Maturity or Maturities thereof and the
redemption provisions, if any, with respect thereto, are to be determined by the
Company or its agents upon the issuance of such Securities.
"Person" means any individual, Corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and/or
interest on the Securities of that series are payable.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Proceeding" has the meaning specified in Section 1302.
"Redemption Date", when used with respect to any Security or portion
thereof to be redeemed, means the date fixed for such redemption pursuant to
this Indenture.
"Redemption Price", when used with respect to any Security or portion
thereof to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee assigned by it to administer its corporate trust matters.
"Repurchase Date", when used with respect to any Security or portion
thereof to be repurchased, means the date fixed for such repurchase pursuant to
this Indenture.
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"Repurchase Price", when used with respect to any Security or portion
thereof to be repurchased, means the price at which it is to be repurchased
pursuant to this Indenture.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture; provided, however, that if at any time there is more than one
Person acting as Trustee under this Indenture, "Securities" with respect to the
Indenture as to which such Person is Trustee shall have the meaning stated in
the first recital of this Indenture and shall more particularly mean Securities
authenticated and delivered under this Indenture, exclusive, however, of
Securities of any series as to which such Person is not Trustee.
"Securities Payment" has the meaning specified in Section 1302.
"Securitization Transaction" means a public or private transfer of
installment sales contracts, loans, leases or other receivables by which the
Company directly or indirectly securitizes a pool of specified installment sales
contracts, loans, leases or other receivables.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Debt" means all Indebtedness of the Company, except Indebtedness
created or evidenced by an instrument which expressly provides that such
Indebtedness is subordinated in right of payment to any other Indebtedness of
the Company. Without limiting the generality of the foregoing, Senior Debt
shall include: (i) the guarantee by the Company of any Indebtedness of any other
Person (including, without limitation, subordinated Indebtedness of another
Person), unless such guarantee is expressly subordinated to any other
Indebtedness of the Company; (ii) Indebtedness of the Company under its 13%
Senior Notes due 2000 issued pursuant to the indenture dated as of April 28,
1995, by and between the Company and Norwest Bank Minnesota, National
Association, as Trustee; and (iii) Indebtedness of the Company under that
certain Amended and Restated Credit Agreement dated as of August 4, 1995, by and
among the Company, First Bank National Association, as Administrative Bank, and
certain other banks party thereto. Without limiting the generality of the
foregoing, Senior Debt shall not include Indebtedness of the Company under the
Securities or the Junior Subordinated Debt. Notwithstanding anything to the
contrary in the foregoing, Senior Debt shall not include (x) any Indebtedness of
the Company to any of its Subsidiaries or other Affiliates and (y) any
Indebtedness incurred for the purchase of goods or materials or for services
obtained in the ordinary course of business (other than with the proceeds of
revolving credit borrowings permitted hereby).
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"Senior Payment Default" means any default in the payment of any Obligation
on any Senior Debt when due, whether at the stated maturity of any such payment
or by declaration of acceleration, call for redemption, mandatory repurchase,
payment or prepayment or otherwise.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 905.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligations" means direct obligations of the United States
of America, or any Person controlled or supervised by and acting as an agency or
instrumentality of such government, in each case where the payment or payments
thereunder are unconditionally guaranteed as a full faith and credit obligation
by such government and which are not callable or redeemable at the option of the
issuer or issuers 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 or other amount
with respect to any such U.S. Government Obligation held by such custodian for
the account of the
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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 or other amount with respect to the
U.S. Government Obligation evidenced by such depository receipt.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
"Voting Stock", when used with respect to a Corporation, means stock of the
class or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of
such Corporation (irrespective of whether at the time stock or securities of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency).
"Warehouse Facility" means a funding arrangement with one or more financial
institutions or other lenders or purchasers, either directly or through a
special purpose vehicle, exclusively to finance for a period not to exceed six
months the purchase of consumer installment sales contracts, loans, leases or
other receivables pending Securitization Transactions, including, without
limitation, so-called "pool bank" arrangements and repurchase agreements.
SECTION 102. 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, if so requested by the Trustee, an Officers' Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
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(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion whether such covenant or condition has been
complied with; and
(4) a statement whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Every such certificate provided under this Indenture shall be without
personal recourse to the individual executing the same and may include an
express statement to such effect.
SECTION 103. 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 any 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, opinion or representations
with respect to the matters upon which such officer's 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. Any certificate or opinion of counsel may be stated to be based on the
certificates or opinions of other counsel, in which event it shall be
accompanied by a copy of such other certificates or opinions.
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. All applications, requests, certificates, statements or
other instruments given under this Indenture shall be without personal recourse
to any individual giving the same and may include an express statement to such
effect.
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SECTION 104. Acts of Holders.
(a) 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 (including Persons who hold their Securities
through a Holder which is a Depositary) in person or by an agent duly appointed
in writing, and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
Without limiting the generality of the foregoing, a Holder, including a
Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy or proxies duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be made, given or taken by the Holders, and a Depositary that is a
Holder of a Global Security may provide its proxy or proxies to the beneficial
owners of interest in any such Global Security.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine, provided that, in any instance, the Trustee may require further proof
with respect to any matter referred to in this Section.
(c) The ownership of Securities shall be proved by the Security Register.
(d) The Company may fix any day as the record date for the purpose of
determining the Holders (including Persons who hold Securities through a Holder
which is a Depositary) of Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders of Securities of such series. If not set by the Company prior to the
first solicitation of a Holder of Securities of such series made by any Person
in respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders
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(including Persons who hold Securities through a Holder which is a Depositary)
of one or more series of Securities, only the Holders of Securities of such
series on such date (or their duly designated proxies) shall be entitled to give
or take, or vote on, the relevant action.
With regard to any action that may be given or taken hereunder only by
Holders (including Persons who hold their Securities through a Holder which is a
Depositary) of a requisite principal amount of Outstanding Securities of any
series (or their duly appointed agents) and for which a record date is set
pursuant to this subsection (d), the Company may, at its option, set an
expiration date after which no such action purported to be given or taken by any
Holder shall be effective hereunder unless given or taken on or prior to such
expiration date by Holders (including Persons who hold Securities through a
Holder which is a Depositary) of the requisite principal amount of Outstanding
Securities of such series on such record date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this Subsection (d), the
Company may, on one or more occasions at its option, extend such date to any
later date. Nothing in this subsection (d) shall prevent any Holder (or any
duly appointed agent thereof) from giving or taking, after any expiration date,
any action identical to, or, at any time, contrary to or different from any
action given or taken, or purported to have been given and taken, hereunder by a
Holder on or prior to such date, in which event the Company may set a record
date in respect hereof pursuant to this subsection (d).
Notwithstanding the foregoing, upon receipt by the Trustee, with respect to
Securities of any series, of (i) any Notice of Default pursuant to Section 501,
(ii) any declaration or acceleration, or any rescission and annulment of any
such declaration, pursuant to Section 502, or (iii) any direction given pursuant
to Section 512 (any such notice, declaration, rescission and annulment, or
direction being referred to herein as a "Direction"), a record date shall
automatically and without any other action by any Person be set for the purpose
of determining the Holders (including Persons who hold Securities through a
Holder which is a Depositary) of Outstanding Securities of such series entitled
to join in such Direction, which record date shall be the close of business on
the day the Trustee receives such Direction. The Holders (including Persons who
hold Securities through a Holder which is a Depositary) of Outstanding
Securities of such series on such record date (or their duly appointed agents),
and only such Persons, shall be entitled to join in such Direction, whether or
not such Holders remain Holders after record date; provided that, unless such
Direction shall have become effective by virtue of Holders (including Persons
who hold Securities through a Holder which is a Depositary) of the requisite
principal amount of Outstanding Securities of such series on such record date
(or their duly appointed agents) having joined therein on or prior to the 90th
day after such record date, such Direction shall automatically and without any
action by any Person be canceled and be of no further effect. Nothing in this
paragraph shall prevent a Holder (or duly appointed agent thereof) from giving,
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before or after the expiration of such 90-day period, a Direction contrary to or
different from, or, after the expiration of such period, identical to, a
Direction that has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date in respect thereof shall be set
pursuant to this subsection (d).
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing to or with a Responsible Officer
of the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument (Attention: Treasurer) or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder (including
Persons who hold Securities through a Holder which is a Depositary if the name
and address of such beneficial holder has been provided in writing to the Person
required to give such notice prior to the date such notice is given) affected by
such event, at such Holder's address as it appears in the Security Register or
as provided in writing by the Depositary, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice.
In any case where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with
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respect to other Holders. Any notice mailed to the Holder in the manner
herein prescribed shall be conclusively deemed to have been received by such
Holder, whether or not such Holder actually receives such notice. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of notice by Holders shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made by or with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Compliance with Trust Indenture Act.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of this Indenture. If any
provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such Act to be a part of and govern this
Indenture, the provision of the Trust Indenture Act shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company or the
Trustee shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, any Authenticating Agent, any
Paying Agent, any Securities Registrar, and their successors hereunder and the
Holders (including Persons who hold Securities through a Holder which is a
Depositary), any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of Minnesota.
SECTION 113. Legal Holidays.
Except as may be otherwise specified with respect to any particular
Securities, in any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series, including Global Securities representing
Securities of such series, shall be in the form established, without the
approval of any Holders or the Trustee, by or pursuant to a Board Resolution in
accordance with Section 301 or by one or more indentures supplemental hereto, in
each case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
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The definitive Securities may be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein and issued
pursuant to the within-mentioned Indenture.
_______________________, as
Trustee
By________________________
Authorized Signature
SECTION 203. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder shall, in
addition to the provisions established by or pursuant to a Board Resolution or
in one or more indentures supplemental hereto in accordance with Section 201,
bear a legend in substantially the following form or such similar form as may be
required by the Depositary:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York, New York) to the issuer or to its agent for registration of
transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein."
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
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The Securities may be issued in one or more series. There shall be
established, without the approval of any Holders or the Trustee, by or pursuant
to authority granted by one or more Board Resolutions, and, subject to Section
303, there shall be set forth in an Officers' Certificate, or established in one
or more indentures supplemental hereto, prior to the initial issuance of
Securities of any series, all or any of the following, as applicable:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906, 1107 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder) and the absence of such limitation shall mean that the
Company may issue from time to time additional securities of such series
without limitation as to aggregate principal amount;
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates, or the method by which such date or dates are
determined or extended, on which the principal or installments of principal
and premium, if any, of the Securities of the series is or are payable;
(5) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method by
which such rate or rates shall be determined, the date or dates from which
such interest shall accrue, the Interest Payment Dates on which such
interest shall be payable, the Regular Record Date for the interest payable
on any Interest Payment Date and the circumstances, if any in which the
Company may defer interest payments and the basis upon which interest shall
be calculated if other than that of a 360-day year of twelve 30-day months;
(6) the place or places, if any, where the principal of (and premium,
if any) and interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for registration of transfer or
exchange and notices and demands to or upon the Company with respect to the
Securities of the series and this Indenture may be served, other than or in
addition to the Corporate Trust Office of the Trustee;
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(7) if applicable, the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(9) whether the Securities of the series will be convertible into
shares of Common Stock and/or exchangeable for other securities, and if so,
the terms and conditions upon which such Securities will be so convertible
or exchangeable, and any deletions from or modifications or additions to
this Indenture to permit or to facilitate the issuance of such convertible
or exchangeable Securities or the administration thereof;
(10) the identity of each Security Registrar and Paying Agent, if
other than or in addition to the Trustee;
(11) if the amount of principal of, or any premium or interest on, any
Securities of the series may be determined by reference to an index or
pursuant to a formula, the manner in which such amounts shall be
determined;
(12) the applicability of, and any addition to or change in, the
covenants and definitions currently set forth in this Indenture;
(13) if other than denominations of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000, the denominations in which
Securities of the series shall be issuable;
(14) if other than the currency of the United States of America, the
currency, currencies, currency units or composite currencies in which
payment of the principal of and any premium and interest on any Securities
of the series shall be payable and the manner of determining the U.S.
dollar equivalent of the principal amount thereof for purposes of the
definition of "Outstanding" in Section 101, and, if the principal of or any
premium or interest on any Securities of the series is to be payable, at
the election of the Company or a Holder thereof, in one or more currencies
or currency units other than that or those in which the Securities are
stated to be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Securities of
such series as to which such
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election is made shall be payable, and the periods within which and the
terms and conditions upon which such election is to be made;
(15) any other event or events of default applicable with respect to
Securities of the series in addition to or in lieu of those provided in
Section 501 and any change in the right of the Trustee or the Holders to
declare the principal of or any premium or interest on such Securities due
and payable;
(16) if less than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(17) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Securities and, if so, (a) the
Depositary with respect to such Global Security or Securities and (b) the
circumstances under which any such Global Security may be exchanged for
Securities registered in the name of, and any transfer of such Global
Security may be registered to, a Person other than such Depositary or its
nominee, if other than as set forth in Section 305;
(18) if applicable, that the Securities of the series, in whole or any
specified part, shall not be defeasible pursuant to Section 403 or Section
1005 or both such Sections and, if other than by a Company Order, the
manner in which any election by the Company to defend such Securities shall
be evidenced; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series (other than Securities offered in a
Periodic Offering) shall be substantially identical except as to denomination
and except as may otherwise be provided by or pursuant to the Board Resolution
referred to above and, subject to Section 303, set forth, or determined in the
manner provided, in the Officers' Certificate referred to above or in any such
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time. Unless otherwise provided, Securities of a single
series may have different terms, and a series may be reopened, without the
consent of the Holders of Securities of such series, for issuance of additional
Securities of such series.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee
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at or prior to the delivery of the Officers' Certificate setting forth the
terms of the series.
With respect to Securities of a series offered in a Periodic Offering, such
Board Resolution and Officers' Certificate or supplemental indenture may provide
general terms or parameters for Securities of such series and provide either
that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company or its agents in accordance with other procedures specified in a Company
Order as contemplated by the third paragraph of Section 303.
SECTION 302. Denominations.
Unless otherwise provided in the applicable Officers' Certificate or
supplemental indenture, the Securities of each series shall be issued in
registered form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with respect
to the Securities of any series, the Securities of such series shall be issuable
in denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its President, its Chief Executive Officer, its Chief Operating
Officer, its Chief Financial Officer or one of its Vice Presidents, under its
corporate seal affixed thereto or reproduced thereon attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these officers on
the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, or, in the case of Securities
offered in a Periodic Offering, from time to time in accordance with such other
procedures (including, without limitation, the receipt by the Trustee of
electronic instructions from the Company or its duly authorized agents, promptly
confirmed in writing by the Company) acceptable to the Trustee as may be
specified from time to time by a Company Order for establishing the specific
terms of particular Securities being so
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offered, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities. If the form or forms or terms of
the Securities of the series have been established by or pursuant to one or
more Board Resolutions as permitted by Sections 201 and 301, in
authenticating such Securities and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon
(a) an Opinion of Counsel stating:
(1) that the form or forms of such Securities have been established
in conformity with the provisions of this Indenture;
(2) that the terms of such Securities have been established in
conformity with the provisions of this Indenture;
(3) that authentication and delivery of such Securities and the
execution and delivery of the supplemental indenture, if any, by the
Trustee will not violate the terms of the Indenture;
(4) that the Company has the corporate power to issue, and has duly
authorized, such Securities;
(5) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable against the Company
in accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer and other
laws of general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles, provided that such
Opinion of Counsel need express an opinion as to whether a court in the
United States would render a money judgment in a currency other than that
of the United States; and
(6) that the issuance of such Securities will not contravene the
certificate of incorporation or bylaws of the Company or result in any
violation of any of the terms or provisions of any law or regulation or of
any indenture, mortgage or other agreement known to such Counsel by which
the Company is bound;
(b) an executed supplemental indenture, if any;
(c) a copy of a Board Resolution; and
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(d) an Officers' Certificate;
provided, however, that, with respect to Securities of a series offered in a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel in connection only with the first authentication of each form of
Securities of such series and that the opinions described in clauses (a)(2) and
(a)(5) above may state, respectively, that
(2) if the terms of such Securities are to be established pursuant to
a Company Order or pursuant to such procedures as may be specified from
time to time by a Company Order, all as contemplated by a Board Resolution
or action taken pursuant thereto, such terms will have been duly authorized
by the Company and established in conformity with the provisions of this
Indenture; and
(5) that such Securities, when executed by the Company, completed,
authenticated and delivered by the Trustee in accordance with this
Indenture, and issued and delivered by the Company and paid for, all in
accordance with any agreement of the Company relating to the offering,
issuance and sale of such Securities, will be duly issued under this
Indenture and will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting generally the enforcement of creditors' rights and to general
principles of equity.
With respect to Securities of a series offered in a Periodic Offering, the
Trustee may rely, as to the authorization by the Company of any of such
Securities, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel, Company
Order and other documents delivered pursuant to Sections 201 and 301 and this
Section, as applicable, in connection with the first authentication of a form of
Securities of such series and it shall not be necessary for the Company to
deliver such Opinion of Counsel and other documents (except as may be required
by the specified other procedures, if any, referred to above) at or prior to the
time of authentication of each Security of such series unless and until the
Trustee receives notice that such Opinion of Counsel or other documents have
been superseded or revoked, and may assume compliance with any conditions
specified in such Opinion of Counsel (other than any conditions to be performed
by the Trustee). If such form or forms or terms have been so established, the
Trustee shall not be required to authenticate such Securities if the issue of
such Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
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No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any Series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in the form of Global Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable, subject to Section 305, for
definitive Securities of like tenor of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of the same series and
of like tenor and of any authorized denominations. Until so exchanged the
temporary Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of
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Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" of each series of Securities for the purpose of registering
Securities and transfers of Securities as herein provided at the Corporate Trust
Office.
Upon surrender for registration of transfer of any Security of any series
at the office or agency of the Company in any Place of Payment for such series,
the Company shall execute and the Trustee shall authenticate and deliver (in the
name of the designated transferee or transferees) one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor and bearing a number not contemporaneously
outstanding.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at the office or agency of the Company in any Place of Payment for
such series. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt and entitled to the same benefits under this Indenture as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company may but shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part or (iii) to register the transfer of or
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exchange any certificated Securities during a period beginning five days
before the date of Maturity with respect to such Security and ending on such
date of Maturity.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, no Global Security shall be exchangeable pursuant
to this Section 305 for Securities registered in the name of, and no transfer of
a Global Security of any series may be registered to, any Person other than the
Depositary for such Security or its nominee, unless (i) such Depositary notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or the Company determines that the Depositary is unable to
continue as Depositary and the Company thereafter fails to appoint a successor
Depositary, (ii) the Company provides for such exchange or registration of
transfer pursuant to Section 301 of this Indenture, (iii) the Company executes
and delivers to the Trustee a Company Order that such Global Security shall be
so exchangeable and the transfer thereof so registrable, or (iv) there shall
have occurred and be continuing an Event of Default with respect to the
Securities of such series which entitles the Holders of such Securities to
accelerate the maturity thereof Upon the occurrence in respect of any Global
Security of any series of any one or more of the conditions specified in clauses
(i), (ii), (iii) or (iv) of the preceding sentence or such other conditions as
may be specified as contemplated by Section 301 for such series, such Global
Security may be exchanged for Securities not bearing the legend specified in
Section 205 and registered in the names of such Persons as may be specified by
the Depositary (including Persons other than the Depositary or its nominees).
Notwithstanding any other provision of this Indenture, a Global Security
may not be transferred except as a whole by the Depositary for such Global
Security to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security, including a Global Security, is surrendered to
the Trustee or the Company, together with such security, bond or indemnity as
may be required by the Trustee or the Company to save each of them and any agent
of either of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security, including a new
Global Security if the mutilated Security was a Global Security, of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security, including
a Global Security if the destroyed, lost or stolen Security was a Global
Security, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or
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the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security, including a Global Security if the destroyed, lost
or stolen Security was a Global Security, of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee), if any, connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder. A new
Security shall have such legends as appeared on the old Security unless the
Company determines otherwise.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered in the Security Register at the close of business on
the Regular Record Date for such Interest Payment Date.
Any interest on any Security of any series which is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
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(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series at such Holder's address as it appears 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 so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
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SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered in the Security Register as the
owner of such Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Sections 305 and 307) interest on such Security
and for all other purposes whatsoever, whether or not such 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.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary (or its nominees) shall have any rights under this
Indenture with respect to such Global security or any Security represented
thereby, and such Depositary may be treated by the Company, the Trustee, and any
agent of the Company or the Trustee as the owner of such Global Security or any
Security represented thereby for all purposes whatsoever. Notwithstanding the
foregoing, with respect to any Global Security, nothing herein shall prevent the
Company, the Trustee, or any agent of the Company or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by a
Depositary as Holder of such Global Security, or impair, as between a Depositary
and the owners of beneficial interests in such Global Security, the operation of
customary practices governing the exercise of the rights of the Depositary (or
its nominees) as Holder of such Global Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. The Trustee is
hereby directed by the Company to destroy the canceled Securities held by the
Trustee, and the Trustee shall provide the Company with a certificate of a
Responsible Officer certifying as to the destruction of such Securities.
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SECTION 310. Computation of Interest.
Except as otherwise specified pursuant to Section 301 for Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year of twelve 30-day months and no interest will accrue with
respect to the 31st day of any month.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
with respect to any series of Securities specified in a Company Request (except
as to any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
(A) all Securities of such series therefore authenticated and
delivered (other than (i) Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
306 and (ii) Securities for whose payment money has therefore 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 1003) have been delivered to the Trustee for
cancellation; or
(B) all Securities of such series not therefore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the
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purpose an amount, in the currency in which such Securities are
payable, sufficient to pay and discharge the entire indebtedness on
such Securities not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest to the
date of such deposit (in the case of Securities which have become due
and payable) or to the respective Stated Maturity or Redemption Date,
as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company, and
(3) the Company has delivered to the Trustee an Officers' Certificate
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 the Securities of such series have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to a series of Securities, the obligations of the Company and the
Trustee to the Holders of Securities of other series not so satisfied and
discharged, the obligations of the Company to the Trustee under Section 607,
the obligations of the Trustee to any Authenticating Agent under Section 614,
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 402 and the last paragraph of Section 1003, shall survive.
SECTION 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities of each
series and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee but such money need not be segregated from other funds
except to the extent required by law.
SECTION 403. Defeasance and Discharge of Indenture.
If principal of and any premium and interest on Securities of any series
are denominated and payable in U.S. Dollars, the Company shall be deemed to
have paid and discharged the entire Indebtedness on all the Outstanding
Securities of such series on the 91st day after the date of the deposit
referred to in subparagraph (d) hereof, and the provisions of this Indenture,
as it relates to such Outstanding Securities, shall no longer be in effect
(and the Trustee, at the request and expense of
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the Company, shall execute proper instruments acknowledging the same), except
as to:
(a) the rights of Holders of Securities of such series to receive,
from the trust funds described in subparagraph (d) hereof, (i) payment of
the principal of (and premium, if any) or interest on the Outstanding
Securities of such series on the Stated Maturity of such principal or
installment of principal or interest and (ii) the benefit of any mandatory
sinking fund payments applicable to the Securities of such series on the
day on which such payments are due and payable in accordance with the terms
of this Indenture and such Securities;
(b) the Company's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003; and
(c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder;
provided that, the following conditions shall have been satisfied:
(d) The Company has deposited or caused to be irrevocably deposited
with the Trustee (or another trustee satisfying the requirements of Section
609) as trust funds in the trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of such
series, (i) U.S. Dollars 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 referred to in clause (A) or (B) of this
subparagraph (d) U.S. Dollars in an amount or (iii) a combination thereof,
sufficient, in the opinion of a nationally-recognized firm of independent
certified public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge (A) the principal of (and
premium, if any) and each installment of principal of (and premium, if any)
and interest on the Outstanding Securities of such series on the Stated
Maturity of such principal or installment of principal and interest and (B)
any mandatory sinking fund or analogous payments applicable to the
Securities of such series on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such
Securities;
(e) such deposit shall not cause the Trustee with respect to the
Securities of such series to have a conflicting interest as defined in
Section 608 and for purposes of the Trust Indenture Act with respect to
such Securities;
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(f) 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;
(g) such provision would not cause any Outstanding Securities of such
series then listed on the New York Stock Exchange or other securities
exchange to be delisted as a result thereof;
(h) no Event of Default or event which with notice or lapse of time
would become an Event of Default with respect to the Securities of such
series shall have occurred and be continuing on the date of such deposit or
during the period ending on the 91st day after such date;
(i) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel to the effect that there has been a change in
applicable federal law such that, or the Company has received from, or
there has been published by, the Internal Revenue Service a ruling to the
effect that, Holders of the Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposits, defeasance and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same times, as
would have been the case if such deposit, defeasance and discharge had not
occurred; and
(j) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the defeasance contemplated by this Section have been complied
with.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, and unless otherwise provided with respect to Securities of any series
pursuant to Section 301, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of such
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
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(2) default in the payment of the principal of (or premium, if any,
on) any Security of such series when due and payable; or
(3) default in the deposit of any sinking fund payment in respect of
any Security of such series, when and as due by the terms of a Security of
such series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or the Securities of such series
(other than a covenant or warranty a default in the performance or breach
of which is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of a
series of one or more Securities other than such series), and continuance
of such default or breach for a period of 60 days after written notice
thereof has been received by the Company from the Trustee or by the Company
and the Trustee from the Holders of at least 25% in aggregate principal
amount of the Outstanding Securities of such series, specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) an event of default, as defined in any indenture or instrument
under which the Company or any Subsidiary shall have outstanding at least
$5,000,000 aggregate principal amount of Indebtedness (other than as part
of a Securitization Transaction), shall happen and be continuing and such
Indebtedness shall, as a result thereof, have been accelerated (or
comparable event shall have occurred) so that the same shall have become
due and payable prior to the date on which the same would otherwise have
become due and payable and such acceleration has been in effect without
rescission or annulment for a period of 60 days; provided, however, that if
such event of default under such indenture or instrument shall be remedied
or cured by the Company or waived by the holders of such Indebtedness, or
if such acceleration under such indenture or instrument shall have been
rescinded or annulled by the holders of such Indebtedness, then, unless the
Securities of such series shall have been accelerated as provided in this
Indenture, the Event of Default hereunder by reason thereof shall be deemed
likewise to have been thereupon remedied, cured or waived without further
action upon the part of either the Trustee or any Holders of the Securities
of any series; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
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respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(8) a final judgment, judicial decree or order for the payment of
money in excess of $5,000,000 shall be rendered against the Company or any
Subsidiary, and such judgment, decree or order shall have remained unpaid,
unvacated, unbonded or unstayed for a period of 60 days; or
(9) any other Event of Default provided with respect to Securities of
such series pursuant to Section 301.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Outstanding Securities of any series
occurs and is continuing, then and in every such case the Trustee or the Holders
of not less than 25% in aggregate principal amount of the Outstanding Securities
of such series may declare the principal amount (or, if any of the Securities of
such series are Original Issue Discount Securities, such lesser portion of the
principal amount of such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified portion thereof)
shall become immediately due and payable; provided that in the case of an Event
of Default
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described in Section 501(6) or (7) hereof, the principal amount of
all Securities (or specified portion thereof) shall become due and payable
immediately, without any notice to the Company or the Trustee.
Upon payment of such principal amount (and premium, if any), such interest
and interest on overdue principal and overdue interest to the extent
prescribed therefor in the Securities of such series (to the extent payment
of such interest is legally enforceable), all of the Company's obligations in
respect of the payment of principal and interest on the Securities of such
series shall terminate.
At any time after such a declaration of acceleration with respect to
Outstanding 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 aggregate
principal amount of the Outstanding 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
sufficient to pay
(A) all overdue interest on all Securities of such series,
(B) the principal of (and premium, if any, on) any 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 Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(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 607; and
(2) all Events of Default with respect to Securities of such series,
other than the non-payment of the principal of Securities of such series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security of
any series when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security of any series at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Security, the whole amount then due and payable on such
Security for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest at the
rate or rates prescribed therefor in such Security, and, in addition thereto
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities of any series or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the
principal of the Securities of any series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) or such portion of the principal amount of any series of
Original Issue Discount Securities as may be specified in the terms of such
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series and interest owing and unpaid in respect of the Securities of such
series and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 607) and of the Holders 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 custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder of Securities of such series to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities of any 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 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and for
any other amounts due the Trustee under Section 607, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment
has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee with respect to any series of Securities
pursuant to this Article shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money
on account of principal (or premium, if any) or interest, upon presentation
of the Securities of such series and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
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FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities of such
series in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal (and
premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of such
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding 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 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 of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
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SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date, or, in the case of a repurchase right at the option of the Holder, if
any, on the repurchase date specified pursuant to Section 301) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, 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 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of Securities of any
series to exercise any right or remedy accruing upon any Event of Default
with respect to such series shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders may be 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.
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SECTION 512. Control by Holders.
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to
the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of any series may, on behalf of the Holders of all
the Securities of such series, waive any past default hereunder with respect
to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series when due (other than amounts due
and payable solely upon acceleration pursuant to Section 502), unless
theretofore paid in full and cured in accordance with the terms of this
Indenture, or
(2) in respect of a covenant or provision hereof which under Section
902 cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion
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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; provided, however,
that the provisions of this Section shall not apply to any suit instituted by
the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities of the affected series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date or, in the case of a repurchase
right at the option of the Holder, if any, on the repurchase date specified
pursuant to Section 301).
SECTION 515. 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 601. Certain Duties and Responsibilities.
(a) With respect to Securities of any series, except during the
continuance of an Event of Default,
(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 provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under
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a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) With respect to Securities of any series, in case an Event of Default
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith with respect to any series of
Securities in accordance with the direction of the Holders of a majority in
principal amount of the Outstanding 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 with respect to the Notes, provided such
direction shall not be in conflict with any rule of law or with this
Indenture; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(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 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of
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Securities of such series, as their names and addresses appear in the
Security Register, notice 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 Security of such series or in the payment
of any sinking fund installment with respect to 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
Securities of such series; and provided, further, that in the case of any
default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 60 days after the occurrence thereof. For the purpose of this Section,
therein "default" means any event which is, or after notice or lapse of time
or both would become, an Event of Default with respect to Securities of such
series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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 or as
otherwise expressly provided herein and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a maker be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
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(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 Securities of any series pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities 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 furler inquiry
or investigation into such fact 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
pertaining to the Securities, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities of each series, except
the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities of any series, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture and any supplemental
indenture, to authenticate such Securities and to perform its obligations
under this Indenture and such Securities. The Trustee or any Authenticating
Agent shall not be accountable for the use or application by the Company of
Securities of any series or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity,
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may become the owner or pledgee of Securities and, subject to TIA Sections
310(b) and 311, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee and its agents for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
(b) As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of and interest on the
Securities of any series. "Trustee" for the purposes of this Section includes
any predecessor Trustee, but negligence or bad faith of any Trustee shall not
be attributable to any other Trustee.
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(c) When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(6) or (7), the expenses and
the compensation for such services are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 608. Disqualification; Conflicting Interests.
The provisions of TIA Section 310(b) shall apply to the Trustee.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to
act under TIA Section 310(a)(1) and whose parent shall have a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by Federal, State or District of Columbia authority. If such
Corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
Corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article. Neither the Company, nor any Person
directly or indirectly controlling, controlled by or under common control
with the Company, shall act as Trustee hereunder.
SECTION 610. 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 in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company specifying
its intention to resign, the applicable series affected by such resignation,
the reason therefor and the date upon which such resignation shall become
effective. Notwithstanding the foregoing, unless the reason for such
resignations is a conflict pursuant to Section 608, the Trustee must resign
with respect to all Securities if the Trustee resigns with respect to any
series of Securities. If the instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within
60 days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
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(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) The Trustee may be removed with respect to any or all series of
Securities at any time upon 30 days notice by filing with it an instrument in
writing signed on behalf of the Company by a duly authorized officer of the
Company specifying such removal and the date on which it is to become
effective.
(e) If at any time:
(1) the Trustee shall fail to comply with TIA Section 310(b) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to any one or more series of Securities or all
Securities, or (ii) subject to Section 514, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to such series of
Securities and the appointment of a successor Trustee or Trustees.
(f) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Securities of any
series shall be appointed by Act of the Holders of a majority in principal
amount of the
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Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(g) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by
mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Securities of such series as their names and addresses appear
in the Security Register. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee; but,
on the request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor
Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not
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retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees co-trustees
of the same trust and that each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery
of such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company
or any successor Trustee, such retiring Trustee shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates. Whenever
there is a successor Trustee with respect to one or more (but less than all)
series of securities issued pursuant to this Indenture, the terms "Indenture"
and "Securities" shall have the meanings specified in the provisos to the
respective definitions of those terms in Section 101 which contemplate such
situation.
(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) and (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 612. Merger, Conversion, Consolidation or Succession to Business.
Any Corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then
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in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities; in case any of the Securities shall
not have been authenticated by the Trustee then in office, any successor by
merger, conversion or consolidation to such Trustee may authenticate such
Securities either in the name of such predecessor hereunder or in the name of
the successor Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have; provided, however,
that the right to adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a). A Trustee which has
resigned or been removed is subject to TIA Section 311(a) to the extent
indicated therein.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee,
with the concurrence of the Company, may appoint an Authenticating Agent or
Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series, and Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent shall
be acceptable to the Company and shall at all times be a Corporation
organized and doing business under the laws of the United States of America,
any State thereof or the District of Columbia authorized under such laws to
act as Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to supervision or examination by Federal,
State or District of Columbia 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 the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. If at any
time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of
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this Section, such Authenticating Agent shall resign immediately in the
manner and with the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any Corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such Corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at anytime
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first class mail, postage prepaid, to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named
as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to reimbursement for such payments subject to Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication an alternate
certificate of authentication in the following form:
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This is one of the Securities of the series designated herein and issued
pursuant to the within-mentioned Indenture.
_________________________,
as Trustee
By _______________________
Authorized Signature
_________________________,
as Authenticating Agent
By _______________________
Authorized Signature
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of such series of Securities
received by the Trustee in its capacity as Security Registrar.
(b) The rights of Holders of any series of Securities to communicate
with other Holders of such series with respect to their rights under this
Indenture or under such Securities, and the corresponding rights and
privileges of the Trustee, shall be as provided by TIA Section 312(b).
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of
the Holders in accordance with Section 702(b), regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made
under Section 702(b).
SECTION 702. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the later of May
15, 1996 or the first May 15 after the first issuance of Securities pursuant
to this
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Indenture, the Trustee shall transmit by mail to all Holders of Securities of
all series as provided in TIA Section 313(c) a brief report dated as of such
May 15 if required by TIA Section 313(a). A copy of each such report shall,
at the time of such transmission to Holders, be filed by the Trustee with
each stock exchange upon which any Securities are listed, with the Commission
and with the Company. The Company will notify the Trustee when any series of
Securities is listed on any stock exchange.
SECTION 703. Reports by Company.
The Company shall:
(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
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then
it shall file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(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;
(3) transmit by mail to all Holders of all series of Securities, as
their names and addresses appear in the Security Register, reports as may
be required by rules and regulations prescribed from time to time by the
Commission; and
(4) furnish to the Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, a brief
certificate of the Company's principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants
under this Indenture. For purposes of this
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paragraph, such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture.
The Trustee has no duty to review the financial or other reports described
in paragraphs (1) and (2) of this Section for purposes of determining compliance
with this or any other provision of this Indenture.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person unless:
(1) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety shall be a Corporation, partnership or trust, shall be organized
and validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Securities and
the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, 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
(3) 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, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture, comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger by the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801,
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the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of one or
more specified 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 for the benefit of less than all series of Securities,
stating that such Events of Default are being included solely for the
benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities of any series in certificated or uncertificated
form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (i) shall neither (A) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (B) modify the
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rights of the Holder of any such Security with respect to such provision or
(ii) shall become effective only when there is no such Security
Outstanding; or
(6) to secure the Securities of any series; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 61 l(b); or
(9) to cure any ambiguity or defect in or to correct or supplement
any provision herein which may be inconsistent with any other provision in
this Indenture or any Security of any series, or to make any other
provisions with respect to matters or questions arising under this
Indenture, provided such action shall not adversely affect the interests of
the Holders of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities of all series at the time Outstanding
affected by such supplemental indenture (voting as one class), by Act of said
Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any such affected Security, or
reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502, or change any Place of Payment where, or the coin or
currency in which, any such Security or any premium or the interest thereon
is payable, or impair the right to institute suit for the enforcement of
any such payment on or after
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the Stated Maturity thereof (or, in the case of redemption or repayment, on
or after the Redemption Date or any repayment date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
modifications or amendments to the Indenture with respect to such series or
to the terms and conditions of such series or to approve a supplemental
indenture with respect to such series, or the consent of whose Holders is
required for any waiver with respect to such series of compliance with
certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture, or
(3) modify any of the provisions of this Section 902, Section 513 or
Section 1005, 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 Security affected
thereby; provided however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section 902 and Section 1005, or
the deletion of this proviso, in accordance with the requirements of
Sections 61l(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. 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 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
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SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities of the series affected thereby theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby to the extent
provided therein.
SECTION 905. 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 906. Reference in Securities to Supplemental Indentures.
Securities 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 a form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered
by the Trustee in exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Security so
affected, pursuant to Section 106, setting forth in general terms the
substance of such supplemental indenture.
SECTION 908. Supplemental Indentures With Consent of Holders of Senior Debt.
Without the consent of the holders of all Senior Debt affected thereby,
the Company and the Trustee shall not have the power to enter into an
indenture or indentures supplemental hereto for the purpose of amending or
modifying the definition of "Senior Debt" in this Indenture in a manner
adverse to the holders of such affected Senior Debt.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of such series in accordance
with the terms of such Securities and this Indenture. In the absence of
contrary provisions with respect to the Securities of any series, interest on
the Securities of any series may, at the option of the Company, be paid by
check mailed to the address of the Person entitled thereto as it appears on
the Security Register.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of such series may be
presented or surrendered for payment, where Securities of such series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of such series
and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location and any change in the location of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of
such series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum in the currency in which such series of Securities is
payable sufficient to pay the principal (and
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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 failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of such series, deposit with a
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 to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of such series in trust for the
benefit of the Holders of such Securities until such sums shall be paid to
such Holders or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of such series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of
such series; and
(3) during the continuance of any such default by the Company (or any
other obligor upon the Securities of such series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of
such series, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
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.
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 Security and remaining unclaimed for two years after
such principal
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(and premium, if any) or interest has become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect
to such trust money, and all liability of the Company as trustee thereof,
shall thereupon cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense
of the Company cause to be published once, in a newspaper published in the
English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company
on Company Request.
SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any-such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Defeasance of Certain Obligations.
The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section
301. The Company may omit to comply with any term, provision or condition set
forth in Article Ten and Section 301(12) and any such omission with respect
Article Ten and to Section 301(12) shall not be an Event of Default, in each
case with respect to the Securities of that series, provided that the
following conditions have been satisfied:
(1) with reference to this Section 1005, the Company has deposited or
caused to be irrevocably deposited with the Trustee (or another trustee
satisfying the requirements of Section 609) as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of the Securities of that 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 referred to in
clause (A) or (B) of this subparagraph (1) money in an amount, or (iii) a
combination thereof,
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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 (A) the principal of
(and premium, if any) and each installment of principal (and premium, if
any) and interest on the Outstanding Securities on the Stated Maturity of
such principal or installments of principal and interest and (B) any
mandatory sinking fund payments or analogous payments applicable to the
Securities of such series on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such
Securities;
(2) such deposit shall not cause the Trustee with respect to the
Securities of that series to have a conflicting interest as defined in
Section 608 and for purposes of the Trust Indenture Act with respect to the
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) no Event of Default or event which with notice or lapse of time
would become an Event of Default with respect to the Securities of that
series shall have occurred and be continuing on the date of such deposit;
(5) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that Holders of the Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such
deposit and defeasance of certain obligations and will be subject to
Federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred; and
(6) 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 defeasance contemplated in this Section
have been complied with.
SECTION 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Article Ten and Section 301(12),
inclusive, with respect to the Securities of any series if before the time
for such compliance the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of such series shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such term,
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provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and
the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to waive any such term, provision
or condition. If a record date is fixed for such purpose, the Holders on
such record date or their duly designated proxies, and only such Persons,
shall be entitled to waive any such term, provision or condition hereunder,
whether or not such Holders remain Holders after such record date; provided
that unless the Holders of not less than a majority in principal amount of
the Outstanding Securities of such series shall have waived such term,
provision or condition prior to the date which is 90 days after such record
date, any such waiver previously given shall automatically and without
further action by any Holder be canceled and of no further effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Securities of any series shall be
evidenced by an Officers' Certificate. The Company shall, at least 45 days
prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of
(1) such Redemption Date,
(2) the Redemption Price,
(3) if the Securities of such series have different terms and less
than all of the Securities of such series are to be redeemed, the terms of
the Securities to be redeemed,
(4) whether the redemption is pursuant to a mandatory or optional
sinking fund, or both, if such is the case, and
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(5) if less than all the Securities of such series with identical
terms are to be redeemed, the principal amount of such Securities to be
redeemed.
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of like tenor of any series are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of like tenor of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of like tenor of that series
or any integral multiple thereof of the principal amount of Securities of
such series of a denomination larger than the minimum authorized denomination
for Securities of that series).
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Securities to be redeemed, at each such Holder's address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of like tenor of any
series are to be redeemed, the identification (and, in the case of partial
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redemption, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Trustee in the name and at the expense of the
Company, unless the Company notifies the Trustee of its intention to give
such notice directly.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money in immediately available funds sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be
redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable
to the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Regular Record
Dates according to their terms and the provisions of Section 307.
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If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor
in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed in part shall be surrendered at a
Place of Payment for such series (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities
of the same series and of like tenor, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered. To the extent a series of Securities represented by a Global
Security is to be redeemed only in part, a notation of such redemption shall
be made by the Trustee in the schedule of exchanges on the Global Security.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for
by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of like tenor of a
series (other than any previously called for redemption) and (2) may apply as
a credit Securities of like tenor of a series which have been redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant
to the terms of such
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Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of like tenor of such series
required to be made pursuant to the terms of such Securities as provided for
by the terms of such series; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly. Such
Securities shall be first applied to the sinking fund payment next due and
any excess shall be applied to the following sinking fund payments in the
order they are due.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
Securities of like tenor of a series, the Company will deliver to the Trustee
an Officers' Certificate specifying the amount of the next ensuing sinking
fund payment for such Securities pursuant to the terms of such Securities,
the portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of like tenor of that series pursuant to Section 1202
and, at the time of delivery of such Officers' Certificate, will also deliver
to the Trustee any Securities to be so delivered. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided
in Section 1104. Such notice having been duly given. the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 1301. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Securities of each
series, by such Holder's acceptance thereof, likewise covenants and agrees,
that the indebtedness evidenced by the Securities of each series and the
payment of the principal thereof, premium, if any, sinking fund requirements
therefor and interest thereon shall be subordinate and subject in right of
payment, to the extent and in the manner hereinafter set forth, to the prior
payment in full in cash or cash equivalents of all Senior Debt.
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SECTION 1302. Distribution on Dissolution, Liquidation and Reorganization.
Upon any distribution to creditors of the Company in a liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary,
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its properties, or upon an assignment
for the benefit of creditors or any other marshaling of the assets and
liabilities of the Company (each such event, if any, herein sometimes
referred to as a "Proceeding"):
(a) all principal of, premium, if any, interest (including interest
after the commencement of any such Proceeding at the rate specified in the
applicable Senior Debt) and commitment fees (the "Obligations") due on, or
to become due on or in respect of, all Senior Debt shall first be paid in
full in cash or cash equivalents before any payment or distribution of any
kind or character, whether in cash, property or securities, by set off or
otherwise (including any payment or distribution which may be payable or
deliverable by reason of the payment of any Junior Subordinated Debt), on
account of the principal of (and premium, if any) or interest on any
Securities or on account of any purchase, redemption, retirement or other
acquisition of Securities by the Company, any Subsidiary of the Company,
the Trustee or any Paying Agent or on account of any other obligation of
the Company in respect of any Securities (all such payments, distributions,
purchases, redemptions, retirements and acquisitions, whether or not in
connection with a Proceeding, herein referred to, individually and
collectively, as a "Securities Payment"), or before the Holders of the
Securities shall be entitled to retain any assets so paid or distributed in
respect thereof; and
(b) until the Senior Debt is paid in full in cash or cash equivalents
(as provided in subsection (a) above), any Securities Payment to which the
Holders of the Securities or the Trustee for their benefit would be
entitled except for the provisions of this Section 1302, shall be paid or
delivered by the Company or any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or
distribution directly to the holders of Senior Debt or their representative
or representatives or the trustee or trustees under any indenture pursuant
to which any instruments evidencing any Senior Debt may have been issued,
as their respective interests may appear.
For purposes of this Article Thirteen only, the words "any payment or
distribution of any kind or character, whether in cash, property or
securities" shall not be deemed to include (i) a payment or distribution of
stock or securities of the Company provided for by a plan of reorganization
or readjustment authorized by an order or decree of a court of competent
jurisdiction in a reorganization proceeding under any applicable bankruptcy
law or of any other corporation provided for by
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such plan of reorganization or readjustment which stock or securities are
subordinated in right of payment to all then outstanding Senior Debt to the
same extent as, or to a greater extent than, the Securities are so
subordinated as provided in this Article; or (ii) any deposit, or payment
made therefrom, pursuant to Article Four or Section 1005, with respect to any
series of Securities; provided that, in the case of any such payment from a
defeasance trust, the assets deposited in trust to fund such payment have
been so deposited for any period of at least 90 consecutive days without the
occurrence of a blockage of payment on such series of Securities pursuant to
this Section 1302 or Section 1303 hereof. The consolidation of the Company
with, or the merger of the Company into, another Person or the liquidation or
dissolution of the Company following the conveyance or transfer of all or
substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a Proceeding for the purposes of this Section if the Person formed by
such consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer such properties and assets as an entirety,
as the case may be, shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions set forth in Article Eight.
SECTION 1303. No Payment When Senior Debt in Default.
In the event that any Senior Payment Default shall have occurred, then no
Securities Payment shall be made unless and until such Senior Payment Default
shall have been cured or waived in writing or shall have ceased to exist or
all Obligations in respect of such Senior Debt shall have been paid in full
in cash or cash equivalents.
The provisions of this Section shall not apply to any Securities Payment
with respect to which Section 1302 hereof would be applicable.
SECTION 1304. Payment to Holders of Senior Debt.
Subject to the provisions of Section 1306, in the event that,
notwithstanding the provisions of Section 1302 or Section 1303, any
Securities Payment shall be received by the Trustee on behalf of the Holders
of the Securities (i) from the Company in violation of such provisions, or
(ii) from any other Person under such circumstances that such payment would,
if made directly by the Company, be in violation of such provisions, such
payment or distribution shall be held by the Trustee in trust for the benefit
of, and shall immediately be paid over by the Trustee, upon written request
by a Person entitled to give notice on behalf of such Senior Debt as
specified in Section 1310, to the holders of Senior Debt or their
representative or representatives, or to the trustee or trustees under any
indenture under which any instrument evidencing any of such Senior Debt may
have been
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issued, as their respective interests may appear, for application to the
payment of Senior Debt.
Upon any payment or distribution of assets or securities of the Company
referred to in Sections 1302 and 1303, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree of a court of
competent jurisdiction, or upon any certificate of any liquidating trustee or
agent or other similar Person making any payment or distribution to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining
the persons entitled to participate in such payment or distribution, the
holders of the Senior Debt, the amount thereof or payment thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto
or to this Article Thirteen. In the event that the Trustee determines, in
good faith, that further evidence is required with respect to the right of
any Person as a holder of Senior Debt to participate in any payment or
distribution referred to in Sections 1302 and 1303, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Debt held by such Person, as to the extent to
which such Person is entitled to participation in such payment or
distribution, and as to other facts pertinent to the rights of such Person
under Sections 1302 and 1303, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 1305. Subrogation.
Subject to the payment in full in cash or cash equivalents of all Senior
Debt at the time outstanding and, in the case of Warehouse Facilities, all
outstanding fees and expenses required to be paid by the Company pursuant to
the respective terms thereof, the Holders of the Securities shall be
subrogated to the rights of each holder of Senior Debt (to the extent of the
payments or distributions made to such holder pursuant to the provisions of
Sections 1302, 1303 and 1304) to receive payments or distributions of cash,
assets or securities of the Company applicable to the Senior Debt until the
Securities shall be paid in full. No payments or distributions to holders of
Senior Debt of cash, assets or securities of the Company to which Holders of
Securities would be entitled except for the provisions of this Article
Thirteen, and no payment over pursuant to the provisions of this Article
Thirteen to holders of such Senior Debt by the Holders of Securities shall,
as among the Company, its creditors other than the holders of Senior Debt,
and the Holders of the Securities, be deemed to be a payment by the Company
on account of the Senior Debt, it being understood that the provisions of
this Article Thirteen are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Debt, on the other hand, and nothing contained in this
Article Thirteen or elsewhere in this Indenture, or in the Securities, is
intended to or shall impair, as between the Company, its creditors other than
the
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holders of Senior Debt, and the Holders of the Securities, the obligation of
the Company, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of, premium, if any, and interest on the
Securities, as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of
the Holders of the Securities and creditors of the Company other than the
holders of Senior Debt, nor shall anything herein or therein prevent the
Trustee or the Holder of any Securities from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article Thirteen of the holders of
Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
SECTION 1306. Payment on Securities Permitted.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture, or in any of the Securities, shall prevent the Company from making
payment of the principal of, sinking fund, if any, premium, if any, or
interest on the Securities, at any time, except under the conditions
described in Section 1303 and except during the pendency of any Proceeding
within the meaning of Section 1302. Nothing contained in this Article
Thirteen or elsewhere in this Indenture, or in any of the Securities, shall
prevent the application by the Trustee of any moneys deposited with it
hereunder for the purpose, to the payment of or on account of the principal
of, sinking fund, if any, or premium, if any, or interest on the Securities,
unless the Trustee shall have received written notice, directed to it at its
Corporate Trust Office as provided in Section 1310.
SECTION 1307. Authorization of Holders to Trustee to Effect Subordination.
Each Holder of Securities, by such Holder's acceptance thereof,
authorizes and directs the Trustee in such Holder's behalf to take such
action as may be necessary or appropriate to effectuate, as between the
Holders of the Securities and the holders of Senior Debt, the subordination
provided in this Article Thirteen and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 1308. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
act or failure to act by any such holder, or by any noncompliance by the
Company with terms, provisions and covenants of this Indenture, regardless of
any knowledge thereof any such holder may have or be otherwise charged with.
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Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of
Senior Debt, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior
Debt or any instrument evidencing the same or any agreement under which
Senior Debt is outstanding; (ii) permit the Company to borrow, repay and then
reborrow any or all of the Senior Debt; (iii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Debt; (iv) release any Person liable in any manner for the collection
of Senior Debt; (v) exercise or refrain from exercising any rights against
the Company and any other Person; and (vi) apply any sums received by them to
Senior Debt.
SECTION 1309. Trustee as Holder of Senior Debt.
The Trustee shall be entitled to all the rights set forth in this Article
Thirteen in respect of any Senior Debt at any time held by it, to the same
extent as any other holder of Senior Debt, and nothing in Section 613 or
elsewhere in this Indenture shall deprive or be construed to deprive the
Trustee of its rights as such holder.
Nothing in this Article Thirteen shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607 hereof.
SECTION 1310. Notices to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by
the Trustee in respect of the Securities, but failure to give such notice
shall not affect the subordination of the Securities to the extent herein
provided if notice is otherwise given as hereinafter provided in this Section
1310. Notwithstanding the provisions of this Article or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until a Responsible
Officer of the Trustee shall have received written notice thereof from the
Company, any holder of Senior Debt or Qualified Senior Debt or any trustee,
fiduciary or agent therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 601 hereof, shall
be entitled in all respects to assume that no such facts exist. Any notice
required or permitted to be given to the Trustee by a holder of Senior Debt
or Qualified Senior Debt or a trustee, fiduciary or transfer agent therefor
shall be in writing and shall be sufficient for every purpose hereunder in
writing and either (i) sent via facsimile to the
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Trustee, the receipt of which shall be confirmed via telephone, or (ii)
mailed, first class postage prepaid, or sent overnight carrier, to the
Trustee addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address furnished in
writing to such holder of the Senior Debt or Qualified Senior Debt by the
Trustee. Notwithstanding anything else contained herein, no notice, request
or other communication to or with the Trustee shall be deemed given unless
received by a Responsible Officer at the Trustee's principal corporate trust
office.
SECTION 1311. No Fiduciary Duty by Trustee to Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt and shall not be liable to any such holders if it shall in
good faith mistakenly pay over or distribute to Holders of Securities or the
Company or any other Person moneys or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article Thirteen or otherwise.
SECTION 1312. Paying Agent Treated as Trustee.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article Thirteen shall in such case (unless the
context shall otherwise require) be construed as extending to and including
such Paying Agent within its meaning as fully for all intents and purposes as
if such Paying Agent were named in this Article Thirteen in place of the
Trustee.
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT OPTION OF HOLDERS
SECTION 1401. Applicability of Article.
Securities of any series which are repurchasable before their Stated
Maturity at the option of the Holders shall be repurchasable in accordance
with their terms and (except as otherwise specified pursuant to Section 301
for Securities of any series) in accordance with this Article.
SECTION 1402. Notice of Repurchase Date.
Notice of any Repurchase Date with respect to Securities of any series
shall, unless otherwise specified by the terms of such Securities, be given
by the Company not less than 45 nor more than 60 days prior to such
Repurchase Date to each Holder of Securities of such series subject to
repurchase in accordance with Section 105.
The notice as to Repurchase Date shall state:
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(1) the Repurchase Date;
(2) the Repurchase Price;
(3) the place or places where such Securities are to be surrendered
for payment of the Repurchase Price and the date by which such Securities
must be so surrendered in order to be repurchased;
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right; and
(5) that exercise of the option to elect repurchase is irrevocable.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right.
SECTION 1403. Deposit of Repurchase Price.
On or prior to the Repurchase Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money sufficient to pay the Repurchase Price of and (unless the
Repurchase Date shall be an Interest Payment Date) accrued interest, if any,
on all of the Securities of such series which are to be repurchased on that
date.
SECTION 1404. Securities Payable on Repurchase Date.
The form of option to elect repurchase having been delivered as specified
in the form of Security for such series as provided in Article Two, the
Securities of such series so to be repurchased shall, on the Repurchase Date,
become due and payable at the Repurchase Price applicable thereto and from
and after such date (unless the Company shall default in the payment of the
Repurchase Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for repurchase in accordance
with said notice, such Security shall be paid by the Company at the
Repurchase Price together with accrued interest to the Repurchase Date;
provided, however, that installments of interest whose Stated Maturity is on
or prior to such Repurchase Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular and Special Record Dates according
to their terms and the provisions of Section 307.
If any such Security shall not be paid upon surrender thereof for
repurchase, the principal (and premium, if any) shall, until paid, bear
interest from the Repurchase Date at the rate prescribed therefor in such
Security.
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SECTION 1405. Securities Repurchased in Part.
Any Security which by its terms may be repurchased in part at the option
of the Holder and which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that
purpose pursuant to Section 1002 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities
of the same series and of like tenor of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unrepurchased portion of the principal of the Security so
surrendered. To the extent a series of Securities represented by a Global
Security is to be repurchased in part only, a notation of such redemption
shall be made by the Trustee in the schedule of exchanges on the Global
Security.
ARTICLE FIFTEEN
CORPORATE OBLIGATION ONLY
SECTION 1501. Indenture and Securities Solely Corporate Obligations.
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture, any indenture supplement, or in any Security, because of
any Indebtedness evidenced thereby, shall be had against any incorporator, or
against any past, present or future stockholder, employee, officer or
director, as such, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, under any rule
of law, statute or constitutional provision or by the enforcement of any
assessment or penalty or by any legal or equitable proceeding or otherwise,
all such liability, whether at common law, in equity, by any constitution,
statute or otherwise, of incorporators, stockholders, employees, officers or
directors being expressly waived and released by the acceptance of the
Securities by the Holders thereof and as part of the consideration of the
issuance of the Securities.
* * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
OLYMPIC FINANCIAL LTD.
By_______________________
[name]
[title]
Attest:
_________________________
[name]
[title]
,
as Trustee
By ________________________
[name]
[title]
Attest:
_________________________
Name: ____________________
Title: _____________________
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<PAGE>
STATE OF )
) SS.
COUNTY OF )
On the ____ day of _______, 1997, before me personally came __________, to
me known, who, being by me duly sworn, did depose and say that he is ___________
of Olympic Financial Ltd., 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.
[SEAL] __________________________
Notary Public
STATE OF )
) SS.
COUNTY OF )
On the ____ day of ___________, 1997, before me personally came
___________, to me known, who, being by me duly sworn, did depose and say that
he is a ___________ of ___________, 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.
[SEAL] __________________________
Notary Public
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<PAGE>
Exhibit 5.1
Olympic Financial Ltd.
Olympic Financial Center
7825 Washington Avenue South
Minneapolis, Minnesota 55439-2435
Re: Registration Statement on Form S-3
$500,000,000 of Securities
Ladies and Gentlemen:
We have acted as counsel to Olympic Financial Ltd., a Minnesota
corporation (the "Company"), in connection with a Registration Statement on Form
S-3 (the "Registration Statement") relating to the sale by the Company from time
to time of (i) its unsecured debt securities, which may be either senior debt
securities (the "Senior Debt Securities") or subordinated debt securities (the
"Subordinated Debt Securities" and, together with the Senior Debt Securities,
the "Debt Securities"); (ii) shares of its preferred stock, $.01 par value per
share (the "Preferred Stock"), in one or more series; (iii) depositary shares
(the "Depositary Shares") evidenced by depositary receipts; (iv) shares of its
common stock, par value $.01 per share (the "Common Stock"); and (v) warrants
(collectively, the "Securities Warrants") to purchase Debt Securities (the "Debt
Securities Warrants"), Preferred Stock (the "Preferred Stock Warrants") or
shares of Common Stock (the "Common Stock Warrants"), for an aggregate initial
public offering price of up to $500,000,000 (or the equivalent in foreign
currencies, currency units or composite currencies (each, a "Currency")). The
Debt Securities, Preferred Stock, Depositary Shares, Common Stock and Securities
Warrants are herein collectively referred to as the "Securities."
We have examined the following documents:
(a) The Articles of Incorporation of the Company, as amended,
certified by the Secretary of State of the State of Minnesota;
(b) The Restated Bylaws of the Company, certified by its Secretary;
(c) Resolutions of the Board of Directors of the Company effective as
of December 12, 1996 (the "Financing Resolutions");
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Olympic Financial Ltd.
Page 2
(d) The Registration Statement, including a Prospectus which provides
that it will be supplemented in the future by one or more
supplements to the Prospectus (each a "Prospectus Supplement");
(e) The form of Indenture relating to Senior Debt Securities filed as
Exhibit 4.1 to the Registration Statement (the "Senior
Indenture"); and
(f) The form of Indenture relating to Subordinated Debt Securities
filed as Exhibit 4.2 to the Registration Statement (the
"Subordinated Indenture" and, together with the Senior Indenture,
the "Indentures").
We have also reviewed such questions of law as we have considered necessary and
appropriate for the purposes of the opinions set forth below. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
them by the Indentures.
In rendering our opinions set forth below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We have also assumed the legal capacity for all
purposes relevant hereto of all natural persons and, with respect to all parties
to agreements or instruments relevant hereto other than the Company, that such
parties had the requisite power and authority (corporate or otherwise) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinion, we have relied
upon certificates of officers of the Company and of public officials.
Based on the foregoing, we are of the opinion that:
1. When (a) the Registration Statement and any required post-effective
amendment thereto and any and all Prospectus Supplement(s) required by
applicable laws have all become effective under the Securities Act, and (b) when
the Debt Securities have been duly executed and delivered by all parties
thereto, and (c) assuming that the terms of the Indentures as executed and
delivered are as
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Olympic Financial Ltd.
Page 3
described in the Registration Statement, the Prospectus and the related
Prospectus Supplement(s), and (d) assuming that the Debt Securities are then
issued and sold as contemplated in the Registration Statement, the Prospectus
and the related Prospectus Supplement(s), the Indentures will constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with the terms of the Indentures.
2. When (a) the Debt Securities have been duly established by the
applicable Indentures (including, without limitation, the adoption by the Board
of Directors of the Company of a resolution duly authorizing the issuance and
delivery of the Debt Securities), duly authenticated by the trustee and duly
executed and delivered on behalf of the Company against payment therefor in
accordance with the terms and provisions of the applicable Indenture and as
contemplated by the Registration Statement, the Prospectus and the related
Prospectus Supplement(s), and (b) when the Registration Statement and any
required post-effective amendment thereto and any and all Prospectus
Supplement(s) required by applicable laws have all become effective under the
Securities Act, and (c) assuming that the terms of the Debt Securities as
executed and delivered are as described in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s), and (d) assuming that the
Debt Securities are then issued and sold as contemplated in the Registration
Statement, the Prospectus and the related Prospectus Supplement(s), the Debt
Securities will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with the terms of the Debt
Securities.
3. When (a) the Securities Warrants have been duly executed and
delivered, and issued and sold in the form and in the manner contemplated in the
Registration Statement, the Prospectus and the related Prospectus Supplement(s),
and (b) when the Registration Statement and any required post-effective
amendment thereto and any and all Prospectus Supplement(s) required by
applicable law have all become effective under the Securities Act, and (c)
assuming that the terms of the Securities Warrants as executed and delivered are
as described in the Registration Statement, the Prospectus and the related
Prospectus Supplement(s), and (d) assuming that the Securities Warrants are then
issued and sold as contemplated in the Registration Statement, the Prospectus
and the related Prospectus Supplement(s), the Securities Warrants will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms.
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Olympic Financial Ltd.
Page 4
4. When (a) a Deposit Agreement has been duly authorized and executed by
the Company and a depositary, and duly authorized, fully paid and nonassessable
shares of Preferred Stock have been deposited thereunder, and the Depositary
Shares have been duly executed and delivered thereunder, and issued and sold in
the form and in the manner contemplated in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s), and (b) when the
Registration Statement and any required post-effective amendment thereto and any
and all Prospectus Supplement(s) required by applicable law have all become
effective under the Securities Act, and (c) assuming that the terms of the
Depositary Shares as executed and delivered conform with the terms of this
Deposit Agreement and are as described in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s), and (d) assuming that the
Depositary Shares are then issued and sold as contemplated in the Registration
Statement, the Prospectus and the related Prospectus Supplement(s), the
Depositary Shares will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
5. The Company has the authority pursuant to its Articles of
Incorporation, as amended, to issue up to 100,000,000 shares of undesignated
capital stock. When a series of Preferred Stock has been duly established in
accordance with the terms of the Articles of Incorporation and applicable law,
and upon adoption by the Board of Directors of the Company of a resolution in
form and content as required by applicable law and upon issuance and delivery of
and payment for such shares in the manner contemplated by the Registration
Statement, the Prospectus and the related Prospectus Supplement(s) and by such
resolution, such shares of such series of Preferred Stock (including any
Preferred Stock duly issued (i) upon the exercise of any Securities Warrants
exercisable for Preferred Stock or (ii) upon the exchange or conversion of Debt
Securities that are exchangeable or convertible into Preferred Stock or (iii)
and deposited under a Deposit Agreement) will be validly issued, fully paid and
nonassessable.
6. The Company has the authority pursuant to its Articles of
Incorporation, as amended, to issue up to 100,000,000 shares of undesignated
capital stock. Upon adoption by the Board of Directors of the Company of a
resolution in form and content as required by applicable law and upon issuance
and delivery of and payment for such shares in the manner contemplated by the
Registration Statement, the Prospectus and the related Prospectus Supplement(s)
and by such resolution, such shares of Common Stock (including any Common Stock
duly issued (i) upon the exchange or conversion of any shares of Preferred Stock
that are exchangeable or convertible into Common Stock or (ii) upon the exercise
of any
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Olympic Financial Ltd.
Page 5
Securities Warrants exercisable for Common Stock or (iii) upon the exchange or
conversion of Debt Securities that are exchangeable or convertible into Common
Stock) will be validly issued, fully paid and nonassessable.
The opinions set forth above are subject to the following
qualifications and exceptions:
(a) Our opinions are subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of
general application affecting creditors' rights.
(b) Our opinions are subject to the effect of general principles of
equity, including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of whether considered in a
proceeding in equity or at law).
(c) In rendering the opinions set forth above, we have assumed that,
at the time of the authentication and delivery of a series of Securities, the
Financing Resolution referred to above will not have been modified or rescinded,
there will not have occurred any change in the law affecting the authorization,
execution, delivery, validity or enforceability of the Securities, the
Registration Statement will have been declared effective by the Commission and
will continue to be effective, none of the particular terms of a series of
Securities will violate any applicable law and neither the issuance and sale
thereof nor the compliance by the Company with the terms thereof will result in
a violation of any agreement or instrument then binding upon the Company or any
order of any court or governmental body having jurisdiction over the Company.
(d) As of the date of this opinion, a judgment for money in an action
based on a Debt Security denominated in a foreign currency or currency unit in a
federal or State court in the United States ordinarily would be enforced in the
United States only in United States dollars. The date used to determine the
rate of conversion into United States dollars of the Currency in which a
particular Debt Security is denominated will depend upon various factors,
including which court renders the judgment. Under Section 27 of the New York
Judiciary Law, a state court in the State of New York rendering a judgment on a
Debt Security would be required to render such judgment in the Currency in which
such Debt Security is denominated, and such judgment would be converted into
United States dollars at the exchange rate prevailing on the date of entry of
the judgment.
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Olympic Financial Ltd.
Page 6
(e) Minnesota Statutes Section 290.371, Subd. 4, provides that any
corporation required to file a Notice of Business Activities Report does not
have a cause of action upon which it may bring suit under Minnesota law unless
the corporation has filed a Notice of Business Activities Report and provides
that the use of the courts of the State of Minnesota for all contracts executed
and all causes of action that arose before the end of any period for which a
corporation failed to file a required report is precluded. Insofar as our
opinion may related to the valid, binding and enforceable character of any
agreement under Minnesota law or in a Minnesota court, we have assumed that any
party seeking to enforce such agreement has at all times been, and will continue
at all times to be, exempt from the requirement of filing a Notice of Business
Activities Report or, if not exempt, has duly filed, and will continue to file,
all Notice of Business Activities Reports.
Our opinions expressed above are limited to the laws of the States of
Minnesota and New York, the Delaware General Corporation Law and the federal
laws of the United States of America.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Validity of Securities" contained in the Prospectus included therein.
Dated: December 16, 1996
Very truly yours,
/s/Dorsey & Whitney LLP
RGS
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Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Olympic Financial
Ltd. for the registration of $500,000,000 in debt and equity securities and
to the incorporation by reference therein of our report dated January 19,
1996, with respect to the consolidated financial statements of Olympic
Financial Ltd., as amended, included in its Annual Report (Form 10-K/A-2) for
the year ended December 31, 1995, filed with the Securities and Exchange
Commission.
Minneapolis, Minnesota
December 16, 1996 ERNST & YOUNG LLP
