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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 12, 1997
OLYMPIC FINANCIAL LTD.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 0-20526 41-1664848
- ---------------------------- ------------------------ ------------------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification No.)
7825 Washington Avenue South, Minneapolis, Minnesota 55439-2435
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 942-9880
--------------------------
Not Applicable
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(Former name or former address, if changed since last report)
1
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
4.1 Indenture dated as of March 12, 1997 between Olympic Financial Ltd.
and Norwest Bank Minnesota, National Association, as Trustee
4.2 First Supplemental Indenture, dated as of March 12, 1997 between
Olympic Financial Ltd. and Norwest Bank Minnesota, National
Association, as Trustee
4.3 Warrant Agreement, dated as of March 12, 1997 by and between
Olympic Financial Ltd. and Norwest Bank Minnesota, National
Association, as Warrant Agent
4.4 Form of Unit
4.5 Form of 11-1/2% Senior Note due March 15, 2007
4.6 Form of Initial Warrant Certificate
4.7 Second Supplemental Indenture dated as of March 11, 1997 to
Indenture dated as of April 28, 1995 between Olympic Financial Ltd.
and Norwest National Bank, National Association
10.1 Second Amendment to Credit Agreement entered into as of March 4,
1997 among Olympic Financial Ltd., the financial institutions
signatory thereto (the "Lenders") and Bank of America National
Trust and Savings Association, as agent for the Lenders.
2
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
March 17, 1997 OLYMPIC FINANCIAL LTD.
By: /s/ John A. Witham
--------------------------------------------
John A. Witham
Executive Vice President and Chief
Financial Officer
3
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INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Indenture dated as of March 12, 1997 between Olympic Financial Ltd.
and Norwest Bank Minnesota, National Association, as Trustee
4.2 First Supplemental Indenture, dated as of March 12, 1997 between
Olympic Financial Ltd. and Norwest Bank Minnesota, National
Association, as Trustee
4.3 Warrant Agreement, dated as of March 12, 1997 by and between
Olympic Financial Ltd. and Norwest Bank Minnesota, National
Association, as Warrant Agent
4.4 Form of Unit
4.5 Form of 11-1/2% Senior Note due March 15, 2007
4.6 Form of Initial Warrant Certificate
4.7 Second Supplemental Indenture dated as of March 11, 1997 to
Indenture dated as of April 28, 1995 between Olympic Financial Ltd.
and Norwest National Bank, National Association
10.1 Second Amendment to Credit Agreement entered into as of March 4,
1997 among Olympic Financial Ltd., the financial institutions
signatory thereto (the "Lenders") and Bank of America National
Trust and Savings Association, as agent for the Lenders.
4
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OLYMPIC FINANCIAL LTD.
to
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
_______________
SENIOR NOTES
______________
INDENTURE
Dated as of March 12, 1997
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OLYMPIC FINANCIAL LTD.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of March 12, 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
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(e) . . . . . . . . . . . . . . . . . . . . . . . . . 711
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.
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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. 27
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
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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
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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
Section 1310. Counterpart Originals. . . . . . . . . . . . . . . 73
Section 1311. Table of Contents, Headings, etc. . . . . . . . . 73
<PAGE>
INDENTURE, dated as of March 12, 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 NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, as Trustee (herein called the "Trustee"),
having its principal office at Norwest Bank Minnesota, National Association,
Corporate Trust Department, Norwest Center, Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479-0069.
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
<PAGE>
otherwise; PROVIDED that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"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.
<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 Financial Ltd. 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
Norwest Bank Minnesota, National Association, Corporate Trust Department,
Norwest Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota
55479-0069.
"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.
<PAGE>
"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.
"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
<PAGE>
Obligations or the balance deferred and unpaid of the purchase price of any
property or representing any Hedging Obligation, except any 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).
<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.
"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 in respect of which there shall have been presented to the
Trustee proof satisfactory to it that
<PAGE>
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).
<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.
<PAGE>
"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.
<PAGE>
"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.
<PAGE>
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.
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
<PAGE>
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 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,
<PAGE>
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 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
<PAGE>
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.
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,
<PAGE>
(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 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).
<PAGE>
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.
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:
<PAGE>
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.
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);
<PAGE>
(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 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;
<PAGE>
(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 election is made shall be payable, and the
periods within which and the terms and conditions upon which such election
is to be made; provided, however, that prior to the issuance of any such
Securities, the Company shall have obtained the written consent of the
Trustee, which consent
<PAGE>
may be withheld in the sole discretion of the Trustee, to the currency,
currencies, currency units or composite currencies;
(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 defease 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 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.
<PAGE>
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 any two
of the following officers: 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. 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
<PAGE>
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
(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;
<PAGE>
(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 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
<PAGE>
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 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.
<PAGE>
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
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
<PAGE>
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 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.
<PAGE>
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.
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
<PAGE>
"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).
(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.
<PAGE>
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 (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.
<PAGE>
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.
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.
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
<PAGE>
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 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
<PAGE>
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.
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.
<PAGE>
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 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)
<PAGE>
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 or agent of the Trustee or an affiliate of the
Trustee, the Security Registrar or co-registrar) 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 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
<PAGE>
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:
(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.
<PAGE>
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent, and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
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.
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
<PAGE>
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 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
<PAGE>
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.
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
<PAGE>
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;
(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 madewill 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.
<PAGE>
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 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
<PAGE>
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,
(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
<PAGE>
(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 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
<PAGE>
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
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
<PAGE>
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;
(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.
<PAGE>
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.
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:
<PAGE>
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;
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
<PAGE>
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
(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.
<PAGE>
(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 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
<PAGE>
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.
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.
<PAGE>
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.
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
<PAGE>
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 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
<PAGE>
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 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
<PAGE>
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 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.
<PAGE>
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
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.
<PAGE>
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 $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
<PAGE>
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
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.
<PAGE>
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 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,
<PAGE>
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 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
<PAGE>
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 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
<PAGE>
Section 902 or the Covenant Defeasance under Section 903 (as the case may
be) have been complied with as contemplated by this Section 904.
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
<PAGE>
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 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
<PAGE>
(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
(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
<PAGE>
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
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
<PAGE>
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 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.
<PAGE>
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 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
<PAGE>
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.
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.
<PAGE>
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 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.
<PAGE>
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 Securities of the same series and of
<PAGE>
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.
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.
<PAGE>
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.
(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
<PAGE>
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.
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.
<PAGE>
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.
<PAGE>
* * *
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 /s/ John A. Witham
------------------------------
John A. Witham, Executive Vice
President and Chief Financial
Officer
Attest:
/s/ James D. Atkinson III
- ---------------------------------------
James D. Atkinson III, Vice President,
Corporate Counsel and Secretary
[SEAL]
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By /s/ Curtis D. Schwegman
--------------------------------
Curtis D. Schwegman, Assistant
Vice President
<PAGE>
OLYMPIC FINANCIAL LTD.
To
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
First Supplemental Indenture
Dated as of March 12, 1997
to
Senior Notes Indenture
Dated as of March 12, 1997
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of March 12, 1997 (this
"Supplemental Indenture") 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 Norwest Bank Minnesota, National Association,
as Trustee (herein called the "Trustee") having its Corporate Trust office at
Norwest Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota
55479-0069, United States of America.
RECITALS OF THE COMPANY
The Company entered into an Indenture dated as of March 12, 1997
with the Trustee (the "Indenture") to provide for the issuance from time to time
of its notes or other evidences of indebtedness (herein generally called the
"Securities"), to be issued in one or more series as in the Indenture provided.
The Company proposes to issue a series of Securities denominated
its 11 1/2% Senior Notes due 2007 (the "Notes").
Sections 1001(v) and 1001(vii) of the Indenture provide that
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 the Indenture or enter into one or more indentures supplemental to the
Indenture to (1) add to, change or eliminate any of the provisions of the
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 benefits of such provision nor (B) modify the rights of the
Holders of any Security with respect to such provision or (ii) shall become
effective only when there is no such Security Outstanding and (2) establish the
form or terms of Securities of any series as permitted by Sections 201 and 301
thereof.
The entry into this Supplemental Indenture by the parties hereto is
in all respects authorized by the provisions of the Indenture.
All things necessary to make this Supplemental Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of Notes except as otherwise provided in
the Indenture or this Supplemental Indenture, as follows:
SECTION 1. The Indenture is hereby amended, solely with respect to
the Notes, as follows:
(a) By amending Section 101 to delete the definitions in the Indenture of
"Capital Stock," "Consolidated Net Worth," "Disqualified Stock," "Hedging
Obligations," "Indebtedness," "Person," "Subsidiary," "Warehouse Debt," and
"Warehouse Facilities" and add the following definitions of those terms:
"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
<PAGE>
(however designated) of corporate stock, (iii) in the case of a partnership or
limited liability company, partnership (whether general or limited) or
membership interests 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 Restricted 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, 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 Restricted Subsidiary of such
Person, (y) all Investments as of such date in unconsolidated Restricted
Subsidiaries and in Persons that are not Restricted Subsidiaries (except, in
each case, Permitted Investments), and (z) all unamortized debt discount and
expense and unamortized deferred charges as of such date, all of the foregoing
determined in accordance with GAAP.
"DISQUALIFIED STOCK" means any Capital Stock that either (A) 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, (i) matures or is mandatorily
redeemable, in whole or in part, pursuant to a sinking fund obligation or
otherwise or, (ii) is convertible into or exchangeable for Indebtedness or
Disqualified Stock in whole or in part, or (iii) is redeemable in whole or in
part, at the option of the Holder thereof at any time, in any such case, on or
prior to the date that is 91 days after the date on which the Notes mature, or
(B) is designated by the Company (in a resolution of the Board of Directors
delivered to the Trustee) as Disqualified Stock.
"HEDGING OBLIGATIONS" means, with respect to any Person, the obligations of
such Person under (i) interest rate or currency swap agreements, cap agreements,
collar agreements and related agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in value of
assets owned, financed or sold, or of liabilities incurred or assumed, or of
pre-funding arrangements, in any case in the ordinary course of business of such
Person and not for speculative purposes.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of (i) 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 Obligations, except
any 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, (ii) all indebtedness of others secured
by a Lien (except Liens on Receivables and other assets (including spread
accounts of a Special Purpose Entity incurred in connection with a Loan
Securitization)) on any asset of such Person (whether or not such indebtedness
is assumed by such Person), (iii) without duplication, all Warehouse Debt,
(iv) all obligations of such Person with respect to the redemption, repayment or
other repurchase of any
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<PAGE>
Disqualified Stock and, in the case of any Subsidiary Guarantor, preferred stock
(but excluding in each case any accrued dividends thereon), and (v) to the
extent not otherwise included, the Guarantee by such Person of any indebtedness
of any other Person to the extent of any Guarantee of such indebtedness provided
by such Person. Except in the case of Warehouse Debt (the amount of which shall
be determined in accordance with the definition thereof) and except in the case
of Hedging Obligations (the amount of which shall be determined on a net basis
after rights of set-off and related positions), the amount of Indebtedness of
any Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations at such date. Notwithstanding the foregoing, the term "Indebtedness"
does not include (i) obligations pursuant to representations, warranties,
covenants and indemnities in connection with a Loan Securitization or Warehouse
Facility or (ii) deposit liabilities of any Subsidiary, the deposits of which
are insured by the Federal Deposit Insurance Corporation or any successor
thereto.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"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 or limited liability company (a) the sole
general partner or the managing general partner or managing member of which is
such Person or a Subsidiary of such Person or (b) the only general partners or
managing members of which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).
"WAREHOUSE DEBT" means Indebtedness of the Company or a Restricted
Subsidiary of the Company equal to the greater of (x) the consideration received
by the Company or its Restricted Subsidiaries under a Warehouse Facility and
(y) in the case of a Purchase Facility, the book value of the Eligible
Receivables financed under such Warehouse Facility, until such time as such
Eligible Receivables are (i) securitized, (ii) repurchased by the Company or its
Restricted Subsidiaries or (iii) sold by the counterparty under the Warehouse
Facility to a Person who is not an Affiliate of the Company, including any
Guarantees issued by the Company or a Restricted Subsidiary of the Company in
connection therewith.
"WAREHOUSE FACILITY" means any funding arrangement, including Purchase
Facilities, with a financial institution or other lender or purchaser or any
conduit or special purpose vehicle used in connection with such funding
arrangement, to the extent (and only to the extent) that the Company or any of
its Restricted Subsidiaries incurs Warehouse Debt thereunder exclusively to
finance or refinance the purchase or origination of Receivables by the Company
or a Restricted Subsidiary of the Company prior to securitization.
(b) By amending Section 101 to add the following sentence as the last sentence
of the definition of "Affiliate":
3
<PAGE>
Notwithstanding the foregoing, no Person (other than the Company or any
Restricted Subsidiary of the Company) in whom a Special Purpose Entity makes an
Investment in connection with a Loan Securitization shall be deemed to be an
Affiliate of the Company or any of its Restricted Subsidiaries solely by reason
of such Investment.
(c) By amending Section 101 to add new definitions thereto, in the appropriate
alphabetical sequence, as follows:
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"ASSET SALE" means (i) the sale, lease, conveyance or other disposition of
any assets (including, without limitation, (x) by way of a sale and leaseback
and (y) the sale or other disposition of any Excess Spread) other than sales of
Receivables in connection with Loan Securitizations or Warehouse Facilities and
sales of repossessed assets in the ordinary course of business (PROVIDED that
the sale, lease, conveyance or other disposition of all or substantially all of
the assets of the Company and its Restricted Subsidiaries taken as a whole will
be governed by the provisions of Section 509 and/or the provisions of Section
601 and not by the provisions of Section 510), and (ii) the issue by the Company
or any of its Restricted Subsidiaries of Equity Interests, or the sale by the
Company or any Restricted Subsidiary of any Equity Interests, of their
Subsidiaries (other than directors qualifying shares), in the case of either
clause (i) or (ii), whether in a single transaction or a series of related
transactions (a) that have a fair market value in excess of $1.0 million or (b)
for net proceeds in excess of $1.0 million. Notwithstanding the foregoing, the
following will not be deemed to be Asset Sales: (i) an issuance of Equity
Interests by a Wholly-Owned Restricted Subsidiary of the Company to the Company
or to another Wholly-Owned Restricted Subsidiary of the Company; (ii) a
Restricted Payment that is permitted by Section 511; (iii) a pledge, or transfer
pursuant to a pledge, of assets, which pledge is a Permitted Lien; (iv) a
disposition by a Restricted Subsidiary of the Company to the Company or a
Wholly-Owned Restricted Subsidiary of the Company or by the Company to a
Wholly-Owned Restricted Subsidiary of the Company; and (v) leasing transactions
and other sales of goods and services in the ordinary course of business of a
Permitted Business.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (iii) certificates of deposit and eurodollar
time deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500.0 million and a Keefe Bank Watch Rating of "B" or
better, (iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above, (v) commercial paper having one of the two highest
ratings obtainable from Moody's Investors Service, Inc. or Standard & Poor's and
in each case maturing within nine months after the date of acquisition, and
(vi) money market funds, the portfolios of which are limited to investments
described in clauses (i) through (v) above.
4
<PAGE>
"CHANGE OF CONTROL" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation and excluding sales, leases, transfers, conveyances or
other dispositions pursuant to Loan Securitizations or Warehouse Facilities), in
one or a series of related transactions, of all or substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a whole to any
"person" (as such term is used in Section 13(d)(3) of the Exchange Act),
(ii) the adoption of a plan relating to the liquidation or dissolution of the
Company, (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the Voting Stock of the Company (measured by
general voting power rather than number of shares), (iv) the first day on which
a majority of the members of the Board of Directors of the Company are not
Continuing Directors or (v) the Company consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where the Voting
Stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance). For purposes of this definition, any
transfer of an equity interest of an entity that was formed for the purpose of
acquiring Voting Stock of the Company will be deemed to be a transfer of such
portion of such Voting Stock as corresponds to the portion of the equity of such
entity that has been so transferred.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONSOLIDATED LEVERAGE RATIO" as of any date of determination means the
ratio of (i) the aggregate amount of all consolidated Indebtedness of the
Company and its Restricted Subsidiaries excluding (A) Permitted Warehouse Debt,
(B) Hedging Obligations permitted to be incurred pursuant to clause (5) or (7)
of Section 512 hereof and (C) Indebtedness of a Special Purpose Entity permitted
to be incurred pursuant to clause (5) or (12)(A) of Section 512 hereof to
(ii) the Consolidated Net Worth of the Company.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
(for such period, on a consolidated basis, determined in accordance with GAAP);
PROVIDED, that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly-Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders; PROVIDED, that this clause (ii) shall not exclude Net Income, the
distribution of which is restricted solely by reason of spread account
requirements with respect to Special Purpose Entities or Warehouse Facilities or
limitations imposed by any Credit Enhancement Agreement or Warehouse Facility
that are permitted by Section 514 hereof, (iii) the Net Income of any Person
acquired in a
5
<PAGE>
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, and (iv) the cumulative effect of a change in
accounting principles shall be excluded.
"CONTINUING DIRECTORS" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the Issue Date or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
"CREDIT AGREEMENT" means any credit agreement entered into by and among the
Company (and, if the Company so elects, one or more Subsidiary Guarantors) and
one or more financial institutions, providing for revolving credit borrowings,
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time.
"CREDIT ENHANCEMENT AGREEMENTS" means, collectively, any documents,
instruments or agreements entered into by the Company, any of its Restricted
Subsidiaries or any Special Purpose Entities with any Person exclusively for the
purpose of providing credit support for Special Purpose Entities or any of their
respective Indebtedness (including, without limitation, Permitted Warehouse
Debt) or asset-backed securities, including, without limitation, insurance and
indemnity agreements with FSA.
"DEALER PARTICIPATIONS" means, for any period, the cash paid or payable to
originators of Receivables and other Persons by the Company or any of its
Restricted Subsidiaries, net of payments received by the Company or any of its
Restricted Subsidiaries from such Persons with respect to defaults and
prepayments on Receivables, during such period, as participations in connection
with the purchase of Receivables, including, without limitation, commissions
paid to brokers in connection with the foregoing.
"ELIGIBLE RECEIVABLES" means, at any time, Receivables which meet the sale
or loan eligibility criteria set forth in one or more of the Warehouse
Facilities to which the Company or any of its Restricted Subsidiaries is a party
at such time and is eligible for sale in a Loan Securitization.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire such Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, such Capital Stock).
"EXCESS SPREAD" means, over the life of a pool of Receivables that have
been sold by the Company or a Restricted Subsidiary to a Special Purpose Entity
or other Person in a Loan Securitization, the rights, other than servicing
rights, retained by the Company or such Restricted Subsidiary at or subsequent
to the closing of such securitization or sale with respect to such pool, to
receive cash flows attributable to such pool.
"FINANCE INCOME RECEIVABLE" of the Company means the capitalized asset
value of Excess Spread of the Company and its Restricted Subsidiaries appearing
from time to time on the consolidated balance sheet of the Company and its
Restricted Subsidiaries (including finance income receivable and restricted cash
in spread accounts), calculated in accordance with GAAP.
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<PAGE>
"GUARANTEE means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"INVESTMENT GRADE RATING" means a simultaneous Moody's Investors
Service, Inc. debt rating of Baa3 or higher (or the equivalent rating of any
Substitute Rating Agency) and a Standard & Poor's debt rating of BBB- or higher
(or the equivalent rating of any Substitute Rating Agency).
"INVESTMENT GRADE RATING EVENT" means, and shall be deemed to have occurred
on the first day on which, (i) the Notes have been and are assigned an
Investment Grade Rating and (ii) no Default or Event of Default has occurred and
is continuing under this Indenture.
"INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP; PROVIDED that
an acquisition of assets, Equity Interests or other securities by the Company
for consideration consisting of common equity securities of the Company shall
not be deemed to be an Investment.
"ISSUE DATE" means March 12, 1997.
"JUNIOR SUBORDINATED NOTES" means the Company's 30, 60, 90 and 180 day and
One Year Subordinated Extendible Notes and One, Two, Three, Four, Five and Ten
Year Subordinated Fixed-Term Notes issued under the Indenture dated July 1,
1994, as amended.
"LOAN SECURITIZATION" means a public or private transfer of Receivables in
the ordinary course of business of the Company and its Restricted Subsidiaries
and by which the Company or any such Restricted Subsidiary directly or
indirectly securitizes a pool of Receivables, including but not limited to any
such transaction involving the sale of specified Receivables to a Special
Purpose Entity.
"MINIMUM FINANCE INCOME RECEIVABLE" means Finance Income Receivable equal
to 200% of all Senior Indebtedness of the Company and its Restricted
Subsidiaries as of the time of creation of a Lien or the sale of Excess Spread,
as the case may be. Any determination of whether Finance Income Receivable is
greater or less than Minimum Finance Income Receivable shall be based on the
consolidated balance sheet of the Company and its Restricted Subsidiaries for
the most recently ended fiscal quarter for which financial statements are
available, after giving pro forma effect to the Asset Sale or Lien for which
such determination is being made and to any other sale of or Lien on Excess
Spread or reduction of Finance Income Receivable since the date of such balance
sheet.
"NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person
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<PAGE>
or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness
of such Person or any of its Restricted Subsidiaries and (ii) any extraordinary
or nonrecurring gain (but not loss), together with any related provision for
taxes on such extraordinary or nonrecurring gain (but not loss).
"NET PROCEEDS" means the aggregate Cash Equivalent proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any Cash Equivalent received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets that were
the subject of such Asset Sale and any reserve for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP.
"NON-RECOURSE DEBT" means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), or (b) is directly or indirectly liable (as a guarantor or
otherwise); and (ii) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"PERMITTED BUSINESSES" means any consumer or commercial finance business or
any financial service business, including but not limited to banks, savings and
loan associations, credit unions and other financial institutions operated in
conjunction therewith.
"PERMITTED INVESTMENTS" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company that is a Subsidiary Guarantor; (b) any
Investment in Cash Equivalents; (c) any Investment by the Company or any
Restricted Subsidiary of the Company in a Person if, as a result of such
Investment, (i) such Person becomes a Wholly-Owned Restricted Subsidiary of the
Company and a Subsidiary Guarantor that is engaged in a Permitted Business or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Wholly-Owned Restricted Subsidiary of the Company that is a
Subsidiary Guarantor and that is engaged in a Permitted Business; (d) any
Restricted Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with Section 510
hereof, (e) any Investment in Receivables, including Dealer Participations;
(f) Investments by the Company or any of its Subsidiaries in Special Purpose
Entities, in any Person owning residual interests in a Special Purpose Entity or
in repossessed assets, in each case in the ordinary course of business in
connection with or arising out of Loan Securitizations or Warehouse Facilities;
(g) purchases of all remaining outstanding asset-backed securities of any
Special Purpose Entity for the purpose of relieving the Company or a Subsidiary
of the Company of the administrative expense of servicing such Special Purpose
Entity, but only if 90% or more of the aggregate principal amount of the
original asset-backed securities of such Special Purpose Entity have previously
been retired; and (h) other Investments in any Person (other than an Affiliate
of the Company that is not also a Subsidiary of the Company) that do not exceed
$10.0 million at any time outstanding.
"PERMITTED LIENS" means (i) Liens on Receivables or other assets (other
than Excess Spread) securing Warehouse Debt or Hedging Obligations (or
Guarantees of Warehouse Debt or Hedging Obligations); (ii) Liens on Excess
Spread and on the Capital Stock of Restricted Subsidiaries of the
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Company substantially all of the assets of which are Excess Spread; PROVIDED,
HOWEVER, that, unless an Investment Grade Rating Event has occurred, any such
Liens may only so encumber Excess Spread in an amount which, in the aggregate,
does not exceed 50% of the amount by which Finance Income Receivable relating to
all Excess Spread exceeds Minimum Finance Income Receivable at the time of the
incurrence of such Lien; (iii) Liens in favor of the Company or any Restricted
Subsidiary; (iv) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Company or any Restricted Subsidiary of
the Company; PROVIDED that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company or
such Restricted Subsidiary; (v) Liens on property existing at the time of
acquisition thereof by the Company or any Restricted Subsidiary of the Company,
PROVIDED that such Liens were in existence prior to the contemplation of such
acquisition; (vi) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vii) Liens to secure Indebtedness
(including Capital Lease Obligations) permitted by clause (1) of the second
paragraph of Section 512 hereof covering only the assets acquired with such
Indebtedness; (viii) Liens existing on the Issue Date; (ix) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings, PROVIDED that
any reserve or other appropriate provision as shall be required in conformity
with GAAP shall have been made therefor; (x) Liens (including, without
limitation, Liens on spread accounts and any Excess Spread represented thereby)
in favor of a monoline insurance company or other provider of credit enhancement
pursuant to a Credit Enhancement Agreement; (xi) Liens incurred in the ordinary
course of business of the Company or any Restricted Subsidiary of the Company
with respect to obligations that do not exceed $1.0 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary; (xii) Liens
imposed by law, including but not limited to carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being contested in good
faith by appropriate proceedings or, other Liens arising out of judgments or
awards against the Company or any of its Restricted Subsidiaries with respect to
which the Company or such Restricted Subsidiary shall then be proceeding with an
appeal or other proceedings for review; (xiii) survey exceptions, easements and
other restrictions on the use of property, (xiv) Liens on assets of Unrestricted
Subsidiaries of the Company that secure Non-Recourse Debt of Unrestricted
Subsidiaries of the Company, (xv) Liens on cash collateral accounts (including
any Excess Spread represented thereby) established to satisfy the requirements
of a Warehouse Facility and (xvi) Liens on Receivables and other assets of a
Special Purpose Entity incurred in connection with a Loan Securitization.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness or Disqualified
Stock of the Company or any of its Restricted Subsidiaries issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness or Disqualified Stock of the Company or any
of its Restricted Subsidiaries; PROVIDED that: (i) the principal amount (or
accreted value, if applicable) or mandatory redemption amount of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable) or mandatory redemption amount, plus accrued interest or
dividends on, the Indebtedness or Disqualified Stock so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of contractual
prepayment charges and reasonable expenses incurred in connection therewith);
(ii) such Permitted Refinancing Indebtedness has a final maturity or final
redemption date later than the final maturity or final redemption date of, and
has a Weighted Average Life to Maturity equal to or greater than the
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Weighted Average Life to Maturity of, the Indebtedness or Disqualified Stock
being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if
the Indebtedness or Disqualified Stock being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness is subordinated in right of payment to,
the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness or Disqualified Stock
being extended, refinanced, renewed, replaced, defeased or refunded; and
(iv) such Indebtedness is incurred or such Disqualified Stock is issued either
by the Company or by the Restricted Subsidiary who is the obligor on the
Indebtedness or Disqualified Stock being extended, refinanced, renewed,
replaced, defeased or refunded.
"PERMITTED WAREHOUSE DEBT" means Warehouse Debt of the Company or a
Restricted Subsidiary of the Company outstanding under one or more Warehouse
Facilities (excluding any Guarantees issued by the Company or a Restricted
Subsidiary in connection therewith); PROVIDED, HOWEVER, that (i) the assets
purchased with proceeds of such Warehouse Debt are or, prior to any funding
under the Warehouse Facility with respect to such assets, were eligible to be
recorded as held for sale on the consolidated balance sheet of the Company and
its Restricted Subsidiaries in accordance with GAAP, (ii) such Warehouse Debt
will be deemed Permitted Warehouse Debt (a) in the case of a Purchase Facility,
only to the extent the holder of such Warehouse Debt has no contractual recourse
to the Company or any of its Restricted Subsidiaries to satisfy claims in
respect of such Warehouse Debt in excess of the realizable value of the Eligible
Receivables financed thereby, and (b) in the case of any other Warehouse
Facility, at the time such Warehouse Debt is incurred, only to the extent of the
lesser of (A) the amount advanced by the lender with respect to the Eligible
Receivables financed under such Warehouse Facility, and (B) 100% of the
aggregate principal amount of such Eligible Receivables (exclusive of all Dealer
Participations included therein) and (iii) any such Indebtedness incurred under
such Warehouse Facility has not been outstanding in excess of 364 days.
"PURCHASE FACILITY" means any Warehouse Facility in the form of a purchase
and sale facility pursuant to which the Company or a Restricted Subsidiary of
the Company sells Receivables to a financial institution, commercial paper
facility or conduit or Special Purpose Entity and retains a right of first
refusal or other repurchase arrangement upon the subsequent resale of such
Receivables by such financial institution, commercial paper facility or conduit
or Special Purpose Entity.
"RECEIVABLES" means installment sale contracts, loans evidenced by
promissory notes secured by assets, leases, mortgages or other finance
receivables or instruments acquired in connection with the operations of any
Permitted Business.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" means any Subsidiary other than an Unrestricted
Subsidiary.
"SPECIAL PURPOSE ENTITY" means any Person (whether or not a Subsidiary of
the Company) established and maintained exclusively for one or more of the
following purposes: (i) purchasing or otherwise acquiring Receivables (together
with any assets related to such Receivables, including, without limitation, all
collateral securing such Receivables, all contracts and all Guarantees or other
obligations in respect of such Receivables, proceeds of such Receivables and
other assets which are customarily transferred in connection with asset
securitization transactions involving Receivables) from the Company or any of
its Restricted Subsidiaries in connection with a Loan Securitization or
Warehouse Facility, (ii) selling such Receivables (and related assets) to a
special purpose owner trust
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or other Person in connection with a Loan Securitization or Purchase Facility,
(iii) serving as a conduit for the issuance of commercial paper in connection
with the operation of any Purchase Facility, (iv) issuing asset-backed
securities, (v) serving as a corporate general partner (or managing member of a
limited liability company) of another Special Purpose Entity, (vi) investing in
and holding Investments in Special Purpose Entities issuing securities backed by
Receivables originated by the Company or any Restricted Subsidiary of the
Company, or (vii) engaging in activities that are incidental to and necessary,
suitable or convenient for the accomplishment of the purposes specified above,
PROVIDED, HOWEVER, that the obligations of such Special Purpose Entity are
without recourse to the Company and any Restricted Subsidiary of the Company
other than such Special Purpose Entity, except to the extent of Indebtedness
incurred by the Company or a Subsidiary Guarantor in accordance with the first
paragraph of Section 512 hereof. For purposes of this definition, "without
recourse" shall mean that the Indebtedness of such Special Purpose Entity and
none of the other obligations (contingent or otherwise) of a Special Purpose
Entity (i) is guaranteed by the Company or any other Restricted Subsidiary of
the Company, (ii) obligates the Company or any other Restricted Subsidiary of
the Company in any way other than pursuant to representations, warranties,
covenants (including any covenant to deliver Receivables in a pre-funded Loan
Securitization) and indemnities entered into in connection with a Loan
Securitization or Warehouse Facility, or (iii) subjects any property or asset of
the Company or any other Restricted Subsidiary of the Company, directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to representations, warranties, covenants and indemnities entered into
in connection with a Loan Securitization or Warehouse Facility. For purposes of
the foregoing, a Permitted Investment in a Special Purpose Entity shall not be
deemed recourse. As of the Issue Date, each of Olympic Receivables Finance
Corp., Olympic Receivables Finance Corp. II, Arcadia Receivables Conduit Corp.,
Olympic First G.P. Inc., Olympic Second G.P. Inc. and Special Purpose Entities
formed in connection with any Loan Securitization prior to the Issue Date shall
be deemed to satisfy the requirements of this definition.
"SENIOR INDEBTEDNESS" means all Indebtedness of any Person that is not
subordinated in right of payment to any other Indebtedness or other obligations
of such Person, excluding Permitted Warehouse Debt and Hedging Obligations.
"SUBORDINATED NOTES" means the Junior Subordinated Notes and the 10.125%
Subordinated Notes, Series 1996-A due 2001, of the Company outstanding at the
Issue Date.
"SUBSIDIARY GUARANTOR" means any Subsidiary of the Company that executes a
Subsidiary Guarantee in accordance with the provisions of this Indenture.
"SUBSTITUTE RATING AGENCY" means, in the event that at any time either
Moody's Investors Service, Inc. or Standard & Poor's does not have a debt rating
in effect for the Notes, a nationally recognized statistical rating organization
designated by the Company with the approval of the Trustee as a substitute for
Moody's Investors Service, Inc. or Standard & Poor's, as the case may be.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution;
but only to the extent that such Subsidiary: (a) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary that those that might be obtained at the time from Persons
who are not Affiliates of the Company; (b) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect
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obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (c) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries; and (d) has at least one director
of its board of directors that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries and has at least one executive
officer that is not a director or executive officer of the Company or any of its
Restricted Subsidiaries. Any such designation by the Board of Directors shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and was
permitted by Section 511 hereof. If, at any time, any Unrestricted Subsidiary
would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section 512
hereof, the Company shall be in default of such covenant). The Board of
Directors of the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; PROVIDED that such designation shall be deemed to
be an incurrence of Indebtedness and issuance of preferred stock by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
and preferred stock is permitted under Section 512 hereof, (ii) such Subsidiary
becomes a Subsidiary Guarantor, and (iii) no Default or Event of Default would
be in existence following such designation.
"VOTING STOCK" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote generally in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
or Disqualified Stock at any date, the number of years obtained by dividing
(i) the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity (or final redemption, in the
case of Disqualified Stock), in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness or mandatory redemption amount of Disqualified Stock.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly-Owned Restricted
Subsidiaries of such Person and one or more Wholly-Owned Restricted Subsidiaries
of such Person.
(d) By deleting current clause (ii) of Section 505 and adding as new clause
(ii) of Section 505 the following:
(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
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has come to their attention which would lead them to believe that the Company
has violated any provisions of Sections 501, 506, 509, 510, 511, 512, 513, 514
or 515, if such covenants are then applicable, 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.
(e) By adding as new Section 509 the following:
Section 509. CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of Notes shall have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of purchase (the "Change of Control
Payment"). Within ten days following any Change of Control, the Company shall
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes on the date
specified in such notice, which date shall be no earlier than the earliest date
permitted under Rule 14e-1 under the Exchange Act ("Rule 14e-1") and no later
than 60 days from the date such notice is mailed (the "Change of Control Payment
Date"), pursuant to the procedures required by this Section 509 and described in
such notice. The notice, which shall govern the terms of the Change of Control
Offer, shall state:
(1) that the Change of Control Offer is being made pursuant to
this Section 509 and that all Notes tendered will be
accepted for payment;
(2) the Change of Control Payment and the Change of Control
Payment Date;
(3) that any Notes not tendered will continue to accrue interest
in accordance with the terms of this Indenture;
(4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have Notes purchased pursuant to
the Change of Control Offer will be required to surrender
their Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to
the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day preceding
the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of
business on the Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of Notes the Holder delivered for purchase, and a
statement that such Holder is withdrawing his election to
have such Notes purchased;
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(7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof; and
(8) the circumstances and relevant facts regarding such Change
of Control (including, but not limited to, information with
respect to PRO FORMA historical and, if available, projected
financial information after giving effect to such Change of
Control, information regarding the Person or Persons
acquiring control and such Person's or Persons' business
plans going forward).
The Company shall comply with the requirements of Rule 14e-1 and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section 509,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 509 by
virtue thereof.
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; PROVIDED that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 509 applicable to a Change of Control Offer made by the Company
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
Notwithstanding the foregoing, this Section 509 shall be of no further
force or effect and shall cease to apply upon and after the occurrence of an
Investment Grade Rating Event.
(f) By adding as new Section 510 the following:
Section 510. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by an
Officers' Certificate delivered to the Trustee and, with respect to any Asset
Sale involving
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consideration in excess of $5.0 million, a resolution of the Company's Board of
Directors) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 85% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of Cash Equivalents;
PROVIDED that the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any Guarantee thereof) that are
expressly assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Company or such Restricted Subsidiary from
further liability and (y) any currencies, securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee
that are converted by the Company or such Restricted Subsidiary into Cash
Equivalents within 30 days after receipt (to the extent of the cash received),
shall be deemed to be Cash Equivalents for purposes of this provision.
The Company or the Restricted Subsidiary, as the case may be, within
180 days after the receipt of any Net Proceeds from an Asset Sale subject to
this Section, may apply such Net Proceeds (a) to permanently reduce Senior
Indebtedness (other than the Notes or obligations of a Special Purpose Entity)
of the Company or of any Restricted Subsidiary, or (b) to (i) an Investment
(other than in Receivables that, at the time of purchase, are not Eligible
Receivables), or (ii) the purchase of Receivables that are, at the time of
purchase, Eligible Receivables (including payment of Dealer Participations), or
(iii) the making of any capital expenditure, or (iv) the acquisition of any
other tangible assets, in each case, in or with respect to a Permitted Business.
Pending the final application of any such Net Proceeds, the Company or such
Restricted Subsidiary may temporarily reduce the principal obligations
outstanding under any Warehouse Facility or otherwise invest such Net Proceeds
in any manner that is not prohibited by this Indenture. Any Net Proceeds from
Asset Sales that are not applied or invested as provided in the preceding
sentence of this paragraph will be deemed to constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall
be required to make an offer to all Holders of Notes (an "Asset Sale Offer") to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon to the date of
purchase, in accordance with this Section 510. Notwithstanding the foregoing,
if any Excess Spread or interest therein is sold or otherwise conveyed or
disposed of in an Asset Sale subject to this Section 510 and, immediately
thereafter, Finance Income Receivable relating to the remaining aggregate Excess
Spread not sold, conveyed or disposed of pursuant to such transaction (the
"Remaining Finance Income Receivable") would be less than Minimum Finance Income
Receivable, the Company shall be required to make an Asset Sale Offer in the
amount by which the Remaining Finance Income Receivable is less than Minimum
Finance Income Receivable (the "FIR Offer Amount"), without regard to the
application of the Net Proceeds of such sale by the Company pursuant to clause
(a) or (b) above; PROVIDED, that any Asset Sale Offer made pursuant to this
sentence shall be at an offer price of 101% of the principal amount of the Notes
plus accrued and unpaid interest thereon to the date of the purchase. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds or FIR Offer Amount, the Company or the
Restricted Subsidiary, as the case may be, may use any remaining Excess Proceeds
or FIR Offer Amount for general corporate purposes. If the aggregate principal
amount of Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds or FIR Offer Amount, the Trustee shall select the Notes to be purchased
on a pro rata basis. Upon completion of such Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero. The FIR Offer Amount shall be determined
separately for each Asset Sale of Excess Spread.
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The Asset Sale Offer shall remain open for the minimum period of time
required by Rule 14e-1 and no longer (the "Asset Sale Offer Period"). No later
than five Business Days after the termination of the Asset Sale Offer Period
(the "Asset Sale Purchase Date"), the Company shall purchase the principal
amount of Notes required to be purchased pursuant to this Section 510 (the
"Asset Sale Offer Amount") or, if less than the Asset Sale Offer Amount has been
tendered, all Notes tendered in response to the Asset Sale Offer.
If the Asset Sale Purchase Date is on or after an interest payment record
date and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
On or before the Asset Sale Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Asset Sale Offer Amount of Notes or portions thereof tendered pursuant to the
Asset Sale Offer, or if less than the Asset Sale Offer Amount has been tendered,
all Notes tendered, and deliver to the Trustee an Officers' Certificate stating
that such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 510. The Company, the Depositary or
the Paying Agent, as the case may be, shall, not later than five days after the
Asset Sale Purchase Date, mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall issue a new Note, and the
Trustee, upon delivery of an Officers' Certificate from the Company, shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of any Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on the Asset Sale Purchase Date.
The Company shall comply, to the extent applicable, with the requirements
of Rule 14e-1 and any other securities laws or regulations in connection with
the repurchase of Notes pursuant to this Section 510. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 510, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section 510 by virtue thereof.
Notwithstanding the foregoing, this Section 510 shall be of no further
force or effect and shall cease to apply upon and after the occurrence of an
Investment Grade Rating Event.
(g) By adding as new Section 511 the following:
Section 511. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company)
other than dividends or other payments or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or dividends or other
payments or distributions payable to the Company or any Wholly-Owned Restricted
Subsidiary of the Company; (ii) purchase, redeem or otherwise acquire or retire
for value (including, without limitation, any payment in connection with any
merger or
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consolidation involving the Company) any Equity Interests of the Company (other
than any such Equity Interests owned by any Wholly-Owned Restricted Subsidiary
of the Company) or any direct or indirect parent of the Company; (iii) make any
principal payment on or with respect to, purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes
(other than Hedging Obligations, Permitted Warehouse Debt or intercompany
Indebtedness payable to the Company or a Restricted Subsidiary of the Company by
any Restricted Subsidiary of the Company), except at final maturity or in
accordance with the mandatory redemption, sinking fund, purchase or repayment
provisions set forth in the documentation governing such Indebtedness when such
Indebtedness is incurred, or when such Indebtedness is amended at any time when
it could be incurred under the test set forth in the first paragraph of Section
512; or (iv) make any Restricted Investment (all such payments and other actions
set forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments"), unless, at the time of and after giving effect to such
Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the test set forth in
the first paragraph of Section 512 hereof; and
(c) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments permitted
by clauses (ii), (iii), (v), (vi) and (viii) of the next succeeding
paragraph), is less than the sum of (i) 25% of the aggregate cumulative
Consolidated Net Income of the Company for the period (taken as one
accounting period) from and after the last day of the first fiscal quarter
ending immediately following the Issue Date to the end of the Company's
most recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit); plus (ii) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale since the Issue Date of Equity Interests of
the Company (other than Disqualified Stock) or of Disqualified Stock or
Indebtedness represented by securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Subsidiary of
the Company and other than Disqualified Stock or other Indebtedness
represented by securities that have been converted into Disqualified
Stock); plus (iii) to the extent that any Restricted Investment that was
made after the Issue Date is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (A) the cash return of capital with respect
to such Restricted Investment (less the cost of disposition, if any) and
(B) the initial amount of such Restricted Investment.
The foregoing provisions will not prohibit the following Restricted
Payments: (i) the payment of (A) any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture or (B) any regular quarterly
dividend on the Common Stock not in excess of $0.01 per share per fiscal
quarter; (ii) the purchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a Subsidiary of
the Company) of other Equity Interests of the Company (other than any
Disqualified Stock); PROVIDED,
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that the amount of any such net cash proceeds that are utilized for such
redemption, repurchase, retirement or other acquisition shall be excluded from
clause (c)(ii) of the preceding paragraph; (iii) the payment of principal on, or
purchase, redemption, defeasance or other acquisition or retirement for value of
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness or the substantially concurrent sale (other than to a
Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); PROVIDED, that the amount of any such net cash proceeds
from any such sale of Equity Interests that are utilized for such redemption,
repurchase, retirement or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph; (iv) the redemption of Indebtedness or
preferred stock that is redeemable at the option of the Company and convertible
by its terms into Common Stock, and which was permitted to be incurred or issued
by the terms of this Indenture; PROVIDED, that at the time such securities are
called for redemption the number of shares of Common Stock which a holder of
such securities would receive upon such holder's conversion of such securities
to Common Stock multiplied by the closing bid or comparable market price of the
Common Stock on the principal securities exchange for such Common Stock on the
Business Day immediately preceding the day such Indebtedness or preferred stock
is called for redemption would exceed 120% of the redemption price to be paid by
the Company for such Indebtedness or preferred stock in connection with such
redemption; (v) in the absence of a Default or Event of Default which has
occurred or would occur as a consequence thereof, scheduled dividends and
mandatory redemptions, repurchases or sinking fund payments with respect to
Disqualified Stock or preferred stock of a Subsidiary Guarantor, which, when
issued, was permitted to be issued pursuant to the first paragraph of Section
512; (vi) in the absence of a Default or Event of Default which has occurred or
would occur as a consequence thereof, principal payments, purchases,
redemptions, defeasance or other acquisition or retirement for value of any
Junior Subordinated Notes permitted to be incurred pursuant to clause (11) of
the second paragraph of Section 512; (vii) payments (A) in an amount not to
exceed $1.0 million in the aggregate during any fiscal year of the Company (plus
any such amount not utilized in any prior fiscal year) in connection with the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interest of the Company held by an employee or director of the Company or
any of its Subsidiaries, related to compensation or severance arrangements or
(B) of withholding taxes due or paying exercise prices in connection with
exercises of options for Common Stock by such persons with such Common Stock as
consideration therefor; (viii) the making and consummation of any offer to
repurchase any Indebtedness upon the occurrence of a change of control under and
as defined in the documents governing such Indebtedness; PROVIDED, that in
connection with Indebtedness incurred after the Issue Date, the definition of
"change of control" is the same in all material respects as the definition of
"Change of Control" set forth in this Indenture and payments pursuant thereto
are not required to be made prior to the date on which the Change of Control
Payment is required to be made under this Indenture or, with respect to any
Indebtedness subordinated in right of payment to the Notes, no sooner than 30
days after the date such Change of Control Offer is required to be made;
(ix) any purchase, redemption or other acquisition or retirement for value of
Equity Interests issued pursuant to the Company's stockholder rights plan, as
the same may be amended from time to time; and (x) payment of cash in lieu of
fractional shares of common stock that otherwise would be issuable upon exercise
of warrants to purchase common stock.
If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of in an amount determined as provided in the
second succeeding paragraph below.
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The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated shall be deemed to be Restricted Payments at the
time of such designation and shall reduce the amount available for Restricted
Payments under the first paragraph of this Section 511. All such outstanding
Investments shall be deemed to constitute Investments in an amount equal to the
fair market value of such Investments at the time of such designation. Such
designation shall only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments other than cash shall be the fair
market value (evidenced by an Officers' Certificate on the date of the
Restricted Payment) of the asset(s) or securities proposed to be transferred or
issued by the Company or such Restricted Subsidiary, as the case may be,
pursuant to the Restricted Payment. The fair market value of any non-cash
Restricted Payment in excess of $1.0 million shall be determined by the Board of
Directors whose resolution with respect thereto shall be delivered to the
Trustee, such determination to be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if such
fair market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 511 were
computed.
Notwithstanding the foregoing, this Section 511 shall be of no further
force or effect and shall cease to apply upon and after the occurrence of an
Investment Grade Rating Event.
(h) By adding as new Section 512 the following:
Section 512. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guaranty or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) or issue
Disqualified Stock, and that the Company shall not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock except for preferred stock
issued to and held by the Company or any Wholly-Owned Restricted Subsidiary of
the Company, PROVIDED that any subsequent issuance or transfer of Capital Stock
that results in such Wholly-Owned Restricted Subsidiary ceasing to be a
Wholly-Owned Restricted Subsidiary of the Company or any subsequent transfer of
such preferred stock (other than to the Company or any of its Wholly-Owned
Restricted Subsidiaries) shall be deemed, in each case, to constitute the
issuance of such preferred stock by the issuer thereof; PROVIDED, HOWEVER, that
the Company or any Subsidiary Guarantor may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock and any Subsidiary Guarantor may
issue preferred stock if, on the date of such incurrence or issuance and after
giving effect thereto, the Consolidated Leverage Ratio does not exceed 2.0 to
1.0.
The foregoing provisions shall not apply to:
(1) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each
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case incurred for the purpose of financing all or any part of the purchase price
or cost of construction or improvement of property used in the business of the
Company or such Restricted Subsidiary, in an aggregate principal amount not to
exceed $10.0 million at any time outstanding;
(2) the existence of Warehouse Facilities, regardless of amount, and
the incurrence of Permitted Warehouse Debt by the Company or any of its
Restricted Subsidiaries; PROVIDED, HOWEVER, that to the extent any such
Indebtedness of the Company or a Restricted Subsidiary of the Company ceases to
constitute Permitted Warehouse Debt, to such extent such Indebtedness shall be
deemed to be incurred by the Company or such Restricted Subsidiary of the
Company, as the case may be, at such time;
(3) the incurrence by the Company or any of its Restricted Subsidiaries
of intercompany Indebtedness owing to the Company or any of its Restricted
Subsidiaries; PROVIDED, HOWEVER, that (i)(A) any subsequent issuance or transfer
of any Capital Stock which results in any such Indebtedness being held by a
Person other than a Restricted Subsidiary of the Company and (B) any sale or
transfer of any such Indebtedness to a Person that is not either the Company or
a Restricted Subsidiary of the Company, shall be deemed, in each case, to
constitute the incurrence of such Indebtedness by the Company or such Restricted
Subsidiary, as the case may be, (ii) any Indebtedness of the Company to any
Restricted Subsidiary of the Company is permitted by the provisions of Section
511 hereof and (iii) if the Company is the obligor on such Indebtedness, such
Indebtedness is either (A) owed solely to a Special Purpose Entity in connection
with a Loan Securitization or Warehouse Facility or (B) expressly subordinated
to the prior payment in full in cash of all obligations with respect to the
Notes;
(4) the incurrence by the Company of Indebtedness represented by the
Notes and by the Subsidiary Guarantors of Subsidiary Guarantees;
(5) Indebtedness of the Company, any of its Restricted Subsidiaries or
any Special Purpose Entity outstanding on the Issue Date;
(6) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness with respect to Indebtedness that was
permitted by this Indenture to be incurred or that was outstanding at the Issue
Date; PROVIDED, that Permitted Refinancing Indebtedness with respect to
clauses (1), (2), (3), (7) or (12) of this paragraph (and Indebtedness of like
character outstanding on the Issue Date) would otherwise be permitted to be
incurred pursuant to such clauses, as applicable;
(7) the incurrence by the Company or any of its Restricted Subsidiaries
of Hedging Obligations directly related to (i) Indebtedness of the Company or a
Restricted Subsidiary of the Company that was permitted by this Indenture to be
incurred, (ii) Receivables held by the Company or its Restricted Subsidiaries
pending sale in a Loan Securitization, (iii) Receivables of the Company or its
Restricted Subsidiaries that have been sold pursuant to a Warehouse Facility; or
(iv) Receivables that the Company or a Restricted Subsidiary of the Company
reasonably expects to purchase or commit to purchase, finance or accept as
collateral; PROVIDED, HOWEVER, that, in the case of each of the foregoing
clauses (i) through (iv), such Hedging Obligations are eligible to receive hedge
accounting treatment in accordance with GAAP as applied by the Company and its
Restricted Subsidiaries on the Issue Date;
(8) the incurrence of Acquired Debt by the Company or any of its
Restricted Subsidiaries in an aggregate principal amount not to exceed $10.0
million at any one time outstanding (reduced by
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the amount of Acquired Debt repaid with Net Proceeds of Asset Sales of the
Restricted Subsidiary acquired subject to such Acquired Debt) that is without
recourse to the Company or any of its Restricted Subsidiaries or any of their
respective assets (other than the Restricted Subsidiary acquired subject to such
Acquired Debt), and is not guaranteed by any such Person; PROVIDED, that at the
time of such incurrence, the Restricted Subsidiary acquired subject to such
Acquired Debt becomes a Subsidiary Guarantor;
(9) the Guarantee by the Company or any of the Subsidiary Guarantors of
the Indebtedness of the Company or another Subsidiary Guarantor that was
permitted to be incurred by another provision of this Section 512;
(10) the incurrence by the Company or any Subsidiary Guarantor of
Indebtedness under a Credit Agreement in an aggregate principal amount at any
time outstanding not to exceed $10.0 million;
(11) the incurrence by the Company of Indebtedness which is expressly
subordinated in right of payment to the Notes in an aggregate principal amount
at any time outstanding not to exceed the sum of $75.0 million, PROVIDED,
HOWEVER, that the extension or roll-over of the Junior Subordinated Notes will
not reduce the amount of Indebtedness that may be incurred pursuant to this
clause (11);
(12) (A) the incurrence by a Special Purpose Entity of Indebtedness in
connection with a Loan Securitization; PROVIDED, HOWEVER, that if and to the
extent (and only to the extent) any such Indebtedness ceases to be "without
recourse" (as defined in the definition of "Special Purpose Entity"), such
Indebtedness shall be deemed to be incurred by a Restricted Subsidiary of the
Company at such time; and (B) the issuance by a Special Purpose Entity of
preferred stock representing a residual interest in such Special Purpose Entity;
and
(13) (A) the incurrence by an Unrestricted Subsidiary of the Company of
Non-Recourse Debt (including, without limitation, Non-Recourse Debt that would
constitute Permitted Warehouse Debt if incurred by a Restricted Subsidiary of
the Company); PROVIDED, HOWEVER, that if any such Indebtedness ceases to be
Non-Recourse Debt of the Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted Subsidiary of the
Company; and (B) the issuance by an Unrestricted Subsidiary of the Company of
preferred stock.
The Company shall not, and shall not permit any Subsidiary Guarantor to,
incur any Indebtedness that is contractually subordinated to any Indebtedness of
the Company or any such Subsidiary Guarantor unless such Indebtedness is also
contractually subordinated to the Notes, or the Subsidiary Guarantee of such
Subsidiary Guarantor (as applicable), on substantially identical terms;
PROVIDED, HOWEVER, that no Indebtedness shall be deemed to be contractually
subordinated to any other Indebtedness solely by virtue of being unsecured.
For purposes of determining compliance with this Section 512, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Indebtedness described in clauses (1) through (13) above or is
entitled to be incurred pursuant to the first paragraph of this Section 512, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this Section 512 and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof.
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Notwithstanding the foregoing, this Section 512 shall be of no further
force or effect and shall cease to apply upon and after the occurrence of an
Investment Grade Rating Event.
(i) By adding as new Section 513 the following:
Section 513. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens. Notwithstanding the foregoing, this Section 513 shall be
of no further force or effect and shall cease to apply upon and after the
occurrence of an Investment Grade Rating Event.
(j) By adding as new Section 514 the following:
Section 514. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(A) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (B) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries, except for such encumbrances
or restrictions existing under or by reason of (a) Warehouse Facilities as in
effect as of the Issue Date, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, additions (including additional
Warehouse Facilities), replacements or refinancings thereof, PROVIDED that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, additions, replacements or refinancings are no more restrictive with
respect to such dividend and other payment restrictions than those contained in
the Warehouse Facilities as in effect on the Issue Date, (b) applicable law,
(c) any instrument governing Acquired Debt or Capital Stock of a Person acquired
by the Company or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Acquired Debt was incurred or such
Capital Stock was issued or its terms amended in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the property or assets of any Person, other than
the Person or the property or assets of the Person, so acquired, PROVIDED that
such Person is not taken into account in determining on a pro forma basis
whether such acquisition subject to such Acquired Debt was permitted by the
terms of this Indenture, (d) by reason of customary non-assignment provisions in
leases entered into in the ordinary course of business and consistent with past
practices, (e) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, (f) Credit Enhancement Agreements,
(g) the requirements of any Loan Securitization that are exclusively applicable
to any Special Purpose Entity or (h) Permitted Refinancing Indebtedness;
PROVIDED that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive than those contained
in the agreements governing the Indebtedness being refinanced. Notwithstanding
the foregoing, this Section 514 shall be
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of no further force or effect and shall cease to apply upon and after the
occurrence of an Investment Grade Rating Event.
(k) By adding as new Section 515 the following:
Section 515. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing actions, considered separately, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, an opinion as to the fairness
to the Company or such Restricted Subsidiary of such Affiliate Transaction from
a financial point of view issued by an accounting, appraisal or investment
banking firm of national standing; PROVIDED that Affiliate Transactions shall
not include (A) any employment agreement, stock option, employee benefit,
indemnification, compensation (including the payment of reasonable fees to
directors of the Company or its Restricted Subsidiaries who are not employees of
the Company or its Restricted Subsidiaries), business expense reimbursement or
other employment-related agreement, arrangement or plan entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of business
of the Company or such Restricted Subsidiary, (B) transactions between or among
the Company and/or its Restricted Subsidiaries not otherwise prohibited by this
Indenture, (C) loans or advances to employees in the ordinary course of business
of the Company or its Restricted Subsidiaries, but in any event not to exceed
$500,000 in aggregate principal amount outstanding at any one time,
(D) Restricted Payments that are permitted by the provisions of Section 511
hereof and Permitted Investments and (E) transactions, arising out of and in
connection with either a Loan Securitization or the incurrence of Permitted
Warehouse Debt, between the Company or any Restricted Subsidiary of the Company,
on the one hand, and a Special Purpose Entity or Warehouse Facility or any
Person (other than an Affiliate of the Company that is not a Subsidiary of the
Company) which owns an interest in a Special Purpose Entity or Warehouse
Facility, on the other hand. Notwithstanding the foregoing, this Section 515
shall be of no further force and effect and shall cease to apply upon and after
the occurrence of an Investment Grade Rating Event.
(l) By adding as new Section 516 the following:
Section 516. NO AMENDMENT TO SUBORDINATION PROVISIONS.
Without the consent of the Holders of 90% of the Notes outstanding, the
Company shall not amend, modify or alter the terms of the Subordinated Notes to
(i) increase the rate of or change the time for payment of interest on such
Subordinated Notes, (ii) increase the principal of, advance the
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final maturity date of or shorten the maturity of such Subordinated Notes,
(iii) increase the redemption price or alter the other redemption provisions or
increase the price or modify the other terms at which the Company is required to
offer to purchase such Subordinated Notes or (iv) amend any of the provisions
governing subordination of such Subordinated Notes in a manner adverse to the
Holders of the Notes; PROVIDED, that no such consent will be required if, at the
effective time of any such amendment, modification or alteration, the Company
would be permitted to incur such amended, modified or altered Subordinated Notes
under Section 512 hereof. Notwithstanding the foregoing, this Section 516 shall
be of no further force and effect and shall cease to apply upon and after the
occurrence of an Investment Grade Rating Event.
(m) By adding as new Section 517 the following:
Section 517. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses. Notwithstanding the
foregoing, this Section 517 shall be of no further force or effect and shall
cease to apply upon and after the occurrence of an Investment Grade Rating
Event.
(n) By adding as new Section 518 the following:
Section 518. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of Notes that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement. Notwithstanding the foregoing, this Section 518 shall be of no
further force and effect and shall cease to apply on and after the occurrence of
an Investment Grade Rating Event.
(o) By adding the following subparagraph (v) to Section 504:
(v) So long as any Notes are outstanding and until the occurrence of an
Investment Grade Rating Event, the Company will furnish to the Holders of Notes,
either on the face of the financial statements or the footnotes thereto or in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the financial condition, results of operations and statements of
cash flow of the Company and its Restricted Subsidiaries separate from those of
the Company's Unrestricted Subsidiaries.
(p) By adding as new Section 519 the following:
Section 519. SUBSIDIARY GUARANTEES.
The Company shall not, and shall not permit any of the Subsidiary
Guarantors to, make any Investment in any Subsidiary of the Company that is not
a Subsidiary Guarantor unless either (i) such Investment is permitted by Section
511 (including Investments in Special Purpose Entities), or (ii) such
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Subsidiary executes a Subsidiary Guarantee and delivers an opinion of counsel in
accordance with the provisions of this Indenture.
(q) By deleting current Section 601 and adding as new Section 601 the
following:
Section 601. MERGER, CONSOLIDATION OR SALE 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 corporation 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 Notes 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 (A) 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 (B) will, at the
time of such transaction and after giving pro forma effect thereto, be permitted
to incur at least $1.00 of additional Indebtedness pursuant to the first
paragraph of Section 512, if such covenant is then applicable.
(r) By deleting current Section 701 and adding as new Section 701 the
following:
Section 701. EVENTS OF DEFAULT.
"EVENT OF DEFAULT", wherever used herein with respect to the
Notes, 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):
(i) default for 30 days in the payment when due of interest on the
Notes;
(ii) default in payment when due of principal of or premium, if any, on
the Notes;
(iii) failure by the Company to comply with the provisions of Sections
509, 510, 511, 512, 513, 517 or 601 hereof;
(iv) failure by the Company for 60 days after notice to comply with any
of its other agreements in this Indenture or the Notes;
(v) 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
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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;
(vi) 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 period of 60 days;
(vii) the Company or any Subsidiary of the Company pursuant to or within
the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(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;
(viii) a 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
(ix) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be invalid or unenforceable or shall
cease for any reason to be in full force and effect or any Subsidiary Guarantor
or any Person acting on behalf of any Subsidiary Guarantor shall deny or
disaffirm its obligations under its Subsidiary Guarantee.
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.
26
<PAGE>
A Default under clause (iv) is not an Event of Default with respect
to the Notes until the Trustee notifies the Company in writing, or the Holders
of at least 25% in principal amount of the then outstanding Notes 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 occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
the optional redemption provisions contained in the form of Note attached as
EXHIBIT A hereto, an equivalent premium shall also become and be immediately due
and payable to the extent permitted by law upon the acceleration of the Notes.
If an Event of Default occurs prior to March 15, 2002 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Notes prior to
March 15, 2002, then, in addition to all amounts otherwise payable with respect
to such Notes, a premium with respect thereto (expressed as a percentage of the
amount that would otherwise be due but for the provisions of this sentence),
shall also become and be immediately due and payable to the extent permitted by
law upon the acceleration of the Notes if such Notes are repaid during the
12-month period beginning on March 15 of the years set forth below:
YEAR PERCENTAGE
---- ----------
1998 111.50
1999 110.06
2000 108.63
2001 107.19
(s) By deleting current Section 702 and adding as new Section 702 the
following:
Section 702. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clauses (vii) or (viii) of Section 701) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in principal amount of the
then outstanding Notes by written notice to the Company and the Trustee, may
declare the unpaid principal of, premium, if any, and any accrued and unpaid
interest on the Notes to be due and payable. Upon such declaration the
principal, premium, if any, and interest shall be due and payable immediately.
If an Event of Default specified in clause (vii) or (viii) 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 as the part of the Trustee or any Holder. The Holders of a majority in
principal amount of the Notes then outstanding 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 the Notes (except nonpayment of principal or interest that has become
due solely as a result of such acceleration) have been cured or waived.
(t) By deleting current Section 1001 and adding as new Section 1001 the
following:
Section 1001. WITHOUT CONSENT OF HOLDERS.
27
<PAGE>
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 the Notes or enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(i) 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;
(ii) to provide for uncertificated Notes in addition to or in place of
certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code);
(iii) to provide for the assumption of the Company's obligations to
Holders of Notes in the case of a merger or consolidation;
(iv) to make any change that would provide any additional rights or
benefits to the Holders of Notes;
(v) to make any change that does not adversely affect the legal rights
under this Indenture of any Holder of Notes;
(vi) to comply with requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the TIA; or
(vii) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Notes 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).
(u) By deleting current Section 1002 and adding as new Section 1002 the
following:
Section 1002. WITH CONSENT OF HOLDERS.
With the consent of the Holders of at least a majority principal amount of
the Notes then outstanding (including, without limitation, consent obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes), 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
the Notes or enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Notes; and any existing default or compliance with any provision
of this Indenture or the Notes may be waived with the consent of the Holders of
a majority in principal amount of then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes);
provided, however, that no such amendment or supplemental indenture shall (with
respect to any Notes held by a non-consenting Holder), without the consent of
each Holder of Notes affected thereby:
28
<PAGE>
(i) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to the redemption of the Notes (other than
provisions relating to Sections 509 and 510 hereof);
(iii) reduce the rate of or change the time for payment of interest on
any Note;
(iv) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the payment default that resulted
from such acceleration);
(v) make any Note payable in money other than that stated in the Notes;
(vi) make any change in the provisions of this Indenture relating to
waiver of past Defaults or the rights of Holders of Notes to receive payments of
principal of or premium, if any, or interest on the Notes;
(vii) waive a redemption payment with respect to any Note (other than a
payment required by Section 509 or 510 hereof); or
(viii) make any change in the foregoing amendment and waiver provisions.
(v) By renumbering current Article 12 as Article 13 and adding as new Article
12 the following:
ARTICLE 12
SUBSIDIARY GUARANTEES
Section 1201. SUBSIDIARY GUARANTEES.
Subject to the provisions of this Article 12, each Subsidiary Guarantor,
jointly and severally, hereby unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, that: (a) the principal of, and premium, if any, and
interest on the Notes shall be duly and punctually paid in full when due,
whether at maturity, by acceleration or otherwise, and interest on overdue
principal, and premium, if any, on the Notes and all other obligations of the
Company to the Holders or the Trustee hereunder or under the Notes (including
fees, expenses or other) shall be promptly paid in full or performed, all in
accordance with the terms hereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, the same shall
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or failing
performance of any other obligation of the Company to the Holders, for whatever
reason, each Subsidiary Guarantor shall be obligated to pay, or to perform or to
cause the performance of, the same immediately. An Event of Default under this
Indenture or the Notes shall constitute an event of default under this
Subsidiary Guarantee, and shall entitle the Trustee or the Holders of Notes to
accelerate the obligations of each Subsidiary Guarantor hereunder in the same
manner and to the same extent as the obligations of the Company.
29
<PAGE>
Each Subsidiary Guarantor hereby agrees that its obligations hereunder shall be
unconditional to the extent permitted by applicable laws, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any thereof, the entry of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Subsidiary
Guarantor. Each Subsidiary Guarantor hereby waives and relinquishes: (a) any
right to require the Trustee, the Holders or the Company (each, a Benefitted
Party") to proceed against the Company, its Subsidiaries or any other Person or
to proceed against or exhaust any security held by a Benefitted Party at any
time or to pursue any other remedy in any secured party's power before
proceeding against the Subsidiary Guarantors; (b) any defense that may arise by
reason of the lack of authority of any other Person or Persons or the failure of
a Benefitted Party to file or enforce a claim against the estate (in bankruptcy
or any other proceeding) of any other Person or Persons; (c) demand, protest and
notice of any kind (except as expressly required by this Indenture), including,
but not limited to, notice of the existence, creation or incurring of any new or
additional Indebtedness or obligation or of any action or non-action on the part
of the Subsidiary Guarantors, the Company, the Subsidiaries of the Company, any
Benefitted Party, any creditor of the Subsidiary Guarantors, the Company or the
Subsidiaries of the Company or on the part of any other Person whomsoever in
connection with any obligations the performance of which are hereby guaranteed;
(d) any defense based upon an election of remedies by a Benefitted Party,
including, but not limited to, an election to proceed against the Subsidiary
Guarantors for reimbursement; (e) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal; (f) any
defense arising because of a Benefitted Party's election, in any proceeding
instituted under the Bankruptcy Law, of the application of Section 1111(b)(2) of
the Bankruptcy Code; and (g) any defense based on any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code. The Subsidiary
Guarantors hereby covenant that the Subsidiary Guarantees shall not be
discharged except by payment in full of all principal, premium, if any, and
interest on the Notes and all other costs provided for under this Indenture, or
as provided in Section 901.
If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or the Subsidiary Guarantors, or any trustee or
similar official acting in relation to either the Company or the Subsidiary
Guarantors, any amount paid by the Company or the Subsidiary Guarantors to the
Trustee or such Holder, the Subsidiary Guarantees, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each of the
Subsidiary Guarantors agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Subsidiary Guarantor agrees that, as between it, on the one hand, and the
Holders of Notes and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 7 hereof
for the purposes hereof, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article 7 hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by such Subsidiary Guarantor for
the purpose of the Subsidiary Guarantee.
Section 1202. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
30
<PAGE>
To evidence the Subsidiary Guarantees set forth in Section 1201 hereof,
each of the Subsidiary Guarantors agrees that this Indenture shall be executed
on behalf of such Subsidiary Guarantor and that a notation of such Subsidiary
Guarantee substantially in the form included in EXHIBIT B hereto shall be
endorsed on each Note thereafter authenticated and delivered by the Trustee.
Such execution and any such endorsement shall be executed on behalf of such
Subsidiary Guarantor by any two of the following officers: the Chairman of the
Board, the President, the Chief Executive Officer, the Chief Operating Officer,
the Chief Financial Officer or one of the Vice Presidents of the Subsidiary
Guarantor. The signature of any of these officers on the Notes may be manual or
facsimile.
Each of the Subsidiary Guarantors agrees that its Subsidiary Guarantee set
forth in this Article 12 will remain in full force and effect and apply to all
the Notes notwithstanding any failure to endorse on each Note a notation of any
such Subsidiary Guarantee.
If an Officer of a Subsidiary Guarantor whose facsimile signature is on a
Note no longer holds that office at the time the Trustee authenticates the Note
on which such Subsidiary Guarantee is endorsed, such Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of any Subsidiary Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantors.
Section 1203. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Nothing contained in this Indenture or in the Notes shall prevent
any consolidation or merger of a Subsidiary Guarantor with or into the Company
or a Wholly-Owned Restricted Subsidiary of the Company. Upon any such
consolidation or merger, the Subsidiary Guarantee of such Subsidiary Guarantor
shall no longer have any force or effect, provided that the surviving Person in
any such consolidation or merger shall be or become a Subsidiary Guarantor if
such Person would, by virtue of Investments in such Person, be required to
become a Subsidiary Guarantor pursuant to Section 519 of this Indenture.
(b) Except as provided in Section 1203(a) hereof, no Subsidiary
Guarantor may consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the surviving Person) another Person, whether or not
affiliated with such Subsidiary Guarantor, unless (i) subject to the provisions
of Section 1204 hereof, the Person formed by or surviving any such consolidation
or merger (if other than such Subsidiary Guarantor) assumes all the obligations
of such Subsidiary Guarantor, pursuant to a supplemental indenture in form and
substance satisfactory to the Trustee, under this Indenture; (ii) immediately
after giving effect to such transaction no Default or Event of Default exists;
(iii) such Subsidiary Guarantor, or any Person formed by or surviving any such
consolidation or merger, would have Consolidated Net Worth (immediately after
giving effect to such transaction) equal to or greater than the Consolidated Net
Worth of such Subsidiary Guarantor immediately preceding the transaction, and
(iv) the Company would be permitted, immediately after giving effect to such
transaction, to incur at least $1.00 of additional Indebtedness pursuant to the
first paragraph of Section 512. In case of any such consolidation or merger and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of any
Subsidiary Guarantees endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by such successor Person, such successor Person shall succeed to and
be substituted for such Subsidiary Guarantor with
31
<PAGE>
the same effect as if it had been named herein as a Subsidiary Guarantor. Such
successor Person thereupon may cause to be signed any Subsidiary Guarantee to be
endorsed upon Notes issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee. All the Subsidiary
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Subsidiary Guarantees theretofore and thereafter
issued in accordance with the terms of this Indenture as though all of such
Subsidiary Guarantees had been issued at the date of the execution hereof.
(c) The Trustee, subject to the provisions of Section 1204 hereof,
shall be entitled to receive an Officers' Certificate and an Opinion of Counsel
as conclusive evidence that any such consolidation or merger and any such
assumption of obligations, comply with the provisions of this Section 1203.
Section 1204. RELEASES FOLLOWING SALE OF ASSETS.
In the event of a sale or other disposition of all of the assets of any
Subsidiary Guarantor (other than to the Company or a Wholly-Owned Restricted
Subsidiary of the Company), by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the Capital Stock of such Subsidiary
Guarantor (other than to the Company or a Wholly-Owned Restricted Subsidiary of
the Company), then such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
Capital Stock of such Subsidiary Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all of the assets of
such Subsidiary Guarantor) shall be released from and relieved of any
obligations under its Subsidiary Guarantee; PROVIDED that the Net Proceeds from
such sale or other disposition are applied in accordance with the provisions of
Section 510 hereof. Upon delivery by the Company to the Trustee of an Officer's
Certificate and Opinion of Counsel, to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation, Section 510 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any such Subsidiary Guarantor from its obligations under its Subsidiary
Guarantee. Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of such Subsidiary Guarantor
under this Indenture as provided in this Article 12.
Section 1205. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the guarantee by such
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law. To effectuate the foregoing intention, the
Holders and each such Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under this Article 12 shall be limited
to the maximum amount as will, after giving effect to all of the liabilities of
such Subsidiary Guarantor, result in the obligations of such Subsidiary
Guarantor under the Subsidiary Guarantee of such Subsidiary Guarantor not
constituting a fraudulent transfer or conveyance.
(w) By renumbering current Article 13 as Article 14 and adding as new Section
1412 the following:
32
<PAGE>
Section 1412. NOTICES.
Any notice or communication by the Company or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
Olympic Financial Ltd.
7825 Washington Avenue South
Minneapolis, Minnesota 55439
Telecopier No.: (612) 996-0671
Attention: General Counsel
With a copy to:
Dorsey & Whitney LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, Minnesota 55402
Telecopier No.: (612) 340-2868
Attention: Rick Swanson
If to the Trustee:
Norwest Bank Minnesota, National Association
Norwest Center
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479-0069
Telecopier No.: (612) 667-9825
Attention: Corporate Trust
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a
33
<PAGE>
notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
(x) By amending the table of contents in the Indenture to reflect the additions
described in subsections (a) through (v) of this Section 1.
SECTION 2. The Notes shall be substantially in the form of EXHIBIT A
hereto, which form is hereby incorporated in and made a part of this
Supplemental Indenture. Subject to Section 306 of the Indenture, the Notes
shall be in an aggregate principal amount of $300,000,000. Each Note shall be
dated the date of its authentication. The Notes shall be in denominations of
$1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Supplemental Indenture, and the Company
and the Trustee, by their execution and delivery of this Supplemental Indenture,
expressly agree to such terms and provisions and to be bound thereby.
SECTION 3. The Notes shall be subject to the defeasance provisions of
Sections 902 and 903 of the Indenture.
SECTION 4. Except as specifically supplemented and amended by this
Supplemental Indenture, the terms and provisions of the Indenture shall remain
in full force and effect. The Indenture, as supplemented and amended by this
Supplemental Indenture and all other indentures supplemental thereto, is in all
respects ratified and confirmed, and the Indenture, this Supplemental Indenture
and all indentures supplemental thereto shall be read, taken and construed as
one and the same instrument.
SECTION 5. To the extent of any conflict between the provisions of the
Indenture and the Supplemental Indenture, the provisions of the Supplemental
Indenture shall govern. If any provision hereof limits, qualifies or conflicts
with another provision hereof which is required to be included in this
Supplemental Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control.
SECTION 6. All covenants and agreements in this Supplemental Indenture by
the Company shall bind its successors and assigns, whether so expressed or not.
SECTION 7. In case any provision in this Supplemental Indenture or in the
Securities of any series shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions (or of the
other series of Securities) shall not in any way be affected or impaired
thereby.
34
<PAGE>
SECTION 8. Nothing in this Supplemental Indenture, expressed or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Holders of the Notes, any benefit or any legal or equitable
right, remedy or claim under this Supplemental Indenture.
SECTION 9. THIS SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND THIS SUPPLEMENTAL
INDENTURE AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
SECTION 10. All terms used in this Supplemental Indenture and not
otherwise defined herein that are defined in the Indenture shall have the
meanings set forth therein.
SECTION 11. This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
SECTION 12. The recitals contained herein and in the Notes, except the
certificate of authentication of the Trustee thereon, shall be taken as
statements of the Company, and the Trustee assumes no responsibility for their
accuracy or completeness. The Trustee make no representations as to the
validity or sufficiency of the Indenture, this Supplemental Indenture or of the
Notes and shall not be accountable for the use or application by the Company of
the Notes or the proceeds thereof.
35
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first written
above.
OLYMPIC FINANCIAL LTD.
By: /s/ John A. Witham
----------------------------------------------
Name: John A. Witham
Title: Executive Vice President and
Chief Financial Officer
Attest
By: /s/ James D. Atkinson III
------------------------------
Name: James D. Atkinson III
Title: Vice President, Corporate
Counsel and Secretary
SEAL
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ Curtis D. Schwegman
----------------------------
Name: Curtis D. Schwegman
Title: Assistant Vice President
S-1
<PAGE>
SUBSIDIARY GUARANTEE
The Subsidiary Guarantor listed below (hereinafter referred to as the
"Subsidiary Guarantor," which term includes any successors or assigns under the
Indenture dated as of March 12, 1997, by and between Olympic Financial Ltd., a
Minnesota corporation (the "Company"), and Norwest Bank Minnesota, National
Association, as Trustee (the "Trustee"), as amended by that certain First
Supplemental Indenture dated as of March 12, 1997, by and between the Company
and the Trustee (as so amended, the "Indenture") and any additional Subsidiary
Guarantor), has irrevocably and unconditionally guaranteed (i) the due and
punctual payment of the principal of, premium, if any, and interest on the 11
1/2% Senior Notes due 2007 (the "Notes") of the Company, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on overdue
principal and premium, if any, on the Notes, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms set forth in Article 12 of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Notes or any such other obligations, the prompt payment in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
The obligations of the Subsidiary Guarantor to the Holder and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 12 of the Indenture and reference is hereby made to such
Indenture for the precise terms of this Guarantee.
No shareholder, officer, director, manager, member, organizer or
incorporator, as such, past, present or future of the Subsidiary Guarantor shall
have any liability under this Subsidiary Guarantee by reason of his or its
status as such shareholder, officer, director, member, manager, organizer or
incorporator.
This is a continuing guarantee and shall remain in full force and effect
and shall be binding upon the Subsidiary Guarantor and its successors and
assigns until full and final payment of all of the Company's obligations under
the Notes and Indenture and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders, and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
This is a guarantee of payment and not of collectibility.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the execution and delivery of the Indenture on behalf of the Subsidiary
Guarantor.
The obligations of the Subsidiary Guarantor under this Subsidiary Guarantee
shall be limited to the maximum amount as will, after giving effect to all of
the liabilities of the Subsidiary Guarantor, result in such obligations not
constituting a fraudulent conveyance.
THE TERMS OF ARTICLE 12 OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized terms used herein have the same meanings given in the Indenture
unless otherwise indicated.
B-1
<PAGE>
EXHIBIT B
FORM OF SUBSIDIARY
GUARANTEE
[Name of Subsidiary Guarantor]
By:
-------------------------------
Name:
Title:
Dated as of
------------------,----
Attest:
B-2
<PAGE>
- --------------------------------------------------------------------------------
WARRANT AGREEMENT
Dated as of March 12, 1997
by and between
OLYMPIC FINANCIAL LTD.
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Warrant Agent
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
WARRANT AGREEMENT
TABLE OF CONTENTS**
Page
SECTION 1. Appointment of Warrant Agent. . . . . . . . . . . . . . . . 1
SECTION 2. Issuance of Warrants. . . . . . . . . . . . . . . . . . . . 1
SECTION 3. Warrant Certificates. . . . . . . . . . . . . . . . . . . . 1
SECTION 4. Execution of Warrant Certificates . . . . . . . . . . . . . 2
SECTION 5. Transfers of Warrants Prior to the Separation of Warrants
and Notes; Separation of Warrants and Notes . . . . . . . . 2
SECTION 6. Registration and Countersignature . . . . . . . . . . . . . 3
SECTION 7. Registration of Transfers and Exchanges . . . . . . . . . . 3
(a) Transfer and Exchange of Definitive Warrants . . . . . . 3
(b) Exchange or Transfer of a Definitive Warrant for a
Beneficial Interest in a Global Warrant. . . . . . . . . 4
(c) Transfer and Exchange of Global Warrants . . . . . . . . 4
(d) Exchange of a Beneficial Interest in a Global Warrant
for a Definitive Warrant . . . . . . . . . . . . . . . . 4
(e) Restrictions on Transfer and Exchange of Global
Warrants . . . . . . . . . . . . . . . . . . . . . . . . 4
(f) Countersigning of Definitive Warrants in Absence of
Depositary . . . . . . . . . . . . . . . . . . . . . . . 5
(g) Cancellation of Global Warrant . . . . . . . . . . . . . 5
(h) Obligations with Respect to Transfers and Exchanges of
Warrants . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 8. Terms of Warrants; Exercise of Warrants . . . . . . . . . . 5
SECTION 9. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 10. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . 7
SECTION 11. Mutilated or Missing Warrant Certificates. . . . . . . . . 7
SECTION 12. Reservation of Warrant Shares. . . . . . . . . . . . . . . 7
- ---------------
** This Table of Contents does not constitute a part of this Agreement or have
any bearing upon the interpretation of any of its terms or provisions.
(ii)
<PAGE>
SECTION 13. Obtaining Stock Exchange Listings . . . . . . . . . . . . . . . 8
SECTION 14. Adjustment of Exercise Price and Number of Warrant Shares
Issuable. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Adjustment for Change in Capital Stock. . . . . . . . . . . . 8
(b) Adjustment for Rights Issue . . . . . . . . . . . . . . . . . 9
(c) Adjustment for Other Distributions. . . . . . . . . . . . . . 10
(d) Adjustment for Common Stock Issue.. . . . . . . . . . . . . . 11
(e) Adjustment for Convertible Securities Issue . . . . . . . . . 12
(f) Current Market Price. . . . . . . . . . . . . . . . . . . . . 13
(g) Consideration Received. . . . . . . . . . . . . . . . . . . . 13
(h) When De Minimis Adjustment May Be Deferred. . . . . . . . . . 14
(i) When No Adjustment Required . . . . . . . . . . . . . . . . . 14
(j) Notice of Adjustment. . . . . . . . . . . . . . . . . . . . . 14
(k) Voluntary Reduction . . . . . . . . . . . . . . . . . . . . . 15
(l) Notice of Certain Transactions. . . . . . . . . . . . . . . . 15
(m) Reorganization of the Company . . . . . . . . . . . . . . . . 15
(n) Company Determination Final . . . . . . . . . . . . . . . . . 16
(o) Warrant Agent's Disclaimer. . . . . . . . . . . . . . . . . . 16
(p) When Issuance or Payment May Be Deferred. . . . . . . . . . . 16
(q) Adjustment in Number of Shares. . . . . . . . . . . . . . . . 16
(r) Form of Warrants. . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 15. No Dilution or Impairment . . . . . . . . . . . . . . . . . . . 17
SECTION 16. Fractional Interests. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 17. Notices to Warrant Holders. . . . . . . . . . . . . . . . . . . 18
SECTION 18. Merger, Consolidation or Change of Name of Warrant Agent. . . . 19
SECTION 19. Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 20. Registration Rights . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 21. Change of Warrant Agent . . . . . . . . . . . . . . . . . . . . 23
SECTION 22. Notices to the Company and Warrant Agent. . . . . . . . . . . . 24
SECTION 23. Supplements and Amendments. . . . . . . . . . . . . . . . . . . 25
SECTION 24. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 25. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 26. Governing Law; Jurisdiction . . . . . . . . . . . . . . . . . . 25
(iii)
<PAGE>
SECTION 27. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . 25
SECTION 28. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 29. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . 26
EXHIBIT A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
(iv)
<PAGE>
WARRANT AGREEMENT, dated as of March 12, 1997, between Olympic
Financial Ltd., a Minnesota corporation (the "COMPANY"), and Norwest Bank
Minnesota, National Association, as warrant agent (the "WARRANT AGENT").
WHEREAS, the Company has entered into an underwriting agreement (the
"UNDERWRITING AGREEMENT"), dated March 7, 1997 with Donaldson, Lufkin & Jenrette
Securities Corporation, J.P. Morgan & Co. and Bear, Stearns & Co. Inc. (the
"UNDERWRITERS") in which the Company has agreed to sell to the Underwriters
300,000 units (the "UNITS"), consisting of $300,000,000 principal amount of the
Company's 11 1/2% Senior Notes due 2007 (the "NOTES") and 300,000 Warrants, as
hereinafter described (each, a "WARRANT"), to purchase an aggregate of 2,052,000
shares of Common Stock, par value $0.01 per share (the "COMMON STOCK"), of the
Company (the Common Stock issuable upon exercise of the Warrants being referred
to herein as the "WARRANT SHARES"). The Notes will be issued pursuant to an
indenture (the "INDENTURE") between the Company and Norwest Bank Minnesota,
National Association, as trustee (the "TRUSTEE"). Each Unit consists of one
$1,000 Note and one Warrant. Each Warrant entitles the holder of the Warrant
upon exercise to receive from the Company, as adjusted as provided herein, 6.84
fully paid and nonassessable shares of Common Stock of the Company in exchange
for the Exercise Price of $11.00, subject to adjustment under certain
circumstances, as provided herein;
WHEREAS, the Warrants and the Notes will be sold in units and shall
not be separately transferable until the earliest to occur of (i) one year from
the date of issuance of the Notes and (ii) such other date as may be designated
by Donaldson, Lufkin & Jenrette Securities Corporation (the "SEPARATION DATE");
and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance of Warrant Certificates (as hereinafter defined) and other matters as
provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. ISSUANCE OF WARRANTS. Warrants shall be originally issued
in connection with the issuance of the Units and shall not be separately
transferable from the Notes until on or after the Separation Date as provided in
Section 5 hereof.
SECTION 3. WARRANT CERTIFICATES. The Warrants will be issued in
global form (the "GLOBAL WARRANTS"), substantially in the form of Exhibit A
(including the text accompanying footnotes 1 and 2 thereto but excluding such
footnotes), and in definitive form (the "DEFINITIVE WARRANTS"), substantially in
the form of Exhibit A (not including footnotes 1 and 2 thereto or the text
accompanying such footnotes). Each Definitive Warrant shall represent such of
the outstanding Warrants as shall be specified therein and each Global Warrant
shall provide that it shall represent the aggregate amount of outstanding
Warrants from time to time endorsed thereon and that the aggregate amount of
outstanding Warrants represented thereby may from time to time be reduced or
increased, as appropriate. Any endorsement of a Global Warrant to reflect the
amount of any increase or decrease in the amount of outstanding Warrants
represented thereby shall be made by the Warrant Agent and the depositary with
respect to the Global Warrants (the "DEPOSITARY") in accordance with
instructions given by the holder thereof. The Depository Trust Company shall
act as the Depositary until a successor shall be appointed by the Company and
the Warrant Agent. Upon request, a holder may receive from the Depositary and
<PAGE>
the Warrant Agent separate Definitive Warrants as set forth in Section 7 below.
Any certificates (the "WARRANT CERTIFICATES") evidencing the Global Warrants or
the Definitive Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto.
SECTION 4. EXECUTION OF WARRANT CERTIFICATES. Warrant Certificates
shall be signed 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. Each such signature upon the
Warrant Certificates may be in the form of a facsimile signature of the present
or any future Chairman of the Board, President Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer, or Vice President and may be
imprinted or otherwise reproduced on the Warrant Certificates and for that
purpose the Company may adopt and use the facsimile signature of any person who
shall have been Chairman of the Board, President, Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer, or Vice President, notwithstanding
the fact that at the time the Warrant Certificates shall be countersigned and
delivered or disposed of he or she shall have ceased to hold such office.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer.
Warrant Certificates shall be dated the date of countersignature by
the Warrant Agent.
SECTION 5. TRANSFERS OF WARRANTS PRIOR TO THE SEPARATION OF WARRANTS
AND NOTES; SEPARATION OF WARRANTS AND NOTES. Notwithstanding the provisions of
Section 7 hereof, on or after the Separation Date, the registered holder of a
Warrant Certificate containing a Warrant Legend (as hereinafter defined) may
surrender such Warrant Certificate accompanied by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, duly executed
by the registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney to the Warrant Agent, at
its corporate trust office in Norwest Bank Minnesota, National Association,
Northstar Building, 608 Second Avenue South, Minneapolis 55402 (the "WARRANT
AGENT OFFICE") for the exchange of such Warrant containing a Warrant Legend, in
whole or in part, for a new Warrant Certificate or Warrant Certificates not
containing the first paragraph of the Warrant Legend (such surrender and
exchange being referred to herein as a "SEPARATION" and the related Warrants
being referred to as "SEPARATED").
Until the Separation Date, no Warrant may be sold, assigned or
otherwise transferred to any person unless simultaneously with such transfer,
the Warrant Agent receives confirmation from the Trustee, that the holder
thereof has requested a transfer to the same transferee of one Warrant (subject
to adjustment under Section 14 hereof) for each $1,000 in aggregate principal
amount of Notes so transferred. In connection with the foregoing, upon original
issuance (if prior to the Separation Date) and, thereafter, until Separation,
the Warrant Certificates will bear the following legend (the "WARRANT LEGEND"):
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE
SEPARATELY FROM THE COMPANY'S 11 1/2% SENIOR NOTES DUE
2
<PAGE>
2007 (THE "NOTES") ORIGINALLY SOLD AS A UNIT WITH SUCH WARRANTS UNTIL THE
EARLIEST TO OCCUR OF (I) ONE YEAR FROM THE DATE OF ISSUANCE OF THE NOTES OR
(II) SUCH OTHER DATE AS MAY BE DESIGNATED BY DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION (THE "SEPARATION DATE").
THE COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF THE COMPANY (THE
"COMMON STOCK") FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") AND ANY APPLICABLE STATE SECURITIES
LAWS OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS.
ACCORDINGLY, NO WARRANT HOLDER SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S
WARRANTS AT ANY TIME UNLESS, AT THE TIME OF EXERCISE, (i) A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT RELATING TO THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THIS WARRANT (THE "WARRANT SHARES") HAS BEEN
FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC"), AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF
SUCH REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC OR (ii) THE ISSUANCE
OF THE WARRANT SHARES IS PERMITTED PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
SECTION 6. REGISTRATION AND COUNTERSIGNATURE. The Warrant Agent, on
behalf of the Company, shall number and register the Warrant Certificates in a
register as they are issued by the Company.
Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board,
President Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer or Vice President of the Company, initially countersign and deliver
Warrants entitling the holders thereof to purchase not more than the number of
Warrant Shares referred to above in the first recital hereof and shall
countersign and deliver Warrants as otherwise provided in this Agreement.
The Company and the Warrant Agent may deem and treat the registered
holder(s) of the Warrant Certificates as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for all purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
SECTION 7. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS. When Definitive
Warrants are presented to the Warrant Agent with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of Definitive
Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if its requirements for such transactions are met; PROVIDED, HOWEVER, that the
Definitive Warrants presented or surrendered for
3
<PAGE>
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Warrant Agent, duly
executed by the holder thereof or by his attorney, duly authorized in writing.
Upon any such registration of transfer, a new Definitive Warrant shall be issued
to the transferee(s) and the surrendered Definitive Warrant shall be cancelled
by the Warrant Agent. Cancelled Definitive Warrants shall thereafter be
disposed of in a manner satisfactory to the Company.
(b) EXCHANGE OR TRANSFER OF A DEFINITIVE WARRANT FOR A BENEFICIAL
INTEREST IN A GLOBAL WARRANT. A Definitive Warrant may be exchanged for a
beneficial interest in a Global Warrant upon satisfaction of the requirements
set forth below. Upon receipt by the Warrant Agent of a Definitive Warrant,
duly endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Warrant Agent, together with written instructions directing
the Warrant Agent to make, or to direct the Depositary to make, an endorsement
on the Global Warrant to reflect an increase in the number of Warrants
represented by the Global Warrant, then the Warrant Agent shall cancel such
Definitive Warrant and cause, or direct the Depositary to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Warrant Agent, the number of Warrants represented by the Global Warrant
to be increased accordingly. If no Global Warrants are then outstanding, the
Company shall issue and the Warrant Agent shall countersign a new Global Warrant
representing the appropriate number of Warrants and Warrant Shares.
(c) TRANSFER AND EXCHANGE OF GLOBAL WARRANTS. The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Warrant Agreement and the
procedures of the Depositary therefor.
(d) EXCHANGE OF A BENEFICIAL INTEREST IN A GLOBAL WARRANT FOR A
DEFINITIVE WARRANT.
(i) Any person having a beneficial interest in a Global Warrant may upon
request exchange such beneficial interest for a Definitive Warrant.
Upon receipt by the Warrant Agent of written instructions or such
other form of instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any person having a beneficial
interest in a Global Warrant then the Warrant Agent shall cause, in
accordance with the standing instructions and procedures existing
between the Depositary and Warrant Agent, the number of Warrants
represented by the Global Warrant to be reduced and, following such
reduction, the Company shall execute and the Warrant Agent shall
countersign and deliver to the transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial interest in a
Global Warrant pursuant to this Section 7(d) shall be registered in
such names as the Depositary, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Warrant
Agent. The Warrant Agent shall deliver such Definitive Warrants to
the persons in whose names such Warrants are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL WARRANTS.
Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 7), a Global Warrant may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
4
<PAGE>
(f) COUNTERSIGNING OF DEFINITIVE WARRANTS IN ABSENCE OF DEPOSITARY.
If at any time:
(i) the Depositary for the Global Warrants notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the
Global Warrants and a successor Depositary for the Global Warrants is
not appointed by the Company within 90 days after delivery of such
notice; or
(ii) the Company, in its sole discretion, notifies the Warrant Agent in
writing that it elects to cause the issuance of Definitive Warrants
under this Warrant Agreement,
then the Company shall execute, and the Warrant Agent, upon written instructions
signed by two officers of the Company, shall countersign and deliver Definitive
Warrants, in an aggregate number equal to the number of Warrants represented by
Global Warrants, in exchange for such Global Warrants.
(g) CANCELLATION OF GLOBAL WARRANT. At such time as all beneficial
interests in Global Warrants have either been exchanged for Definitive Warrants,
redeemed, repurchased or cancelled, all Global Warrants shall be returned to or
retained and cancelled by the Warrant Agent.
(h) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF WARRANTS.
(i) To permit registrations of transfers and exchanges, the Company shall
execute and the Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of Section 6 and this Section 7,
Definitive Warrants and Global Warrants as required pursuant to the
provisions of this Section 7.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration of transfer or exchange of Definitive Warrants or Global
Warrants shall be the valid obligations of the Company, entitled to
the same benefits under this Warrant Agreement, as the Definitive
Warrants or Global Warrants surrendered upon such registration of
transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any Warrant,
the Warrant Agent and the Company may deem and treat the person in
whose name any Warrant is registered as the absolute owner of such
Warrant and neither the Warrant Agent nor the Company shall be
affected by notice to the contrary.
(iv) No service charge shall be made to a holder for any registration,
transfer or exchange.
SECTION 8. TERMS OF WARRANTS; EXERCISE OF WARRANTS. Subject to the
terms of this Agreement, each Warrant holder shall have the right, which may be
exercised on or after the Separation Date until 5:00 p.m., New York, New York
time on March 15, 2007 (the "EXPIRATION DATE"), to exercise each Warrant and
receive from the Company the number of fully paid and nonassessable Warrant
Shares which the holder may at the time be entitled to receive on exercise of
such Warrants and payment of the Exercise Price then in effect for such Warrant
Shares; PROVIDED, HOWEVER, that no Warrant holder shall be entitled to exercise
such holder's Warrants at any time unless, at the time of exercise, (i) a
registration statement under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), relating to the Warrant Shares has been filed with, and
declared effective by, the Securities and Exchange Commission (the "SEC"), and
no stop order suspending the effectiveness of such registration statement has
been issued by the SEC or (ii) the issuance of the Warrant Shares is permitted
pursuant to an exemption from the
5
<PAGE>
registration requirements of the Securities Act. Each Warrant, when exercised,
will entitle the holder thereof to purchase 6.84 fully paid and nonassessable
shares of Common Stock at the Exercise Price. Any Warrant not exercised prior
to 5:00 p.m., New York City time, on the Expiration Date shall become void and
all rights thereunder and all rights in respect thereof under this Agreement
shall cease as of such time. No adjustments as to dividends will be made upon
exercise of the Warrants.
The Warrants may be exercised by surrendering to the Warrant Agent the
Warrant Certificates evidencing the Warrants to be exercised with the
accompanying form of election to purchase properly completed and executed,
together with payment of the Exercise Price. Payment of the Exercise Price may
be made in the form of cash or by certified or official bank check payable to
the order of the Company.
Subject to the provisions of Section 10 hereof, upon such surrender of
Warrants and payment of the Exercise Price, the Company shall issue and cause to
be delivered with all reasonable dispatch to or upon the written order of the
holder and in such name or names as the Warrant holder may designate, a
certificate or certificates for the number of full Warrant Shares issuable upon
the exercise of such Warrants together with cash, if any, as provided in Section
16 hereof; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale
of assets is proposed to be effected by the Company as described in subsection
(m) of Section 14 hereof, [or a tender offer or an exchange offer for shares of
Common Stock of the Company shall be made], upon such surrender of Warrants and
payment of the Exercise Price as aforesaid, the Successor Guarantor (as
hereinafter defined), the Company or the Warrant Agent, as applicable, shall, as
soon as possible, but in any event not later than two business days thereafter,
issue and cause to be delivered the full number of Warrant Shares issuable upon
the exercise of such Warrants in the manner described in this sentence together
with cash, if any, as provided in Section 16 hereof. Such certificate or
certificates shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrants and payment of
the Exercise Price. No fractional shares shall be issued upon exercise of any
Warrants in accordance with Section 16 hereof. The Company will pay to the
holder of the Warrant at the time of exercise an amount in cash equal to the
current market value of any such fractional share of Common Stock less a
corresponding fraction of the Exercise Price.
The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part (in whole shares) and, in
the event that a certificate evidencing Warrants is exercised in respect of
fewer than all of the Warrant Shares issuable on such exercise at any time prior
to the Expiration Date, a new certificate evidencing the remaining Warrant or
Warrants will be issued, and the Warrant Agent is hereby irrevocably authorized
to countersign and to deliver the required new Warrant Certificate or
Certificates pursuant to the provisions of this Section and of Section 4 of this
Agreement, and the Company, whenever required by the Warrant Agent, will supply
the Warrant Agent with Warrant Certificates duly executed on behalf of the
Company for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants shall
be cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall be
held by the Warrant Agent until termination of its duties hereunder, at which
time it shall deliver such cancelled Warrants to any successor Warrant Agent, if
applicable, otherwise to the Company. Upon receipt by the Company, such
cancelled Warrant Certificates shall then be disposed of by the Company in
accordance with applicable law. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently pay to the Company
all monies received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants.
6
<PAGE>
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the holders during
normal business hours at its office. The Company shall supply the Warrant Agent
from time to time with such numbers of copies of this Agreement as the Warrant
Agent may request.
SECTION 9. REPORTS. Whether or not required by the rules and
regulations of the SEC, so long as any Warrants are outstanding, the Company
shall furnish to the Warrant Agent and mail to the holders of Warrants (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company will file a copy of all such information and reports with the SEC for
public availability (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request.
SECTION 10. PAYMENT OF TAXES. No service charge shall be made to any
holder of a Warrant for any exercise, exchange or registration of transfer of
Warrant Certificates, and the Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants or to any Separation; PROVIDED, HOWEVER, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue of any Warrant Certificates or any certificates for
Warrant Shares in a name other than that of the registered holder of a Warrant
Certificate surrendered upon the exercise of a Warrant, and the Company shall
not be required to issue or deliver such Warrant Certificates unless or until
the person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
SECTION 11. MUTILATED OR MISSING WARRANT CERTIFICATES. If any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
may in its discretion issue and the Warrant Agent may countersign, in exchange
and substitution for and upon cancellation of the mutilated Warrant Certificate,
or in lieu of and in substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity and security therefor, if requested, also
satisfactory to them. Applicants for such substitute Warrant Certificates shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe.
SECTION 12. RESERVATION OF WARRANT SHARES. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or authorized and issued
Common Stock held in its treasury, for the purpose of enabling it to satisfy any
obligation to issue Warrant Shares upon exercise of Warrants, the maximum number
of shares of Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.
The Company or the transfer agent for the Common Stock (the "COMMON
STOCK TRANSFER AGENT") and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase represented by the Warrants will be irrevocably authorized and directed
at all times to reserve such number of authorized shares as shall be required
for such purpose.
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The Company will keep a copy of this Agreement on file with the Common Stock
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Common Stock Transfer Agent the stock
certificates required to honor outstanding Warrants upon exercise thereof in
accordance with the terms of this Agreement. The Company will supply such
Common Stock Transfer Agent with duly executed certificates for such purposes
and will provide or otherwise make available any cash which may be payable as
provided in Section 16 hereof. The Company will furnish such Common Stock
Transfer Agent a copy of all notices of adjustments and certificates related
thereto, transmitted to each holder pursuant to Section 17 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 14 hereof to reduce the Exercise Price below the then par value (if any)
of the Warrant Shares, the Company will take all corporate action necessary, in
the opinion of its counsel (which may be counsel employed by the Company), in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares at the Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will be, upon payment of the Exercise Price and issuance
thereof, fully paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the issue thereof.
SECTION 13. OBTAINING STOCK EXCHANGE LISTINGS. The Company shall also
from time to time take all action necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed on
the New York Stock Exchange or other principal securities exchanges and markets
within the United States of America, if any, on which other shares of Common
Stock are then listed.
SECTION 14. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
ISSUABLE. The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 14. For purposes of this
Section 14, "COMMON STOCK" means the Common Stock and any other stock of the
Company, however designated, that has the right (subject to any prior rights of
any class or series of preferred stock) to participate in any distribution of
the assets or earnings of the Company without limit as to per share amount.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
If the Company:
(1) pays a dividend or makes a distribution on its Common Stock
in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
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<PAGE>
(4) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares of
its capital stock,
then the Exercise Price and the number and kind of shares of capital stock of
the Company issuable upon the exercise of a Warrant (as in effect immediately
prior to such action) shall be proportionately adjusted so that the holder of
any Warrant thereafter exercised may receive the aggregate number and kind of
shares of capital stock of the Company which he would have owned immediately
following such action if such Warrant had been exercised immediately prior to
such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If after an adjustment a holder of a Warrant upon exercise may receive
shares of two or more classes or series of capital stock of the Company, the
Company shall determine the allocation of the adjusted Exercise Price between
the classes or series of capital stock. After such allocation, the exercise
privilege and the Exercise Price of each class or series of capital stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 14.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) ADJUSTMENT FOR RIGHTS ISSUE.
If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 60 days
after the record date mentioned below to purchase shares of Common Stock or
securities convertible into, or exchangeable or exercisable for, Common Stock at
a price per share (or with an initial conversion, exchange or exercise price)
less than the current market price per share on that record date, the Exercise
Price shall be adjusted in accordance with the following formula:
O + N X P
-----
E' = E x M
-----------------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
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<PAGE>
M = the current market price per share of Common Stock on the record date.
The adjustment pursuant to this subsection (b) shall be made
successively whenever any such rights, options or warrants are issued and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive the rights, options or warrants. If at the end
of the period during which such rights, options or warrants are exercisable, not
all rights, options or warrants shall have been exercised, the Exercise Price
shall be immediately readjusted to what it would have been if "N" in the above
formula had been the number of shares actually issued.
(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS.
If the Company distributes to all holders of its Common Stock any of
its assets (including cash), debt securities, preferred stock or any rights or
warrants to purchase debt securities, assets or other securities of the Company,
the Exercise Price shall be adjusted in accordance with the following formula:
E' = E x M - F
-----
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock on the record date
mentioned below.
F = the fair market value on the record date of the assets, securities,
rights or warrants applicable to one share of Common Stock. The Board
of Directors shall determine the fair market value.
The adjustment pursuant to this subsection (c) shall be made
successively whenever any such distribution is made and shall become effective
immediately after the record date for the determination of stockholders entitled
to receive the distribution.
Notwithstanding the foregoing, if "F" in the above formula equals or
exceeds "M" in the above formula, then "M" in the above formula shall be equal
to the fair market value per share of the Common Stock on the record date as
determined in good faith by the Board of Directors and described in a Board
resolution which shall be filed with the Warrant Agent.
This subsection (c) does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles. Also, this subsection (c) does not apply to rights,
options or warrants referred to in subsection (b) of this Section 14.
(d) ADJUSTMENT FOR COMMON STOCK ISSUE.
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<PAGE>
If the Company issues shares of Common Stock for a consideration per
share less than the current market price per share of Common Stock on the date
the Company fixes the offering price of such additional shares, the Exercise
Price shall be adjusted in accordance with the following formula:
P
--
E' = E x O + M
------------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock outstanding immediately prior to
the issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the current market price per share of Common Stock on the date of
issuance of such additional shares.
A = the number of shares of Common Stock outstanding immediately after the
issuance of such additional shares.
The adjustment pursuant to this subsection (d) shall be made
successively whenever any such issuance is made, and shall become effective
immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (a), (b) and
(c) of this Section 14;
(2) the exercise of Warrants or other warrants outstanding on the
date of this Agreement, or the conversion or exchange of other securities
convertible into or exchangeable for Common Stock;
(3) Common Stock issued to the Company's employees, officers or
directors under bona fide employee benefit plans adopted by the Board of
Directors and approved by the holders of Common Stock when required by law,
if such Common Stock would otherwise be covered by this subsection (d); but
only to the extent that the aggregate number of shares excluded hereby and
issued after the date of this Warrant Agreement shall not exceed 10% of the
Common Stock outstanding at the time of the adoption of such plan,
exclusive of antidilution adjustment thereunder;
(4) Common Stock issuable upon the exercise of rights or warrants
issued to the holders of Common Stock;
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<PAGE>
(5) Common Stock issued to shareholders of any person which
merges into the Company in proportion to their stock holdings of such
person immediately prior to such merger, upon such merger;
(6) Common Stock issued in a bona fide public offering pursuant
to a firm commitment underwriting; or
(7) Common Stock issued in a bona fide private placement through
a placement agent which is a member firm of the National Association of
Securities Dealers, Inc. (except to the extent that any discount from the
current market price attributable to restrictions on transferability of the
Common Stock, as determined in good faith by the Board of Directors and
described in a Board resolution which shall be filed with the Warrant
Agent, shall exceed 20% of the then current market price).
(e) ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE.
If the Company issues any securities convertible into or exchangeable
for Common Stock (other than securities issued in transactions described in
subsections (a)(4), (a)(5), (b) and (c) of this Section 14) for a consideration,
per share of Common Stock initially deliverable upon conversion or exchange of
such securities, less than the current market price per share on the date of
issuance of such securities, the Exercise Price shall be adjusted in accordance
with the following formula:
P
--
E' = E x O + M
------------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock outstanding immediately prior to
the issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the current market price per share on the date of issuance of such
securities.
D = the maximum number of shares of Common Stock deliverable upon
conversion of or in exchange for such securities at the initial
conversion or exchange rate.
The adjustment pursuant to this subsection (e) shall be made
successively whenever any such issuance is made, and shall become effective
immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of
such securities has not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such
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<PAGE>
securities been made on the basis of the actual number of shares of Common Stock
issued upon conversion or exchange of such securities.
This subsection (e) does not apply to:
(1) convertible securities issued to shareholders of any person
which merges into the Company, or with a subsidiary of the Company, in
proportion to their stock holdings of such person immediately prior to such
merger, upon such merger;
(2) convertible securities issued in a bona fide public offering
pursuant to a firm commitment underwriting;
(3) convertible securities issued in a bona fide private
placement through a placement agent which is a member firm of the National
Association of Securities Dealers, Inc. (except to the extent that any
discount from the current market price attributable to restrictions on
transferability of Common Stock issuable upon conversion, as determined in
good faith by the Board of Directors and described in a Board resolution
which shall be filed with the Warrant Agent, shall exceed 20% of the then
current market price); or
(4) stock options issued to the Company's employees, officers or
directors under bona fide employee benefit plans adopted by the Board of
Directors and approved by the holders of Common Stock when required by law,
if such stock options would otherwise be covered by this subsection (e).
(f) CURRENT MARKET PRICE.
In subsections (b), (c), (d) and (e) of this Section 14 and in Section
16, the current market price per share of Common Stock on any date is the
average of the Quoted Prices of the Common Stock for 30 consecutive trading days
commencing 45 trading days before the date in question. The "QUOTED PRICE" of
the Common Stock is the last reported sales price of the Common Stock as
reported by the New York Stock Exchange, or if the Common Stock is reported by
NASDAQ, National Market System or listed on another securities exchange, the
last reported sales price of the Common Stock on such exchange which shall be
for consolidated trading if applicable to such exchange, or if neither so
reported or listed, the last reported bid price of the Common Stock. In the
absence of one or more such quotations, the Board of Directors of the Company
shall determine the current market price on the basis of such quotations as it
in good faith considers appropriate.
(g) CONSIDERATION RECEIVED.
For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 14, the following shall
apply:
(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, PROVIDED that in
no case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;
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<PAGE>
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as determined
in good faith by the Board of Directors (irrespective of the accounting
treatment thereof), whose determination shall be conclusive, and described
in a Board resolution which shall be filed with the Warrant Agent; and
(3) in the case of the issuance of securities convertible into
or exchangeable for shares of Common Stock, the aggregate consideration
received therefor shall be deemed to be the consideration received by the
Company for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the conversion or
exchange thereof (the consideration in each case to be determined in the
same manner as provided in clauses (1) and (2) of this subsection).
(h) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED.
No adjustment in the Exercise Price need be made unless the adjustment
would require an increase or decrease of at least 1% in the Exercise Price. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment.
All calculations under this Section 14 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
(i) WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for a transaction referred to in
subsections (a), (b), (c), (d) or (e) of this Section 14 if Warrant holders are
to participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Stock participate in the transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to any of the Company's plans for reinvestment of dividends or
interest.
No adjustment need be made for a change in the par value, or from par
value to no par value, or from no par value to par value, of the Common Stock.
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
Notwithstanding any other provision of this Section 14, no adjustment
to the Exercise Price shall reduce the Exercise Price below the then par value
per share of the Common Stock, and any such purported adjustment shall instead
reduce the Exercise Price to such par value. The Company hereby covenants not
to take any action to increase the par value per share of the Common Stock.
(j) NOTICE OF ADJUSTMENT.
Whenever the Exercise Price or the number of Warrants issuable upon
exercise of each Warrant is adjusted, the Company shall provide the notices
required by Section 17 hereof.
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<PAGE>
(k) VOLUNTARY REDUCTION.
The Company from time to time may, as the Board of Directors deems
appropriate, reduce the Exercise Price by any amount for any period of time if
the period is at least 20 days and if the reduction is irrevocable during the
period; PROVIDED, HOWEVER, that in no event may the Exercise Price be less than
the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail to
Warrant holders a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period it will be in
effect.
A reduction of the Exercise Price pursuant to this Section 14(k),
other than a reduction which the Company has irrevocably committed will be in
effect for so long as any Warrants are outstanding, does not change or adjust
the Exercise Price otherwise in effect for purposes of subsections (a), (b),
(c), (d) and (e) of this Section 14.
(l) NOTICE OF CERTAIN TRANSACTIONS.
If:
(1) The Company takes any action that would require an
adjustment in the Exercise Price pursuant to subsections (a), (b), (c), (d)
or (e) of this Section 14 and if the Company does not arrange for Warrant
holders to participate pursuant to subsection (i) of this Section 14;
(2) The Company takes any action that would require a
supplemental Warrant Agreement pursuant to subsection (m) of this Section
14; or
(3) there is a liquidation or dissolution of the Company,
the Company shall mail to Warrant holders and the Warrant Agent a notice stating
the proposed record date for a dividend or distribution or the proposed
effective date of a subdivision, combination, reclassification, consolidation,
merger, transfer, lease, liquidation or dissolution. The Company shall mail the
notice at least 15 days before such date. Failure to mail the notice or any
defect in it shall not affect the validity of the transaction.
(m) REORGANIZATION OF THE COMPANY.
(1) If the Company consolidates or merges with or into, or
transfers or leases all or substantially all its assets to, any person,
upon consummation of such transaction the Warrants shall automatically
become exercisable for the kind and amount of securities, cash or other
assets which the holder of a Warrant would have owned immediately after the
consolidation, merger, transfer or lease if the holder had exercised the
Warrant immediately before the record date (or, if none, the effective
date) of the transaction. Concurrently with the consummation of such
transaction, the corporation formed by or surviving any such consolidation
or merger if other than the Company, or the person to which such sale or
conveyance shall have been made (any such person, the "SUCCESSOR
GUARANTOR"), shall enter into a supplemental Warrant Agreement so
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<PAGE>
providing and further providing for adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for in this
Section 14. The Successor Guarantor shall mail to Warrant holders a notice
describing the supplemental Warrant Agreement. If the issuer of securities
deliverable upon exercise of Warrants under the supplemental Warrant
Agreement is an affiliate of the formed, surviving, transferee or lessee
corporation, that issuer shall join in the supplemental Warrant Agreement.
(2) Notwithstanding paragraph (1) of this Section 14(m), in the
case of any merger, reverse stock split, or other transaction in which the
publicly held Common Stock shall be converted into the right to receive a
consideration consisting solely of cash, (A) this Warrant Agreement and
each Warrant shall terminate and (B) each holder of a Warrant, without
having to take any action other than the surrendering of such Warrant to
the Company, shall receive an amount equal to the amount (if any) by which
the price per share payable to, or which would be received by, any public
holder of Common Stock in connection with such transaction exceeds the
Exercise Price effective at that time.
(3) If this subsection (m) applies, subsections (a), (b), (c),
(d) and (e) of this Section 14 do not apply.
(n) COMPANY DETERMINATION FINAL.
Any determination that the Company or the Board of Directors must make
pursuant to subsection (a), (c), (d), (e), (f), (g) or (i) of this Section 14 is
conclusive.
(o) WARRANT AGENT'S DISCLAIMER.
The Warrant Agent has no duty to determine when an adjustment under
this Section 14 should be made, how it should be made or what it should be. The
Warrant Agent has no duty to determine whether any provisions of a supplemental
Warrant Agreement under subsection (m) of this Section 14 are correct. The
Warrant Agent makes no representation as to the validity or value of any
securities or assets issued upon exercise of Warrants. The Warrant Agent shall
not be responsible for the Company's failure to comply with this Section 14.
(p) WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED.
In any case in which this Section 14 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the holder of any Warrant exercised after such record date the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
and (ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 16 hereof; PROVIDED, HOWEVER, that the Company shall deliver
to such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional Warrant Shares, other capital stock
and cash upon the occurrence of the event requiring such adjustment.
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<PAGE>
(q) ADJUSTMENT IN NUMBER OF SHARES.
Upon each adjustment of the Exercise Price pursuant to this Section
14, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of shares of Common Stock (calculated to
the nearest hundredth) obtained from the following formula:
N'= N x E
---
E'
where:
N' = the adjusted number of Warrant Shares issuable upon exercise of a
Warrant by payment of the adjusted Exercise Price.
N = the number of Warrant Shares previously issuable upon exercise of a
Warrant by payment of the Exercise Price prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(r) FORM OF WARRANTS.
Irrespective of any adjustments in the Exercise Price or the number or
kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 15. NO DILUTION OR IMPAIRMENT. (a) If any event shall occur as to
which the provisions of Section 14 are not strictly applicable but the failure
to make any adjustment would adversely affect the purchase rights represented by
the Warrants in accordance with the essential intent and principles of such
Section 14, then, in each such case, the Company shall appoint an investment
banking firm of recognized national standing, or any other financial expert that
does not (or whose directors, officers, employees, affiliates or stockholders do
not) have a direct or material indirect financial interest in the Company or any
of its subsidiaries, who has not been, and, at the time it is called upon to
give independent financial advice to the Company, is not (and none of its
directors, officers, employees, affiliates or stockholders are) a promoter,
director or officer of the Company or any of its subsidiaries, which shall give
their opinion upon the adjustment, if any, on a basis consistent with the
essential intent and principles established in Section 14, necessary to
preserve, without dilution, the purchase rights, represented by the Warrants.
Upon receipt of such opinion, the Company will promptly mail a copy thereof to
the holders of the Warrants and shall make the adjustments described therein.
(b) The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrants, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of the
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<PAGE>
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (1) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock on the exercise of the Warrants
from time to time outstanding and (2) will not take any action which results in
any adjustment of the Exercise Price if the total number of Warrant Shares
issuable after the action upon the exercise of all of the Warrants would exceed
the total number of shares of Common Stock then authorized by the Company's
certificate of incorporation and available for the purposes of issue upon such
exercise. A consolidation, merger, reorganization or transfer of assets
involving the Company covered by Section 14(m) shall not be prohibited by or
require any adjustment under this Section 15.
SECTION 16. FRACTIONAL INTERESTS. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 16,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall notify the Warrant Agent in writing of the amount to be paid in
lieu of the fraction of a Warrant Share and concurrently pay or provide to the
Warrant Agent for payment to the Warrant holder an amount in cash equal to the
product of (i) such fraction of a Warrant Share and (ii) the difference between
the current market price of a share of Common Stock over the Exercise Price.
SECTION 17. NOTICES TO WARRANT HOLDERS. Upon any adjustment of the
Exercise Price or the number of Warrant Shares issuable upon the exercise of
each Warrant pursuant to Section 14 hereof, the Company shall within 15 days
thereafter (i) cause to be filed with the Warrant Agent a certificate of a firm
of independent public accountants of recognized standing selected by the Board
of Directors (who may be the regular auditors of the Company) setting forth the
Exercise Price after such adjustment and setting forth in reasonable detail the
method of calculation and the facts upon which such calculations are based and
setting forth the number of Warrant Shares (or portion thereof) issuable after
such adjustment in the Exercise Price, upon exercise of a Warrant and payment of
the adjusted Exercise Price, which certificate shall be conclusive evidence of
the correctness of the matters set forth therein, and (ii) cause to be given to
each of the registered holders of the Warrant Certificates at such registered
holder's address appearing on the Warrant register written notice of such
adjustments by first-class mail, postage prepaid. Where appropriate, such
notice may be given in advance and included as a part of the notice required to
be mailed under the other provisions of this Section 17.
In case:
(a) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants; or
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets (other than
cash dividends or cash distributions payable out of consolidated earnings or
earned surplus or dividends payable in shares of Common Stock or distributions
referred to in subsection (a) of Section 14 hereof); or
(c) of any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or of the
conveyance or transfer of the properties
18
<PAGE>
and assets of the Company substantially as an entirety, or of any
reclassification or change of Common Stock issuable upon exercise of the
Warrants (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company proposes to take any action (other than actions of
the character described in Section 14(a)) which would require an adjustment of
the Exercise Price pursuant to Section 14;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered holders of the Warrant Certificates at his
address appearing on the Warrant register, at least 15 days (or 10 days in any
case specified in clauses (a) or (b) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first-class mail, postage prepaid, a written notice stating (i)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, or (ii) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (iii) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 17 or any defect therein shall not affect the legality or
validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, lease, dissolution, liquidation or winding up, or the vote
upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 18. MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the business of the Warrant Agent, shall be the successor to the Warrant Agent
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, PROVIDED that such corporation would be
eligible for appointment as a successor warrant agent under the provisions of
Section 21 hereof. In case at the time such successor to the Warrant Agent
shall succeed to the agency created by this Agreement, and in case at that time
any of the Warrant Certificates shall have been countersigned but not delivered,
any such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent; and in case at that time any of the Warrant Certificates
shall not have been countersigned, any successor to the Warrant Agent may
countersign such Warrant Certificates either in the name of the predecessor
Warrant Agent or in the name of the successor to the Warrant Agent; and in all
such cases such Warrant Certificates shall have the full force and effect
provided in the Warrant Certificates and in this Agreement.
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<PAGE>
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
SECTION 19. WARRANT AGENT. The Warrant Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company. The Warrant
Agent assumes no responsibility for the correctness of any of the same
except such as describe the Warrant Agent or action taken or to be taken by
it. The Warrant Agent assumes no responsibility with respect to the
distribution of the Warrant Certificates except as herein otherwise
provided.
(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this
Agreement or in the Warrant Certificates to be complied with by the
Company.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant
Agent shall incur no liability or responsibility to the Company or to any
holder of any Warrant Certificate in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the opinion
or the advice of such counsel.
(d) The Warrant Agent shall incur no liability or responsibility
to the Company or to any holder of any Warrant Certificate for any action
taken in reliance on any Warrant Certificate, certificate of shares of
Common Stock, notice, resolution, waiver, consent, order, certificate, or
other paper, document or instrument believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties. The
Warrant Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or revision of this Agreement or any of the terms
hereof, unless evidenced by a writing between the Company and the Warrant
Agent.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of this Agreement and the performance of its responsibilities
hereunder, to reimburse the Warrant Agent for all expenses, taxes
(including withholding taxes) and governmental charges and other charges of
any kind and nature incurred by the Warrant Agent in the execution,
delivery and performance of its responsibilities under this Agreement and
to indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and counsel fees, for anything done
or omitted by the Warrant Agent in the execution, delivery and performance
of its responsibilities under this Agreement except as a result of its
gross negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company
20
<PAGE>
or one or more registered holders of Warrant Certificates shall furnish the
Warrant Agent with reasonable security and indemnity for any costs and
expenses which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as it may consider proper,
whether with or without any such security or indemnity. All rights of
action under this Agreement or under any of the Warrants may be enforced by
the Warrant Agent without the possession of any of the Warrant Certificates
or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent and any recovery of
judgment shall be for the ratable benefit of the registered holders of the
Warrants, as their respective rights or interests may appear.
(g) Except as prohibited by law, the Warrant Agent, and any
stockholder, director, officer or employee of the Warrant Agent, may buy,
sell or deal in any of the Warrants or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may
be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for
the Company, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything which it may do
or refrain from doing in connection with this Agreement except for its own
gross negligence or bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant Certificate to make or cause to
be made any adjustment of the Exercise Price or number of the Warrant
Shares or other securities or property deliverable as provided in this
Agreement, or to determine whether any facts exist which may require any of
such adjustments, or with respect to the nature or extent of any such
adjustments, when made, or with respect to the method employed in making
the same. The Warrant Agent shall not be accountable with respect to the
validity or value or the kind or amount of any Warrant Shares or of any
securities or property which may at any time be issued or delivered upon
the exercise of any Warrant or with respect to whether any such Warrant
Shares or other securities will when issued be validly issued and fully
paid and nonassessable, and makes no representation with respect thereto.
(j) In the absence of bad faith on its part, the Warrant Agent
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 Warrant Agent and conforming to the requirements
of this Warrant Agreement. However, the Warrant Agent shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Agreement.
(k) The Warrant Agent may rely and shall be fully protected in
relying upon any document believed by it to be genuine and to have been
signed or presented by the proper person.
SECTION 20. REGISTRATION RIGHTS.
21
<PAGE>
The Company has prepared and caused to be filed with the SEC pursuant
to Rule 415 under the Securities Act a shelf registration statement, No.
333-18027, (the "Shelf Registration"), on Form S-3 under the Securities Act.
The Company hereby represents, warrants and covenants that (i) the Shelf
Registration has been declared effective by the SEC, (ii) the Shelf Registration
is currently effective, and (iii) the Company will file within 30 days of the
date of this Warrant Agreement an appropriate prospectus supplement or amendment
to the Shelf Registration covering the offer and sale by the Company of the
Warrant Shares to the holders of Warrants upon exercise thereof. The Company
also hereby covenants that:
(a) The Company shall use its best efforts to keep the Shelf
Registration continuously effective under the Securities Act in order to permit
the prospectus included therein to be lawfully delivered by the Company to the
holders exercising the Warrants until 30 days after the Expiration Date or such
shorter period that will terminate when all the Warrants have been exercised.
In the event that during such period the Shelf Registration shall no longer be
effective, in order to permit the prospectus included therein to be lawfully
delivered as set forth above, the Company shall (i) take whatever action is
necessary to cause the Shelf Registration to become so effective within 30 days
or (ii) file a registration statement under the Securities Act on an appropriate
form within such 30-day period covering the offer and sale of the Warrant Shares
to the holders of Warrants upon exercise thereof and cause such registration
statement (a "Subsequent Registration") to be declared effective by the SEC as
soon as practicable thereafter. If the Company files a Subsequent Registration
as contemplated by clause (ii) above, all of the Company's obligations under
this Section 20 shall apply to the Subsequent Registration.
(b) Except as provided below with respect to any Black Out Period (as
defined below), the Company shall be deemed not to have used its best efforts to
keep the Shelf Registration effective during the requisite period if it
voluntarily takes any action that would result in its not being able to offer
and sell the Warrant Shares upon exercise of the Warrants during that period,
unless such action is required by applicable law. Notwithstanding the
foregoing, the Company shall not be required to amend or supplement the Shelf
Registration, any related prospectus or any document incorporated therein by
reference, for a period (a "BLACK OUT PERIOD") not to exceed, for so long as
this Agreement is in effect, an aggregate of 60 days in any calendar year, in
the event that (i) an event occurs and is continuing as a result of which the
Shelf Registration, any related prospectus or any document incorporated therein
by reference as then amended or supplemented would, in the Company's good faith
judgment, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (ii)(A) the
Company determines in its good faith judgment that the disclosure of such event
at such time would have a material adverse effect on the business, operations or
prospects of the Company or (B) the disclosure otherwise relates to a material
business transaction which has not yet been publicly disclosed; PROVIDED that no
Black Out Period may be in effect during the six months prior to the Expiration
Date.
(c) The Company shall cause the Shelf Registration and the related
prospectus and any amendment or supplement thereto, as of the date hereof and as
of the effective date of any such amendment or supplement, (i) to comply in all
material respects with the applicable requirements of the Securities Act and the
rules and regulations of the SEC and (ii) not to contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) The Company shall give prompt written notice to the holders of
the Warrants and the Warrant Agent of (1) the effectiveness of any
post-effective amendment to the Shelf Registration
22
<PAGE>
thereto, (2) the issuance by the SEC of any stop order suspending the
effectiveness of the Shelf Registration or the initiation or threatening of
any proceedings for that purpose, (3) the receipt by the Company or its legal
counsel of any notification with respect to the suspension of the
qualification of the Warrant Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, (4) the
happening of any event that requires the Company to make changes in the Shelf
Registration or the prospectus in order to make the statements therein not
misleading and (5) the commencement and termination of any Black Out Period.
(e) The Company shall use its reasonable best efforts to prevent
the issuance or obtain the withdrawal of any order suspending the
effectiveness of the Shelf Registration at the earliest possible time.
(f) Upon the occurrence of any event contemplated by Section
20(d)(4) or (5) of this Agreement (subject to Section 20(b) of this
Agreement) the Company shall promptly prepare a post-effective amendment to
the Shelf Registration or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to holders of the
Warrants, the prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and will contain the current information required by the
Securities Act.
(g) Not later than the date hereof, the Company will provide a
CUSIP number for the Warrant Shares and provide the Warrant Agent with
printed certificates for the Warrant Shares.
(h) The Company will comply with all rules and regulations of the
SEC to the extent and so long as they are applicable to the Shelf
Registration.
(i) The Company shall register or qualify or cooperate with the
holders in connection with the registration or qualification of the Warrant
Shares for offer and sale by the Company upon exercise of the Warrants under
the securities or blue sky laws of such states of the United States as any
holder reasonably requests and do any and all other acts or things necessary
or advisable to enable such offer and sale in such jurisdictions; PROVIDED
that the Company shall not be required to (i) qualify to do business in any
jurisdiction in which it is not then so qualified or (ii) take any action
which would subject it to general service of process or to taxation in any
jurisdiction in which it is not then so subject.
(j) The Company shall bear all expenses incurred by it in connection
with the performance of its obligations under this Section 20.
(k) The Company acknowledges and agrees that any remedy at law for
breach of any provision of this Section 20 will be inadequate and that, in
addition to any other remedies that the holder may have, the holders shall be
entitled to the remedy of specific performance to ensure the Company performs
its obligations under this Section 20. The election of any one or more remedies
by the holders hereunder shall not constitute a waiver of the right to pursue
other available remedies.
SECTION 21. CHANGE OF WARRANT AGENT. If the Warrant Agent shall
become incapable of acting as Warrant Agent or shall resign as provided below,
the Company shall appoint a successor to such Warrant Agent. If the Company
shall fail to make such appointment within a period of 30 days after it has been
notified in writing of such incapacity by the Warrant Agent or by the registered
holders of a majority of Warrants, then the registered holder of any Warrant
Certificate may apply to any court of
23
<PAGE>
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Pending appointment of a successor to such Warrant Agent, either by the Company
or by such a court, the duties of the Warrant Agent after the effective date of
its resignation or after the date it becomes incapable of acting as Warrant
Agent shall be carried out by the Company. The holders of a majority of the
unexercised Warrants shall be entitled at any time to remove the Warrant Agent
and appoint a successor to such Warrant Agent. Such successor to the Warrant
Agent need not be approved by the Company or the former Warrant Agent. After
appointment, the successor to the Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Warrant Agent without further act or deed; but the former Warrant Agent
shall, conditioned upon receiving a receipt therefor and a release from the
Company of its obligations hereunder, deliver and transfer to the successor to
the Warrant Agent any property at the time held by it hereunder and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Failure to give any notice provided for in this Section 21, however,
or any defect therein, shall not affect the legality or validity of the
appointment of a successor to the Warrant Agent.
The Warrant Agent may resign at any time and be discharged from the
obligations hereby created by so notifying the Company in writing at least 30
days in advance of the proposed effective date of its resignation. If no
successor Warrant Agent accepts the engagement hereunder by such time, the
Company shall act as Warrant Agent and, at such time, the former Warrant Agent
shall, conditioned upon receiving a receipt therefor and a release from the
Company of its obligations hereunder, deliver and transfer to the Company any
property at the time held by it hereunder and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
SECTION 22. NOTICES TO THE COMPANY AND WARRANT AGENT. Any notice or
demand authorized by this Agreement to be given or made by the Warrant Agent or
by the registered holder of any Warrant Certificate to or on the Company shall
be sufficiently given or made when and if deposited in the mail, registered,
postage prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent), as follows:
Olympic Financial Ltd.
7825 Washington Avenue South
Minneapolis, Minnesota 55439
Telecopier No.: (612) 942-3348
Attention: Chief Financial Officer
and
Telecopier No.: (612) 996-0671
Attention: Secretary
with a copy to:
Dorsey & Whitney
Pillsbury Center South
220 South Sixth Street
Telecopier No. : (612) 340-8738
Attention: Rick Swanson
24
<PAGE>
Any notice pursuant to this Agreement to be given by the Company or by
the registered holder(s) of any Warrant Certificate to the Warrant Agent shall
be sufficiently given when and if deposited in the mail, registered, postage
prepaid, addressed (until another address is filed in writing by the Warrant
Agent with the Company) to the Warrant Agent at the Warrant Agent Office as
follows:
Norwest Bank Minnesota, National Association
Norwest Center
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Telecopier No.: (612) 667-9825
Attention: Corporate Trust
Notice may also be given by facsimile transmission (effective when
receipt is acknowledged) or by overnight delivery service (effective the next
business day).
SECTION 23. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
consent of any holders of Warrant Certificates in order to cure any ambiguity or
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provision herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not in any way
materially adversely affect the interests of the holders of Warrant
Certificates. Any amendment or supplement to this Agreement that has a material
adverse effect on the interests of holders of the Warrants shall require the
written consent of registered holders of a majority of the then outstanding
Warrants (excluding Warrants held by the Company or any of its Affiliates). The
consent of each holder of a Warrant affected shall be required for any amendment
pursuant to which the Exercise Price would be increased or the number of Warrant
Shares purchasable upon exercise of Warrants would be decreased (other than in
accordance with Section 14, 15 or 16 hereof).
SECTION 24. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder,
including, without limitation, any Successor Guarantor under Section 14(m) of
this Agreement.
SECTION 25. TERMINATION. This Agreement shall terminate at 5:00
p.m., New York, New York time on March 15, 2007. Notwithstanding the foregoing,
this Agreement will terminate on such earlier date on which all outstanding
Warrants have been exercised. The provisions of Section 19 shall survive such
termination.
SECTION 26. GOVERNING LAW; JURISDICTION. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be governed by and
construed in accordance with the internal laws of said State. The parties
hereto irrevocably consent to the jurisdiction of the courts of the State of New
York and any federal court located in such state in connection with any action,
suit or proceeding arising out of or relating to this Agreement.
SECTION 27. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Warrant Agent and the registered holders of the Warrant Certificates any
legal or equitable right, remedy or claim under this Agreement; but this
25
<PAGE>
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent and the registered holders of the Warrant Certificates.
SECTION 28. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 29. FURTHER ASSURANCES. From time to time on and after the
date hereof, the Company shall deliver or cause to be delivered to the Warrant
Agent such further documents and instruments and shall do and cause to be done
such further acts as the Warrant Agent shall reasonably request (it being
understood that the Warrant Agent shall have no obligation to make such request)
to carry out more effectively the provisions and purposes of this Agreement, to
evidence compliance herewith or to assure itself that it is protected hereunder.
[Signature Page Follows]
26
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
OLYMPIC FINANCIAL LTD.
By: /s/ John A. Witham
-----------------------------------------------
Name: John A. Witham
Title: Executive Vice President and Chief
Financial Officer
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By: Curtis D. Schwegman
Authorized Signatory
<PAGE>
(Face of Unit Certificate)
Unit Certificate
CUSIP Number 681593 AF6
Olympic Financial Ltd.
No. 1 300,000 Units
This Unit Certificate certifies that Cede & Co., or its registered
assigns, is the registered Holder of 300,000 Units consisting of an aggregate of
$300,000,000 principal amount of 11 1/2% Senior Notes due 2007 (the "Notes") and
300,000 Warrants (the "Warrants") to purchase an aggregate of 2,052,000 shares
of common stock, $.01 par value per share, of Olympic Financial Ltd., a
Minnesota corporation (the "Company"). This Unit Certificate represents, until
the Separation Date, the Notes (represented by Certificate No. 1 in a principal
amount of $200,000,000 and Certificate No. 2 in a principal amount of
$100,000,000) issued on the date hereof pursuant to that certain Indenture dated
as of March 12, 1997, as supplemented by that certain First Supplemental
Indenture dated as of March 12, 1997, between the Company and Norwest Bank
Minnesota, National Association, as trustee (the "Trustee"), and the Warrants
(represented by Certificate No. 1 for 200,000 Warrants and Certificate No. 2 for
100,000 Warrants), issued on the date hereof pursuant to that certain Warrant
Agreement dated as of March 12, 1997 (the "Warrant Agreement") between the
Company and Norwest Bank Minnesota, National Association, as warrant agent (the
"Warrant Agent"), and this Unit Certificate has no other value and represents no
other interests other than such component securities. Copies of the
certificates representing the Notes and the Warrants are attached as exhibits
hereto. Immediately upon the Notes and the Warrants becoming separately
transferable on the Separation Date pursuant to the Warrant Agreement, this Unit
Certificate shall be void and of no further force or effect without further
action by the Company, the Trustee or the Warrant Agent.
Dated: March 12, 1997
OLYMPIC FINANCIAL LTD.
By:
------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
By:
------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Countersigned:
Norwest Bank Minnesota, National Association,
as Trustee and Warrant Agent
By:
-----------------------
Authorized Signature
<PAGE>
(Back of Unit Certificate)
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.
Each Unit consists of one Note having a principal amount of
$1,000 and one Warrant to purchase 6.84 shares of Common Stock at an exercise
price of $11.00 per share. The Notes, all of which are presently issued and
outstanding and represented by Certificate Nos. 1 and 2, and the Warrants, all
of which are presently issued and outstanding and represented by Certificate
Nos. 1 and 2, will not be separately transferable until the earlier to occur of
(i) one year from the date of issuance, and (ii) such earlier date as may be
determined by Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") (the
"Separation Date"), at which time the Notes and the Warrants will become
separately transferable and this Unit Certificate shall become void and of no
further force and effect without further action by the Company, the Trustee or
the Warrant Agent. In the event that DLJ determines that the Notes and the
Warrants will be separately transferable prior to one year from the date of
issuance, DLJ shall notify the Trustee and the Company of the Separation Date in
advance of such date.
Until the Separation Date, no definitive certificates
representing the Warrants will be issued except in connection with the issuance
of definitive certificates representing the Notes pursuant to the Indenture
dated as of March 12, 1997, as supplemented by the First Supplemental Indenture
dated as of March 12, 1997, between the Company and Norwest Bank Minnesota,
National Association.
2
<PAGE>
EXHIBIT A
FORM OF NOTE
(Face of Note)
11 1/2% Senior Note due March 15, 2007
CUSIP Number 681593 AE9
No. $
-----------
OLYMPIC FINANCIAL LTD.
promises to pay to
- ---------------------------------------------------------------------------
or its registered assigns, the principal sum of
---------------------------
Dollars on March 15, 2007.
Interest Payment Dates: March 15 and September 15, commencing September 15,
1997.
Record Dates: March 1 and September 1 (whether or not a Business Day).
Dated:
--------------------, ----
OLYMPIC FINANCIAL LTD.
(SEAL) By:
-------------------------------
By:
-------------------------------
Trustee's Certificate of Authentication:
This is one of the Notes referred
to in the within-mentioned Indenture:
Norwest Bank Minnesota, National Association, as Trustee
By:
--------------------------
Authorized Signature
<PAGE>
(Back of Note)
11 1/2% SENIOR NOTE
DUE MARCH 15, 2007
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(1).
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Olympic Financial Ltd., a Minnesota corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Note at the
rate and in the manner specified below.
The Company shall pay interest in cash on the principal amount of this
Note at the rate per annum of 11 1/2%. The Company will pay interest
semiannually on March 15 and September 15 of each year, commencing September 15,
1997, or if any such day is not a Business Day on the next succeeding Business
Day (each an "INTEREST PAYMENT DATE").
Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months. Interest shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of the
original issuance of the Notes.
2. METHOD OF PAYMENT. Principal, premium, if any, and interest on
the Notes (except defaulted interest) will be payable at the office or agency of
the Company maintained for such purpose within the City and State of New York
or, at the option of the Company, payment of interest may be made by check
mailed to the Holders of Notes at the close of business on the record date next
preceding the Interest Payment Date, even if such Notes are cancelled after such
record date and on or before such Interest Payment Date; provided, that all
payments of principal, premium and interest with respect to the Notes the
Holders of which have given valid, timely and complete wire transfer
instructions to the Company and the Trustee will be required to be made by wire
transfer of immediately available funds to the accounts specified by the Holders
in such instructions. The Holder hereof must surrender this Note to a Paying
Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company may mail an
interest check to a Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-registrar without prior notice to any Holder. The Company and any of its
Subsidiaries may act in any such capacity.
- ---------------
(1) This paragraph should be included only if the Note is issued in global
form.
A-2
<PAGE>
4. INDENTURE. The Company issued the Notes pursuant to the
provisions of an Indenture dated as of March 12, 1997, as supplemented by a
First Supplemental Indenture dated as of March 12, 1997 (as so supplemented, the
"INDENTURE"), between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (the "TIA") as in
effect on the date of the Indenture. The Notes are subject to all such terms,
and Holders are referred to the Indenture and such act for a statement of such
terms. The terms of the Indenture shall govern any inconsistencies between the
Indenture and the Notes. The Notes are general unsecured obligations of the
Company. The Notes are limited to $300,000,000 in aggregate principal amount.
5. OPTIONAL REDEMPTION. On or after March 15, 2002, the Company may
redeem all or any portion of Notes upon not less than 30 nor more than 60 days'
notice, as set forth in the immediately succeeding paragraph, at a redemption
price (expressed in percentages of principal amount thereof), plus accrued and
unpaid interest, if any, to the redemption date.
The redemption price as a percentage of principal amount shall be as
follows, if the Notes are redeemed during the twelve-month period beginning on
March 15 of the following years:
YEAR PERCENTAGE
---- ----------
2002 . . . . . . . . . . . . . . . . . . . . . 105.75%
2003 . . . . . . . . . . . . . . . . . . . . . 103.83%
2004 . . . . . . . . . . . . . . . . . . . . . 101.92%
2005 and thereafter . . . . . . . . . . . . . 100.00%
6. MANDATORY REDEMPTION. Subject to the Company's obligation to make
an offer to repurchase Notes under certain circumstances pursuant to Sections
509 and 510 of the Indenture (as described in paragraph 7 below), the Company
shall have no mandatory redemption or sinking fund obligations with respect to
the Notes.
7. REPURCHASE AT OPTION OF HOLDER. (i) If there is a Change of
Control, the Company shall be required to offer to purchase on the Change of
Control Payment Date all outstanding Notes at 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the Change
of Control Payment Date. Within ten days following any Change of Control, the
Company shall mail a notice to each Holder. Each Holder may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below.
(ii) If the Company or a Restricted Subsidiary consummates an Asset
Sale, the Company or Restricted Subsidiary, as applicable, may apply the Net
Proceeds therefrom (a) to permanently reduce Senior Indebtedness (other than the
Notes or obligations of a Special Purpose Entity) of the Company or of any
Restricted Subsidiary, or (b) to (i) an Investment (other than in Receivables
that, at the time of purchase, are not Eligible Receivables), or (ii) the
purchase of Receivables that are, at the time of purchase, Eligible Receivables
(including payment of Dealer Participations), or (iii) the making of any capital
expenditure, or (iv) the acquisition of any other tangible assets, in each case,
in or with respect to a Permitted Business. Pending the final application of any
such Net Proceeds, the Company or such Restricted Subsidiary may temporarily
reduce the principal obligations outstanding under any Warehouse Facility or
otherwise invest such Net Proceeds in any manner that is not prohibited by the
Indenture. Any Net Proceeds from Asset Sales that are not so applied or
invested will be deemed to constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $10.0 million, the Company shall be required
to make an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the
maximum principal amount of Notes that may be
A-3
<PAGE>
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
thereon to the date of purchase. Notwithstanding the foregoing, if any Excess
Spread or interest therein is sold or otherwise conveyed or disposed of in an
Asset Sale and, immediately thereafter, Finance Income Receivable relating to
the remaining aggregate Excess Spread not sold, conveyed or disposed of pursuant
to such transaction (the "Remaining Finance Income Receivable") would be less
than Minimum Finance Income Receivable, the Company shall be required to make an
Asset Sale Offer in the amount by which the Remaining Finance Income Receivable
is less than Minimum Finance Income Receivable (the "FIR Offer Amount"), without
regard to the application of the Net Proceeds of such sale by the Company
pursuant to clause (a) or (b) above; PROVIDED, that any Asset Sale Offer made
pursuant to this sentence shall be at an offer price of 101% of the principal
amount of the Notes plus accrued and unpaid interest thereon to the date of the
purchase. The Company shall mail a notice to each Holder when it is required to
make an Asset Sale Offer. Holders may elect to have such Notes purchased by
competing the form entitled "Option of Holder to Elect Purchase" appearing
below.
8. REDEMPTION OF NOTES. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder of Notes to be redeemed at its registered address. Notes may be redeemed
in part but only in whole multiples of $1,000, unless all of the Notes held by a
Holder are to be redeemed. On and after the redemption date, interest ceases to
accrue on Notes or portions of them called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons, and in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture.
The Registrar need not exchange or register the transfer of any Note or portion
of a Note selected for redemption. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before the date of the mailing of
a notice of redemption.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee
for registration of the transfer of this Note, the Company, the Trustee and any
agent of the Company or the Trustee may deem and treat the Person in whose name
this Note is registered as its absolute owner for the purpose of receiving
payment of principal of, premium, if any, and interest on this Note and for all
other purposes whatsoever, whether or not this Note is overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
11. AMENDMENT, SUPPLEMENT AND WAIVERS. Except as provided in the
next two succeeding paragraphs, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, tender offer or exchange offer for
Notes), and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes).
Without the consent of each Holder affected, an amendment or waiver
may not (with respect to any Notes held by a non-consenting Holder): (i) reduce
the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or
A-4
<PAGE>
change the fixed maturity of any Note or alter the provisions with respect to
the redemption of the Notes (other than pursuant to the provisions of Sections
509 and 510 of the Indenture), (iii) reduce the rate of or change the time for
payment of interest on any Note, (iv) waive a Default or Event of Default in the
payment of principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default that
resulted from such acceleration), (v) make any Note payable in money other than
that stated in the Notes, (vi) make any change in the provisions of the
Indenture relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of or premium, if any, or interest on the
Notes, (vii) waive a redemption payment with respect to any Note (other than a
payment required pursuant to Sections 509 or 510 of the Indenture), or
(viii) make any change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder of
Notes, the Company and the Trustee may amend or supplement the Indenture or the
Notes to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes (provided
that the uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that uncertificated Notes are
described in Section 163(f)(2)(B) of the Code), to provide for the assumption of
the Company's obligations to Holders of the Notes in the case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with requirements of
the Securities and Exchange Commission in order to effect or maintain the
qualification of the Indenture under the TIA.
12. DEFAULTS AND REMEDIES. Events of Default under the Indenture
include: (i) default for 30 days in the payment when due of interest on the
Notes; (ii) default in payment when due of principal of or premium, if any, on
the Notes; (iii) failure by the Company to comply with the provisions of
Sections 509, 510, 511, 512, 513, 517 or 601 of the Indenture; (iv) failure by
the Company for 60 days after notice to comply with any of its other agreements
in the Indenture or the Notes; (v) 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 the 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; (vi) 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
period of 60 days; (vii) certain events of bankruptcy or insolvency with respect
to the Company or any of its Subsidiaries; and (viii) except as permitted by the
Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to
be invalid or unenforceable or shall cease for any reason to be in full force
and effect or any Subsidiary Guarantor or any Person acting on behalf of any
Subsidiary Guarantor shall deny or disaffirm its obligations under its
Subsidiary Guarantee.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
A-5
<PAGE>
The above description of Events of Default and remedies is qualified
by reference, and subject in its entirety, to the more complete description
thereof contained in the Indenture, which may be amended from time to time in
accordance with the terms of the Indenture.
13. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to pay, among
other things, dividends or make other distributions, incur additional
indebtedness and issue preferred stock, create certain liens, create or suffer
to exist encumbrances on the ability of the Restricted Subsidiaries to pay
dividends and make distributions, enter into certain mergers and consolidations,
sell assets and enter into certain transactions with affiliates.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture,
in its individual or any other capacity, may deal with the Company or its
Affiliates, as if it were not Trustee.
15. 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 Indenture or the Notes or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
Olympic Financial Ltd.
7825 Washington Avenue South
Minneapolis, MN 55439-2435
Attention: Secretary
A-6
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date:
------------------
Your Signature:
-----------------------------------
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee.*
- -----------------
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-7
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by the
Company pursuant to Section 509 or Section 510 of the Indenture, check the
appropriate box:
/ / Section 509 / / Section 510
(Change of Control) (Asset Sale)
If you want to have only part of the Note purchased by the Company pursuant
to Section 509 or 510 of the Indenture, state the amount you elect to have
purchased:
$
---------------
Date:
-----------
Your Signature:
-----------------------------------
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee.*
- ---------------
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-8
<PAGE>
EXHIBIT A
Form of Initial Warrant Certificate
[Face]
EXERCISABLE ON OR AFTER THE SEPARATION DATE (AS DEFINED HEREIN). THE
WARRANTS EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE SEPARATELY FROM THE
COMPANY'S 11 1/2% SENIOR NOTES DUE 2007 (THE "NOTES") ORIGINALLY SOLD AS A UNIT
WITH SUCH WARRANTS UNTIL THE EARLIEST TO OCCUR OF (I) ONE YEAR FROM THE DATE OF
ISSUANCE OF THE NOTES AND (II) SUCH OTHER DATE AS MAY BE DESIGNATED BY
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION (THE "SEPARATION DATE").
THE COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF THE COMPANY (THE "COMMON
STOCK") FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION FROM REGISTRATION REQUIREMENTS. ACCORDINGLY, NO WARRANT HOLDER SHALL
BE ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE TIME
OF EXERCISE, (I) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT RELATING TO
THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT (THE
"WARRANT SHARES") HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES
AND EXCHANGE COMMISSION (THE "SEC"), AND NO STOP ORDER SUSPENDING THE
EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC OR (II)
THE ISSUANCE OF THE WARRANT SHARES IS PERMITTED PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
No. ___________ _________ Warrants
Warrant Certificate
Olympic Financial Ltd.
This Warrant Certificate certifies that _________, or its registered
assigns, is the registered holder of Warrants expiring March 15, 2007 (the
"WARRANTS"), to purchase shares of Common Stock, par value $.01 per share (the
"COMMON STOCK"), of Olympic Financial Ltd., a Minnesota corporation (the
"COMPANY"). Each Warrant entitles the registered holder upon exercise at any
time from 9:00 a.m. on the Separation Date referred to below until 5:00 p.m.
New York, New York time on March 15, 2007, to receive from the Company 6.84
fully paid and nonassessable shares of Common Stock ("WARRANT SHARES") at the
initial exercise price (the "EXERCISE PRICE") of $11.00 per share in the form of
cash or by certified or official bank check payable to the order of the Company
in the amount of the Exercise Price, and upon surrender of this Warrant
Certificate and such payment of the Exercise Price at the office or agency of
the Warrant Agent (as hereinafter defined), but only subject to the conditions
set forth herein and in the Warrant Agreement referred to below. The Exercise
Price and number of Warrant Shares issuable upon exercise of the Warrants are
subject to adjustment upon the occurrence of certain events set forth in the
warrant agreement (the "WARRANT AGREEMENT"), dated as of March 12, 1997, between
the Company and Norwest Bank Minnesota, National Association, as warrant agent
(the "WARRANT AGENT"). All capitalized terms not defined herein shall have the
meanings assigned to such terms in the Warrant Agreement.
A-1
<PAGE>
No Warrant may be exercised before the Separation Date. No Warrant
may be exercised after 5:00 p.m., New York, New York Time on March 15, 2007 and
to the extent not exercised by such time such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the following pages hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent.
This Warrant Certificate shall be governed and construed in accordance
with the internal laws of the State of New York.
A-2
<PAGE>
IN WITNESS WHEREOF, Olympic Financial Ltd. has caused this Warrant
Certificate to be signed by its Chief Financial Officer and by its Assistant
Secretary and has caused a facsimile of its corporate seal to be affixed
hereunto or imprinted hereon.
Dated: March 12, 1997
Olympic Financial Ltd.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
(seal)
Countersigned:
Norwest Bank Minnesota,
National Association
as Warrant Agent
By:
------------------------
Authorized Signatory
A-3
<PAGE>
Form of Warrant Certificate
[Reverse]
Unless and until it is exchanged in whole or in part for Warrants in
definitive form, this Warrant may not be transferred except as a whole by the
depositary to a nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or by the depositary or any
such nominee to a successor depositary or a nominee of such successor
depositary. The Depository Trust Company ("DTC") (55 Water Street, New York,
New York) shall act as the depositary until a successor shall be appointed by
the Company and the Warrant Agent. Unless this certificate is presented by an
authorized representative of DTC to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring March 15, 2007 entitling the holder upon
exercise to receive shares of Common Stock of the Company, and are issued or to
be issued pursuant to the Warrant Agreement duly executed and delivered by the
Company to the Warrant Agent, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Company and the holders (the
words "HOLDERS" or "HOLDER" meaning the registered holders or registered holder)
of the Warrants.
Warrants may be exercised at any time from 9:00 a.m. on or after the
earliest to occur of (i) one year from the issue date of the Notes, (ii) such
other date as may be designated by Donaldson, Lufkin & Jenrette Securities
Corporation (the "SEPARATION DATE") and until 5:00 p.m., New York, New York time
on March 15, 2007. The holder of Warrants evidenced by this Warrant Certificate
may exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in the form of cash or by certified or
official bank check payable to the order of the Company in the amount of the
Exercise Price at the office of the Warrant Agent. In the event that upon any
exercise of Warrants evidenced hereby the number of Warrants exercised shall be
less than the total number of Warrants evidenced hereby, there shall be issued
to the holder hereof or his assignee a new Warrant Certificate evidencing the
number of Warrants not exercised. No adjustment shall be made for any dividends
on any Common Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
The Warrant Agreement provides that the Company shall be bound by
certain registration obligations with respect to the Common Stock issuable upon
exercise of the Warrants, as set forth in the Warrant Agreement.
A-4
<PAGE>
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
A-5
<PAGE>
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive __________ shares of Common
Stock and herewith tenders payment for such shares in the form of cash or
certified or official bank check payable to the order of Olympic Financial Ltd.
in the amount of $_______ (the "PURCHASE PRICE") in accordance with the terms
hereof.
The undersigned requests that a certificate for such shares be
registered in the name of ___________________________________, whose address is
______________________________________ and that such shares be delivered to ____
_______________________ whose address is ________________________________.
If said number of shares is less than all of the shares of Common
Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares be registered in
the name of _____________________, whose address is __________________, and
that such Warrant Certificate be delivered to ________________, whose address is
_____________________.
Date: ____________________
Your Signature:______________________
(Sign exactly as your name appears on
the face of this Warrant)
Signature Guarantee:
A-6
<PAGE>
SCHEDULE OF EXCHANGES OF GLOBAL WARRANTS(1)
The following exchanges of a part of this Global Warrant for Definitive Warrants
have been made:
Number of
Amount of Amount of Warrants in
decrease in increase in this Global
Number of Number of Warrant Signature of
Warrants in Warrants in following authorized
Date of this Global this Global such decrease officer of
Exchange Warrant Warrant or increase Warrant Agent
- --------------------------------------------------------------------------
- --------------------
(1) This is to be included only if the Warrant is in global form.
A-7
<PAGE>
OLYMPIC FINANCIAL LTD.
------------
$145,000,000
13% SENIOR NOTES due 2000
--------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of March 11, 1997
TO
INDENTURE
Dated as of April 28, 1995
-----------------
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Trustee
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of March 11, 1997, between OLYMPIC
FINANCIAL LTD., a Minnesota corporation (the "Company"), and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has heretofore executed and delivered to the Trustee a certain
Indenture, dated as of April 28, 1995, as supplemented and amended by that
certain First Supplemental Indenture, dated as of August 11, 1995 (such
Indenture as so supplemented and amended, the "Indenture"), pursuant to which
the Company issued $145,000,000 aggregate principal amount of its 13% Senior
Notes due 2000 (the "Securities"). All terms used in this Second Supplemental
Indenture that are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
Sections 2.09 and 9.02 of the Indenture provide that, subject to certain
exceptions, the Indenture may be amended or supplemented with the consent of at
least a majority in principal amount of the Securities then outstanding, other
than Securities owned by the Company or any Affiliate of the Company (including
consents obtained in connection with a tender offer or exchange offer for
Securities).
The Board of Directors of the Company, by Written Action effective as of
January 17, 1997, authorized (i)the solicitation, in connection with a tender
offer to purchase all the Securities for cash, of consents to certain proposed
amendments to the Indenture for the purpose of eliminating certain of the
covenants contained in the Indenture and (ii)the execution and delivery of this
Second Supplemental Indenture upon receipt of the necessary consents.
The Company has received the necessary consents and desires and has
requested that the Trustee join with it in the execution and delivery of this
Second Supplemental Indenture.
In accordance with Sections 9.02 and 9.06 of the Indenture, the Company has
furnished the Trustee with (i)copies of the Written Action of the Board of
Directors of the Company authorizing the execution of this Second Supplemental
Indenture, certified by the Secretary of the Company, and (ii)an Officer's
Certificate and an Opinion of Counsel as conclusive evidence that this Second
Supplemental Indenture is authorized or permitted by the Indenture, that it is
not inconsistent therewith and that it will be valid and binding upon the
Company in accordance with its terms.
All things have been done that are necessary to make this Second
Supplemental Indenture a valid agreement of the Company and the Trustee and a
valid amendment of and supplement to the Indenture.
-2-
<PAGE>
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises, the Company and the Trustee agree
for the equal and proportionate benefit of all Holders of Securities or of any
coupons appertaining thereto (including holders from time to time of Securities
held through a Holder that is a Depositary (as defined in the Indenture)), as
follows:
ARTICLE ONE
SECTION 1.01. Section 4.05 of the Indenture is hereby eliminated in its
entirety.
SECTION 1.02. Section 4.07 of the Indenture is hereby eliminated in its
entirety.
SECTION 1.03. Section 4.08 of the Indenture is hereby eliminated in its
entirety.
SECTION 1.04. Section 4.09 of the Indenture is hereby eliminated in its
entirety.
SECTION 1.05. Section 4.11 of the Indenture is hereby eliminated in its
entirety.
SECTION 1.06. Section 4.12 of the Indenture is hereby eliminated in its
entirety.
SECTION 1.07. Section 4.16 of the Indenture is hereby eliminated in its
entirety.
SECTION 1.08. Section 4.17 of the Indenture is hereby eliminated in its
entirety.
SECTION 1.09.
(a) This Second Supplemental Indenture shall only become operative
upon the delivery by the Company to the Trustee of an Officer's Certificate
certifying that the Company has accepted all Securities validly tendered and not
withdrawn in the Tender Offer (as such term is defined in the Company's Offer to
Purchase For Cash and Consent Solicitation dated January 21, 1997, as amended by
that Amended Offer to Purchase For Cash and Consent Solicitation dated February
20, 1997 (as so amended, the "Offer to Purchase")).
(b) In the event that the Company shall not have delivered such an
Officer's Certificate on or before March 12, 1997, or in the event that on or
before such date the Company shall have delivered an Officer's Certificate
stating that the Company will not accept the Securities validly tendered and not
withdrawn in the Tender Offer, this Second Supplemental Indenture shall be null
and void, nunc pro tunc.
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<PAGE>
(c) In its determination as to whether this Second Supplemental
Indenture has become operative, the Trustee shall be entitled to rely on an
Officer's Certificate delivered pursuant to (a) or (b) above, or the failure to
deliver such an Officer's Certificate described in (b) above.
ARTICLE TWO
SECTION 2.01. For all purposes of this Second Supplemental Indenture,
except as otherwise herein expressly provided or unless the context otherwise
requires: (i)the terms and expressions used herein shall have the same meanings
as corresponding terms and expressions used in the Indenture; and (ii)the words
"herein," "hereof," "hereby" and other words of similar import used in this
Second Supplemental Indenture refer to this Second Supplemental Indenture and
not to any particular section hereof.
SECTION 2.02. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect.
SECTION 2.03. This Second Supplemental Indenture shall form a part of the
Indenture for all purposes, and every Holder of Securities heretofore or
hereafter authenticated shall be bound hereby.
SECTION 2.04. This Second Supplemental Indenture may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same instrument.
SECTION 2.05. The Trustee makes no representation as to the validity or
sufficiency of this Second Supplemental Indenture.
SECTION 2.06. The Recitals contained herein shall be taken as the
statements of the Company and the Trustee assumes no responsibility for their
correctness.
SECTION 2.07. This Second Supplemental Indenture shall be deemed to be a
contract made under the laws of the State of New York and for all purposes shall
be governed by and construed in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
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<PAGE>
OLYMPIC FINANCIAL LTD.
By /s/ John A. Witham
-----------------------
John A. Witham
Executive Vice President and Chief
Financial Officer
Attest:
/s/ James D. Atkinson III
- --------------------------------
James D. Atkinson III
Senior Vice President, Corporate
Counsel and Secretary
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By /s/ Jane Schweiger
---------------------------
Name: Jane Schweiger
Title: Corporate Trust Officer
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<PAGE>
Execution Copy
SECOND AMENDMENT
TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is entered
into as of March 4, 1997 among OLYMPIC FINANCIAL LTD., a Minnesota corporation
(the "COMPANY"), the financial institutions signatory hereto (collectively, the
"LENDERS") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent
for the Lenders (the "AGENT").
WITNESSETH:
WHEREAS, the Company, the Agent and the Lenders are parties to a Credit
Agreement dated as of July 11, 1996 (as heretofore amended, the "CREDIT
AGREEMENT");
WHEREAS, Section 7.10(f) of the Credit Agreement permits the Company to
incur or suffer to exist unsecured Indebtedness evidenced by the Senior Notes
and Indebtedness that is incurred after the Effective Date that is not
Subordinated Debt if it is issued pursuant to an instrument no less favorable to
the Lenders and the Company than the Senior Notes Indenture;
WHEREAS, the Company desires to sell $300,000,000 of its 11.50% Senior
Notes due 2007 (the "NEW NOTES") pursuant to an indenture and supplemental
indenture relating to the New Notes (collectively, the "NEW INDENTURE") that the
Agent and the Lenders have not had an opportunity to completely review, and a
portion of the proceeds of such New Notes will be used to pay in full and retire
or defease all outstanding Senior Notes;
WHEREAS, the Company has provided to the Lenders and the Agent the
Description of Notes (the "RED HERRING DESCRIPTION") from Company's red herring
Prospectus dated February 21, 1997 describing the New Indenture and the New
Notes; and
WHEREAS, the Company has requested that the Credit Agreement be amended in
certain respects and has also requested the acknowledgement contained herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS.
Terms defined in the Credit Agreement and not otherwise
<PAGE>
defined herein are used herein as therein defined.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT AND ACKNOWLEDGEMENT.
2.1 AMENDMENTS TO CREDIT AGREEMENT. On the Effective Date (defined
below):
2.1.1 The definition of "Loan Documents" in Section 1.1 of the Credit
Agreement shall be amended by adding the following at the end of such
definition: "(including any Subsidiary Guaranty delivered pursuant to Section
7.21)."
2.1.2 The following Section 7.21 shall be added to the Credit
Agreement:
7.21 LIMITATION ON ISSUANCE OF GUARANTY OBLIGATIONS. The Company
will not permit any Subsidiary to create, incur, assume, suffer to exist,
or otherwise become or remain directly or indirectly liable with respect to
any Indebtedness referred to in clause (e) of the definition of
"Indebtedness" (a "GUARANTY OBLIGATION") relating to any Indebtedness of
the Company unless
(i) such Subsidiary simultaneously executes and delivers to the Agent
a guaranty of the Obligations in form and substance satisfactory to the
Agent (a "SUBSIDIARY GUARANTY"), together with such supporting
documentation as the Agent may reasonably request, and
(ii) if the Indebtedness guaranteed by the Guaranty Obligation is by
its terms subordinated to the Obligations, any such assumption, guaranty or
other liability of such Subsidiary with respect to such Indebtedness shall
be subordinated, in form and substance satisfactory to the Agent, to such
Subsidiary Guaranty to the same extent as such Indebtedness is subordinated
to the Obligations (IT BEING UNDERSTOOD that the Guaranty Obligation shall
be subordinated to the full amount of the Subsidiary Guaranty without
giving effect to any reduction thereto necessary to render the Subsidiary
Guaranty not voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer).
2.1.3 Section 8.1(k) of the Credit Agreement shall be amended by adding
the following language at the end of the section:
or an offer to purchase any of its 11.50% Senior Notes due 2007 ("New
Senior Notes") under Section 510 of the First Supplemental Indenture
dated as of March 12, 1997 between the Company and Norwest Bank
Minnesota,
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<PAGE>
National Association, as trustee (the "New Senior Notes Supplemental
Indenture").
2.1.4 Section 8.1(m) of the Credit Agreement shall be amended by adding
the following language at the end of the section:
or the Company is required to make any Change in Control Offer (as
defined in the New Senior Notes Supplemental Indenture) pursuant to
Section 509 of the New Senior Notes Supplemental Indenture and New
Senior Notes in an aggregate principal amount greater than $20,000,000
are tendered from time to time to the Company in response to any such
offer or offers.
2.1.5 Section 8.1 of the Credit Agreement shall be amended by adding
the following Section 8.1(o):
(o) GUARANTOR DEFAULTS. Any Subsidiary Guaranty entered into
pursuant to Section 7.21 shall cease to be in full force and effect
with respect to any Subsidiary party thereto, any such Subsidiary
shall fail to comply with or to perform any applicable provision of
such Subsidiary Guaranty, or any such Subsidiary (or any Person acting
by, through or on behalf of such Subsidiary) shall contest any manner
the validity, binding nature or enforceability of such Subsidiary
Guaranty.
2.2 ACKNOWLEDGMENT. The Required Lenders acknowledge for the benefit of
the Company that, after giving effect to the amendments set forth herein, based
solely upon their review of the Red Herring Description, the New Indenture will
not be deemed to be less favorable to the Company and the Lenders than the
Senior Notes Indenture; PROVIDED, that the New Indenture will contain revisions
from the Red Herring Description to the following effect (i) the definition of
"Permitted Liens" will be revised to permit "Liens on Receivables securing
Permitted Warehouse Debt" (or similar language) and (ii) the exception to the
covenant restricting "Incurrence of Indebtedness and Issuance of Preferred
Stock" covering guarantees between the Company and its "Restricted Subsidiaries"
will be revised to permit any "Restricted Subsidiary" that becomes a "Subsidiary
Guarantor" (as such terms are defined in the Red Herring Description) to
guarantee the Company's obligations under the Credit Agreement. This
acknowledgement shall not prevent the Lenders from asserting that the New
Indenture is less favorable to the Company and the Lenders than the Senior Notes
Indenture (and thus that the Company has breached Section 7.10(f) of the Credit
Agreement) upon completion of their review of the New Notes and New Indenture to
the extent of material matters not covered or not
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<PAGE>
accurately or completely covered by the Red Herring Description.
SECTION 3. CONDITIONS PRECEDENT.
The amendments to the Credit Agreement and the consent of the Lenders set
forth in SECTION 2 of this Amendment shall become effective on such date (the
"EFFECTIVE DATE") when the Agent shall have received all of the following, each
duly executed and dated the date hereof, and each in a sufficient number of
signed counterparts to provide one to each Lender:
(a) AMENDMENT. An original of this Amendment, duly executed by
the Company and the Required Lenders.
(b) OPINION. An opinion of Dorsey & Whitney LLP, counsel to the
Company, in form and substance satisfactory to the Agent.
(c) NEW INDENTURE. Copies, certified by the Secretary or an
Assistant Secretary of the Company, of the Indenture, dated as of
March 12, 1997, between the Company and Norwest Bank Minnesota,
National Association, as trustee (the "NEW TRUSTEE"), and the First
Supplemental Indenture thereto, dated as of March 12, 1997, between
the Company and the New Trustee, in relation to the New Notes.
(d) OTHER. Such other documents as the Agent or any Lender may
reasonably request.
SECTION 4. MISCELLANEOUS.
4.1 WARRANTIES TRUE AND ABSENCE OF DEFAULTS. In order to induce the Agent
and the Lenders to enter into this Amendment, the Company hereby warrants to the
Agent and the Lenders that, as of the date hereof and the Effective Date:
(a) The representations and warranties set forth in Article V of
the Credit Agreement (other than as set forth in the last sentence of
Section 5.5 of the Credit Agreement) and in the Pledge and Security
Agreement are true and correct (except to the extent such
representations and warranties expressly refer to an earlier date, in
which case they shall be true and correct as of such earlier date).
(b) No Event of Default or Unmatured Event of Default exists.
4.2 GOVERNING LAW. This Amendment shall be a contract made under and
governed by the law of the State of New York.
4
<PAGE>
4.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when so executed and delivered, shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
4.4 REFERENCES TO DOCUMENTS. Except as amended hereby, the Credit
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. On and after the effectiveness hereof, each
reference in the Credit Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import, and each reference to the Credit Agreement in
any Note or in any other Loan Document, shall be deemed a reference to the
Credit Agreement, as amended hereby.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
and year first above written.
OLYMPIC FINANCIAL LTD.
By: /s/ Michael J. Sherman
-------------------------
Title:
----------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ Bridget [illegible]
-------------------------
Title: Managing Director
----------------------
BANK OF AMERICA ILLINOIS, as a
Lender
By: /s/ Bridget [illegible]
-------------------------
Title: Managing Director
----------------------
FIRST BANK NATIONAL ASSOCIATION, as
Co-Manager and as a Lender
By: /s/ [illegible]
-------------------------
Title: Vice President
----------------------
COMERICA BANK
By: /s/ David [illegible]
-------------------------
Title: Vice President
----------------------
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<PAGE>
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK, CAYMAN ISLAND
BRANCH
By: /s/ Bruce Ritz
-------------------------
Title: Vice President
----------------------
By: /s/
-------------------------
Title:
----------------------
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES
By: /s/ Thomas J. Nodramia
-------------------------
Title: Vice President
----------------------
By: /s/ Christopher E. Sarisky
-------------------------
Title: Assistant Treasurer
----------------------
THE SUMITOMO BANK, LIMITED
By: /s/ Michael J. Phillippe
---------------------------
Title: Vice President & Manager
---------------------------
By: /s/ Beth C. Mcginnis
-------------------------
Title: Vice President
----------------------
7
