<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 1997
REGISTRATION NO. 333-34977
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MATRIX CAPITAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COLORADO 6162 84-1233716
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
1380 LAWRENCE STREET, SUITE 1410 DENVER, COLORADO 80204
(303) 595-9898
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
GUY A. GIBSON
PRESIDENT
MATRIX CAPITAL CORPORATION
1380 LAWRENCE STREET, SUITE 1410
DENVER, COLORADO 80204
(303) 595-9898
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
RONALD J. FRAPPIER, ESQ. GORDON M. BAVA, P.C.
T. ALLEN MCCONNELL, ESQ. MANATT, PHELPS & PHILLIPS, LLP
JENKENS & GILCHRIST, A PROFESSIONAL 11355 W. OLYMPIC BOULEVARD
CORPORATION LOS ANGELES, CALIFORNIA 90064
1445 ROSS AVENUE, SUITE 3200
DALLAS, TEXAS 75202
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 to the Registration Statement is being filed solely to
state the expenses associated with the issuance and distribution of the
securities and to effect the filing of the Exhibits contained herein.
Accordingly, this Amendment No. 1 to the Registration Statement omits the
Prospectus included in the forepart of the Registration Statement and all
items of Part II of the Registration Statement other than the expenses
included in Item 13, Other Expenses of Issuance and Distribution, and the
index to exhibits included in Item 16, Exhibits.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $ 6,061
NASD fee........................................................... 2,500
Trustees' fees and expenses........................................ 5,000
Legal fees and expenses............................................ 80,000
Blue Sky fees and expenses......................................... 2,500
Accounting fees and expenses....................................... 50,000
Printing expenses.................................................. 75,000
Miscellaneous expenses............................................. 13,939
--------
Total............................................................ $235,000
========
</TABLE>
ITEM 16. EXHIBITS
(a) Exhibits
<TABLE>
<C> <S>
1.1* Form of Purchase Agreement
3.1+ Form of Amended and Restated Articles of Incorporation of Matrix
Capital Corporation (3.1)
3.2+ Form of Bylaws of Matrix Capital Corporation, as amended (3.2)
4.1* Form of Indenture by and among the Registrant and First Trust National
Association, as Trustee, relating to the Notes
4.2+ Specimen Certificate for Common Stock of Matrix Capital (4.1)
4.3+ Form of Amended and Restated 1996 Stock Option Plan (4.2)
4.4++ Form of Employee Stock Purchase Plan, as amended (4.1)
5.1* Opinion of Jenkens & Gilchrist, a Professional Corporation, regarding
the validity of the Notes
10.1+ Note and Agency Agreement, dated as of August 1, 1995, by and between
the Registrant and PHS Mortgage, Inc. as agent (10.1)
10.2+ First Amendment to Note and Agency Agreement, dated as of August 2,
1995, by and between the Registrant and PHS Mortgage, Inc., as agent
(10.2)
10.3+ Form of 13% Senior Subordinated Note (10.3)
10.4+ Executive Employment Agreement, dated as of January 1, 1996, by and
between the Registrant and David W. Kloos (10.4)
10.5+ Employment Agreement, dated as of January 1, 1995, between Matrix
Capital Bank and Gary Lenzo and as amended January 1, 1996 (10.5)
10.6+ Loan Agreement, dated as of October 2, 1995, by and between Matrix
Diversified, Inc. and the Registrant (10.6)
10.7+ Multiple Advance Term Loan Agreement, dated as of June 27, 1994, by and
between Matrix Capital Corporation and CorTrust Bank (10.8)
10.8+ Multiple Advance Fixed Rate Term Loan Promissory Note, dated as of June
30, 1994, from Matrix Capital Corporation, as maker, to CorTrust Bank,
as payee (10.9)
10.9+ Mortgage Loan Purchase and Servicing Agreement, dated as of August 1,
1993, by and between Argo Federal Savings Bank, FSB, and Matrix
Financial Services Corporation (10.11)
10.10+ Mortgage Loan Repurchase Agreement, dated as of March 30, 1995, by and
between PaineWebber Real Estate Securities, Inc. and Matrix Financial
Services Corporation (10.27)
10.11+ Multiple Advance Fixed Rate Term Loan Promissory Note, dated as of
October 19, 1994, from Matrix Capital Corporation, as maker, to
CorTrust, as payee (10.29)
10.12+ Assignment and Assumption Agreement, dated as of June 28, 1996, by and
among Mariano C. DeCola, William M. Howdon, R. James Nicholson and
Matrix Funding Corp. (10.30)
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
10.13+ Development Management Agreement, dated as of June 28, 1996, by and
among Fort Lupton, L.L.C. and Matrix Funding Corp. (10.31)
10.14+ Assignment and Assumption of PUD Agreement, dated as of June 28,
1996, by and among Fort Lupton, L.L.C. and Matrix Funding Corp.
(10.32)
10.15+ Lease, dated as of October 1, 1995, by and between the Registrant
and Matrix Financial Services Corporation (10.33)
10.16+ Promissory Note, dated as of December 31, 1995, from D. Mark
Spencer, as maker, to the Registrant, as payee (10.35)
10.17+ Fort Lupton Golf course Residential and Planned Unit Development
Agreement, dated as of November 28, 1995 (10.36)
10.18+ Loan Agreement, dated as of December 10, 1994, by and between the
Registrant and Bankers' Bank of the West (10.37)
10.19+ Continuing Guaranty of D. Mark Spencer, dated as of December 10,
1994 (10.38)
10.20+ Continuing Guaranty of Richard V. Schmitz, dated as of December 10,
1994 (10.39)
10.21+ Continuing Guaranty of Guy A. Gibson, dated as of December 10, 1994
(10.40)
10.22+ Loan Agreement, dated as of June 21, 1996, by and between Matrix
Funding Corporation and The First Security Bank (10.41)
10.23+ Loan Agreement, dated as of June 29, 1995, by and between the
Registrant and Bank One, Arizona, N.A. (10.42)
10.24+ Promissory Note, dated as of June 29, 1995, from the Registrant to
Bank One, Arizona, N.A. (10.43)
10.25+ Deed of Trust, Assignment of Rents, Security Agreement and Fixture
Filing, dated as of June 29, 1995, from the Registrant to Arizona
Trust Deed Corporation, as trustee (10.44)
10.26+ Loan Agreement, dated July 10, 1992, by and between American
Strategic Income Portfolio Inc. and Matrix Financial Services
Corporation (10.45)
10.27+ Promissory Note, dated as of July 10, 1992, by Matrix Financial
Services Corporation, as maker, to American Strategic Income
Portfolio, Inc., as payee (10.46)
10.28+++ Agreement and Plan of Merger, dated as of November 22, 1996, by and
among the Registrant, The Vintage Group, Inc. and Matrix/Vintage
Acquisition, Inc. (10.1)
10.29+++ Asset Purchase and Exchange Agreement, dated as of February 4, 1997,
by and among the Registrant and STC Holdings, Inc. (10.2)
10.30++++ Lease, dated as of October 1, 1996, by and between the Registrant
and Creative Networks, LLC
10.31++++ Revolving Subordinated Loan Agreement, dated as of October 18, 1996,
by and between Matrix Financial Services Corporation and the
Registrant
10.32++++ Amended and Restated Loan Agreement, dated as of January 31, 1997,
by and between Matrix Financial Services Corporation, as borrower,
and Bank One, Texas, N.A., as agent, and certain lenders, as lenders
10.33++++ Amended and Restated Warehouse Note, dated as of January 31, 1997,
from Matrix Financial Services Corporation, as borrower, and Bank
One, Texas, N.A., as lender
10.34++++ Amended and Restated Swing Note, dated as of January 31, 1997, from
Matrix Financial Services Corporation, as borrower, and Bank One,
Texas, N.A., as lender
10.35++++ Amended and Restated Working-Capital Note, dated as of January 31,
1997, from Matrix Financial Services Corporation, as borrower, and
Bank One, Texas, N.A., as lender
10.36++++ Amended and Restated Term-Line Note, dated as of January 31, 1997,
from Matrix Financial Services Corporation, as borrower, and Bank
One, Texas, N.A., as lender
10.37++++ Amended and Restated Guaranty, dated as of January 31, 1997, from
the Registrant to Bank One, Texas, N.A.
10.38++++ Employment Agreement, dated as of February 4, 1997, by and between
the Registrant and Paul Skretny
10.39++++ Credit Agreement, dated as of March 12, 1997, by and between Matrix
Capital Corporation, as borrower, and Bank One, Texas, N.A., as
agent, and certain lenders, as lenders
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
10.40++++ Term Note, dated as of March 12, 1997, from Matrix Capital Corporation, as borrower, and Bank One,
Texas, N.A., as lender
10.41++++ Revolving Note, dated as of March 12, 1997, from Matrix Capital Corporation, as borrower, and Bank
One, Texas, N.A., as lender
10.42++++ Guaranty Form, dated as of March 12, 1997, from each of the Registrant's significant subsidiaries to
Bank One, Texas, N.A.,as agent
11.1** Statement regarding computation of per share earnings
12.1** Statement regarding computation of ratios
21.1++++ Subsidiaries of the Registrant
23.1** Consent of Ernst & Young LLP
23.2 Consent of Jenkens & Gilchrist, a Professional Corporation (included in Exhibit 5.1 above)
24.1** Power of Attorney (set forth on the signature page to this Registration Statement)
25.1* Statement of Eligibility on Form T-1 of First Trust National Association, as Trustee
</TABLE>
- --------
*Filed herewith.
**Previously filed.
+ Incorporated by reference from the exhibit number shown in parenthesis
from the Registrant's registration statement on Form S-1 (No. 333-10223),
filed by the Registrant with the Commission.
++ Incorporated by reference from the exhibit number shown in parenthesis
form the Registrant's quarterly report on Form 10-Q for the quarter ended
September 30, 1996, filed by the Registrant with the Commission.
+++ Incorporated by reference from the exhibit number shown in parenthesis
from the Registrant's current report on Form 8-K, filed with the
Commission on February 20, 1997.
++++ Incorporate by reference from the exhibit number shown in parenthesis
from the Registrant's annual report on Form 10-K for the fiscal year
ended December 31, 1996, filed by the Registrant with the Commission.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF DENVER, STATE OF COLORADO, ON THE 19TH DAY OF SEPTEMBER, 1997.
Matrix Capital Corporation
*
By:__________________________________
GUY A. GIBSON
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
President, Chief
* Executive Officer, September 19,
- ------------------------------------- and Director 1997
GUY A. GIBSON (Principal
Executive Officer)
Chairman of the
* Board September 19,
- ------------------------------------- 1997
RICHARD V. SCHMITZ
Vice Chairman of the
* Board September 19,
- ------------------------------------- 1997
D. MARK SPENCER
Director
* September 19,
- ------------------------------------- 1997
THOMAS M. PIERCY
/s/ David W. Kloos Senior Vice
- ------------------------------------- President, Chief September 19,
DAVID W. KLOOS Financial Officer, 1997
and Director
(Principal
Accounting and
Financial Officer)
II-4
<PAGE>
SIGNATURE TITLE DATE
Director
* September 19,
- ------------------------------------- 1997
STEPHEN SKIBA
Director
* September 19,
- ------------------------------------- 1997
DAVID A. FRANK
*By: /s/ David W. Kloos
---------------------------------
DAVID W. KLOOS,
ATTORNEY-IN-FACT
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
------- ------------------------------------------------------- ------------
<C> <S> <C>
1.1* Form of Purchase Agreement
3.1+ Form of Amended and Restated Articles of Incorporation
of Matrix Capital Corporation (3.1)
3.2+ Form of Bylaws of Matrix Capital Corporation, as
amended (3.2)
4.1* Form of Indenture by and among the Registrant and First
Trust National Association, as Trustee, relating to the
Notes
4.2+ Specimen Certificate for Common Stock of Matrix Capital
(4.1)
4.3+ Form of Amended and Restated 1996 Stock Option Plan
(4.2)
4.4++ Form of Employee Stock Purchase Plan, as amended (4.1)
5.1* Opinion of Jenkens & Gilchrist, a Professional
Corporation, regarding the validity of the Notes
10.1+ Note and Agency Agreement, dated as of August 1, 1995,
by and between the Registrant and PHS Mortgage, Inc. as
agent (10.1)
10.2+ First Amendment to Note and Agency Agreement, dated as
of August 2, 1995, by and between the Registrant and
PHS Mortgage, Inc., as agent (10.2)
10.3+ Form of 13% Senior Subordinated Note (10.3)
10.4+ Executive Employment Agreement, dated as of January 1,
1996, by and between the Registrant and David W. Kloos
(10.4)
10.5+ Employment Agreement, dated as of January 1, 1995,
between Matrix Capital Bank and Gary Lenzo and as
amended January 1, 1996 (10.5)
10.6+ Loan Agreement, dated as of October 2, 1995, by and
between Matrix Diversified, Inc. and the Registrant
(10.6)
10.7+ Multiple Advance Term Loan Agreement, dated as of June
27, 1994, by and between Matrix Capital Corporation and
CorTrust Bank (10.8)
10.8+ Multiple Advance Fixed Rate Term Loan Promissory Note,
dated as of June 30, 1994, from Matrix Capital
Corporation, as maker, to CorTrust Bank, as payee (10.9)
10.9+ Mortgage Loan Purchase and Servicing Agreement, dated
as of August 1, 1993, by and between Argo Federal
Savings Bank, FSB, and Matrix Financial Services
Corporation (10.11)
10.10+ Mortgage Loan Repurchase Agreement, dated as of March
30, 1995, by and between PaineWebber Real Estate
Securities, Inc. and Matrix Financial Services
Corporation (10.27)
10.11+ Multiple Advance Fixed Rate Term Loan Promissory Note,
dated as of October 19, 1994, from Matrix Capital
Corporation, as maker, to CorTrust, as payee (10.29)
10.12+ Assignment and Assumption Agreement, dated as of June
28, 1996, by and among Mariano C. DeCola, William M.
Howdon, R. James Nicholson and Matrix Funding Corp.
(10.30)
10.13+ Development Management Agreement, dated as of June 28,
1996, by and among Fort Lupton, L.L.C. and Matrix
Funding Corp. (10.31)
10.14+ Assignment and Assumption of PUD Agreement, dated as of
June 28, 1996, by and among Fort Lupton, L.L.C. and
Matrix Funding Corp. (10.32)
10.15+ Lease, dated as of October 1, 1995, by and between the
Registrant and Matrix Financial Services Corporation
(10.33)
10.16+ Promissory Note, dated as of December 31, 1995, from D.
Mark Spencer, as maker, to the Registrant, as payee
(10.35)
10.17+ Fort Lupton Golf course Residential and Planned Unit
Development Agreement, dated as of November 28, 1995
(10.36)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
------- ----------------------------------------------------- ------------
<C> <S> <C>
10.18+ Loan Agreement, dated as of December 10, 1994, by and
between the Registrant and Bankers' Bank of the West
(10.37)
10.19+ Continuing Guaranty of D. Mark Spencer, dated as of
December 10, 1994 (10.38)
10.20+ Continuing Guaranty of Richard V. Schmitz, dated as
of December 10, 1994 (10.39)
10.21+ Continuing Guaranty of Guy A. Gibson, dated as of
December 10, 1994 (10.40)
10.22+ Loan Agreement, dated as of June 21, 1996, by and
between Matrix Funding Corporation and The First
Security Bank (10.41)
10.23+ Loan Agreement, dated as of June 29, 1995, by and
between the Registrant and Bank One, Arizona, N.A.
(10.42)
10.24+ Promissory Note, dated as of June 29, 1995, from the
Registrant to Bank One, Arizona, N.A. (10.43)
10.25+ Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing, dated as of June 29,
1995, from the Registrant to Arizona Trust Deed
Corporation, as trustee (10.44)
10.26+ Loan Agreement, dated July 10, 1992, by and between
American Strategic Income Portfolio Inc. and Matrix
Financial Services Corporation (10.45)
10.27+ Promissory Note, dated as of July 10, 1992, by Matrix
Financial Services Corporation, as maker, to American
Strategic Income Portfolio, Inc., as payee (10.46)
10.28+++ Agreement and Plan of Merger, dated as of November
22, 1996, by and among the Registrant, The Vintage
Group, Inc. and Matrix/Vintage Acquisition, Inc.
(10.1)
10.29+++ Asset Purchase and Exchange Agreement, dated as of
February 4, 1997, by and among the Registrant and STC
Holdings, Inc. (10.2)
10.30++++ Lease, dated as of October 1, 1996, by and between
the Registrant and Creative Networks, LLC
10.31++++ Revolving Subordinated Loan Agreement, dated as of
October 18, 1996, by and between Matrix Financial
Services Corporation and the Registrant
10.32++++ Amended and Restated Loan Agreement, dated as of
January 31, 1997, by and between Matrix Financial
Services Corporation, as borrower, and Bank One,
Texas, N.A., as agent, and certain lenders, as
lenders
10.33++++ Amended and Restated Warehouse Note, dated as of
January 31, 1997, from Matrix Financial Services
Corporation, as borrower, and Bank One, Texas, N.A.,
as lender
10.34++++ Amended and Restated Swing Note, dated as of January
31, 1997, from Matrix Financial Services Corporation,
as borrower, and Bank One, Texas, N.A., as lender
10.35++++ Amended and Restated Working-Capital Note, dated as
of January 31, 1997, from Matrix Financial Services
Corporation, as borrower, and Bank One, Texas, N.A.,
as lender
10.36++++ Amended and Restated Term-Line Note, dated as of
January 31, 1997, from Matrix Financial Services
Corporation, as borrower, and Bank One, Texas, N.A.,
as lender
10.37++++ Amended and Restated Guaranty, dated as of January
31, 1997, from the Registrant to Bank One, Texas,
N.A.
10.38++++ Employment Agreement, dated as of February 4, 1997,
by and between the Registrant and Paul Skretny
10.39++++ Credit Agreement, dated as of March 12, 1997, by and
between Matrix Capital Corporation, as borrower, and
Bank One, Texas, N.A., as agent, and certain lenders,
as lenders
10.40++++ Term Note, dated as of March 12, 1997, from Matrix
Capital Corporation, as borrower, and Bank One,
Texas, N.A., as lender
10.41++++ Revolving Note, dated as of March 12, 1997, from
Matrix Capital Corporation, as borrower, and Bank
One, Texas, N.A., as lender
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
------- ----------------------------------------------------- ------------
<C> <S> <C>
10.42++++ Guaranty Form, dated as of March 12, 1997, from each
of the Registrant's significant subsidiaries to Bank
One, Texas, N.A.,as agent
11.1** Statement regarding computation of per share earnings
12.1** Statement regarding computation of ratios
21.1++++ Subsidiaries of the Registrant
23.1** Consent of Ernst & Young LLP
23.2 Consent of Jenkens & Gilchrist, a Professional
Corporation (included in Exhibit 5.1 above)
24.1** Power of Attorney (set forth on the signature page to
this Registration Statement)
25.1* Statement of Eligibility on Form T-1 of First Trust
National Association, as Trustee
</TABLE>
- --------
*Filed herewith.
**Previously filed.
+ Incorporated by reference from the exhibit number shown in parenthesis
from the Registrant's registration statement on Form S-1 (No. 333-10223),
filed by the Registrant with the Commission.
++ Incorporated by reference from the exhibit number shown in parenthesis
form the Registrant's quarterly report on Form 10-Q for the quarter ended
September 30, 1996, filed by the Registrant with the Commission.
+++ Incorporated by reference from the exhibit number shown in parenthesis
from the Registrant's current report on Form 8-K, filed with the
Commission on February 20, 1997.
++++ Incorporate by reference from the exhibit number shown in parenthesis
from the Registrant's annual report on Form 10-K for the fiscal year
ended December 31, 1996, filed by the Registrant with the Commission.
<PAGE>
EXHIBIT 1.1
$20,000,000
MATRIX CAPITAL CORPORATION
______% SENIOR NOTES DUE 2004
PURCHASE AGREEMENT
PIPER JAFFRAY INC. September ___, 1997
KEEFE, BRUYETTE & WOODS, INC.
c/o Piper Jaffray Inc.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
Pursuant to the terms of this Purchase Agreement (this "Agreement"),
Matrix Capital Corporation, a Colorado corporation (the "Company"), proposes to
sell to the underwriters named in Schedule I hereto (the "Underwriters")
$20,000,000 in aggregate principal amount of its ____% Senior Notes due 2004
(the "Notes"). The Notes are to be sold to the Underwriters, acting severally
and not jointly in such amounts as are set forth in Schedule I hereto opposite
the name of such Underwriter. The Notes are to be issued pursuant to an
Indenture (the "Indenture"), to be dated as of September ___, 1997, among the
Company and First Trust National Association, as trustee (the "Trustee").
The Company hereby confirms its agreement with respect to the purchase
and sale of the Notes:
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
-------------------------------------
filed with the Securities and Exchange Commission (the "Commission") in
conformity with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations (the "Rules and Regulations") of the Commission
thereunder (collectively, the "Act"), a registration statement on Form S-1 (File
No. 333-34977), including a preliminary prospectus and a Statement of
Eligibility on Form T-1 with respect to the Trustee (File No. 22-27000) pursuant
to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
relating to the Notes; one or more amendments to such registration statement
have also been so prepared and have been, or will be, so filed; and, if the
Company has elected to rely upon Rule 462(b) under the Act to increase the size
of the offering registered under the Act, the Company will prepare and file with
the Commission a registration statement with respect to such increase pursuant
to Rule 462(b). Copies of such registration statement(s) and amendments and each
related preliminary prospectus have been delivered to you.
1
<PAGE>
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
Closing Date (as hereinafter defined), such registration statement as so amended
(but only from and after the effectiveness of such amendment), including a
registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and
Regulations, is hereinafter called the "Registration Statement." The prospectus
included in the Registration Statement at the time it is or was declared
effective by the Commission is hereinafter called the "Prospectus," except that
if any prospectus (including any term sheet meeting the requirements of Rule 434
of the Rules and Regulations provided by the Company for use with a prospectus
subject to completion within the meaning of Rule 434 in order to meet the
requirements of Section 10(a) of the Rules and Regulations) filed by the Company
with the Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the
Rules and Regulations or any other such prospectus provided to the Underwriters
by the Company for use in connection with the offering of the Notes (whether or
not required to be filed by the Company with the Commission pursuant to Rule
424(b) of the Rules and Regulations) differs from the prospectus on file at the
time the Registration Statement is or was declared effective by the Commission,
the term "Prospectus" shall refer to such differing prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations) from and
after the time such prospectus is filed with the Commission or transmitted to
the Commission for filing pursuant to such Rule 424(b) (and Rule 434, if
applicable) or from and after the time it is first provided to the Underwriters
by the Company for such use. The term "Preliminary Prospectus" as used herein
means any preliminary prospectus included in the Registration Statement prior to
the time it becomes or became effective under the Act and any prospectus subject
to completion as described in Rule 430A or 434 of the Rules and Regulations. Any
reference to any amendment or supplement to the Prospectus (including any
supplement to the Prospectus) shall be deemed to refer to and include any
documents filed after the date of such Prospectus under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated therein by
reference.
2. AGREEMENT TO SELL AND PURCHASE. On the basis of the representations,
------------------------------
warranties and agreements of the Company herein contained and subject to the
terms and conditions set forth herein, the Company hereby agrees to issue and
sell to the Underwriters, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the purchase price of $______ per
$1,000 principal amount, the aggregate principal amount of Notes set forth
opposite the name
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of such Underwriter in Schedule I hereto (or such aggregate principal amount of
Notes as such Underwriter shall be obligated to purchase pursuant to the
provisions of Section 10 hereof).
3. TERMS OF PUBLIC OFFERING. The Company is advised by the Underwriters
------------------------
that the Underwriters have agreed, severally and not jointly, to make a public
offering of their respective portions of the Notes as soon after the
Registration Statement has become effective and this Agreement has been executed
as in the judgment of the Underwriters is advisable and to first offer the Notes
upon the terms set forth in the Prospectus.
4. DELIVERY OF THE NOTES AND PAYMENT THEREFOR. The Notes to be purchased
------------------------------------------
by each Underwriter in book-entry form and in authorized denominations and
registered in the name of the nominee of The Depository Trust Company, shall be
delivered by or on behalf of the Company through the facilities of The
Depository Trust Company for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks or wire transfer of same day funds payable to the
order of the Company at the offices of Jenkens & Gilchrist, a Professional
Corporation, 1445 Ross Avenue, Suite 3200, Dallas, Texas 75202, at 8:00 a.m.,
Dallas time, on the third (or if the Notes are priced, as contemplated by Rule
15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time on the date of
this Agreement, the fourth) business day following the date of this Agreement,
(the "Closing Date"). The place of the closing and the Closing Date may be
varied by agreement among the Underwriters and the Company. Delivery of the
Notes may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Underwriters.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
-------------------------
Underwriters as follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to cause the
Registration Statement and any post-effective amendments thereto to become
effective as promptly as possible; the Company will notify you promptly of the
time when the Registration Statement or any post-effective amendment to the
Registration Statement has become effective or any supplement to the Prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or
additional information; if the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus (or term
sheet within the meaning of Rule 434 of the Rules and Regulations) containing
the information omitted therefrom pursuant to Rule 430A of the Rules and
Regulations with the Commission within the time period required by, and
otherwise in accordance with the provisions of, Rules 424(b), 430A and 434, if
applicable, of the Rules and Regulations; if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size of the
offering registered under the Act, the Company will prepare and file a
registration statement with respect to such increase with the Commission within
the time period required by, and otherwise in accordance with the provisions
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of, Rule 462(b); the Company will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration Statement
or Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) that, in your opinion, may be necessary or advisable in
connection with the distribution of the Notes by the Underwriters; and the
Company will not file any amendment or supplement to the Registration Statement
or Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) to which you shall reasonably object by notice to the
Company after having been furnished a copy a reasonable time prior to the
filing.
(ii) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Notes for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose; and the Company will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(iii) Within the time during which a prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) relating to
the Notes is required to be delivered under the Act, the Company will comply as
far as it is able with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
force, so far as is necessary to permit the continuance of sales of or dealings
in the Notes as contemplated by the provisions hereof and the Prospectus. If
during such period any event occurs as a result of which the Prospectus would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the Act, the
Company will promptly notify you and will amend the Registration Statement or
supplement the Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(iv) The Company will furnish to each of the Underwriters and their
counsel, without charge, one signed copy of the Registration Statement and of
each amendment thereto, including all exhibits thereto and documents
incorporated therein by reference, and will also furnish to each of the
Underwriters, without charge, such number of conformed copies of the
Registration Statement and of each amendment thereto as each of the Underwriters
may reasonably request.
(v) Prior to the effective date of the Registration Statement, the
Company will have delivered or will deliver to each Underwriter, without charge,
copies of each form of preliminary prospectus in such quantities as such
Underwriter has reasonably requested or may hereafter reasonably request for the
purposes contemplated by the Act.
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(vi) On the effective date of the Registration Statement and
thereafter from time to time during such period as in the opinion of counsel for
the Underwriters a prospectus is required by law to be delivered in connection
with offers or sales of the Notes by an Underwriter or a dealer, the Company
will deliver to each Underwriter and dealer, without charge, as many copies of
the Prospectus (and of any amendment or supplement thereto) as they may
reasonably request. During such period, if any event occurs which in the
judgment of the Company, or in the opinion of counsel for the Underwriters,
should be set forth in the Prospectus in order to ensure that no part of the
Prospectus includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances at the time the Prospectus is delivered to a purchaser, not
misleading, the Company will forthwith prepare, submit to the Underwriters, file
with the Commission and deliver, without charge to the several Underwriters and
dealers (whose names and addresses will be furnished by the Underwriters to the
Company) to whom Notes have been sold by the Underwriters or to other dealers
upon request, an amendment or supplement, as appropriate, to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented, will
comply with the standards set forth in this sentence. The Company consents to
the use of such Prospectus (and of any amendments or supplements thereto) in
accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions described in the preliminary Blue Sky memorandum in
which the Notes are lawfully offered by the several Underwriters and by all
dealers to whom Notes may be sold, both in connection with the offering or sale
of the Notes and for such period of time thereafter as the Prospectus is
required by law to be delivered in connection therewith. In case any
Underwriter is required to deliver a Prospectus (and any amendment or supplement
thereto) more than nine months after the first date upon which the Notes are
offered to the public, the Company will, upon the request of the Underwriters
but at the expense of such Underwriter, furnish such Underwriter with reasonable
quantities of a Prospectus complying with Section 10(a)(3) of the Act.
(vii) The Company will cooperate with the Underwriters and counsel for
the Underwriters in connection with the registration or qualification of the
Notes for offer and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Underwriters may
designate and will file such consents to service of process or other documents
as may be necessary in order to effect such registration or qualification;
provided that in no event shall the Company be obligated (w) to qualify to do
business in any jurisdiction where it is not now so qualified, (x) to file any
general consent to service of process, (y) take any action that would subject it
to income taxation in any jurisdiction where it is not so qualified or (z) to
take any action to amend its Articles of Incorporation in order to make the
Company's securities eligible for registration or qualification in any state.
(viii) The Company will make generally available to the holders of
Notes an earnings statement of the Company and its subsidiaries, which need not
be audited, as soon as practicable but not later than 18 months after the
effective date of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including Rule 158).
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(ix) For a period of five years after the date of this Agreement:
(A) the Company will furnish to the Underwriters (1) as soon
as available, a copy of each report of the Company of general interest mailed to
any class of its security holders, (2) copies of all annual, quarterly reports
and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K and
any amendment thereto or such other similar forms as may be designated by the
Commission or required to be filed by the Company pursuant to Sections 13, 14
and 15 of the Exchange Act, which the Company agrees to timely file with the
Commission for so long as may be required, (3) a copy of each report furnished
to or filed with any securities exchange or the National Market of the National
Association of Securities Dealers Automated Quotation System ("Nasdaq National
Market"), (4) if the Company or any Subsidiary affects a Securitization (as such
term is defined in the Indenture), all periodic master servicing reports for
each Securitization Trust (as such term is defined in the Indenture) related to
any such Securitization and (5) from time to time, such other information
concerning the Company as the Underwriters may reasonably request; and
(B) if at any time during such five-year period, the Company
shall cease filing with the Commission the annual, quarterly reports and current
reports on Forms 10-K, 10-Q and 8-K or other similar forms referred to in clause
(A) above, the Company will forward to the Underwriters (1) as soon as
practicable after the end of each fiscal year, copies of a balance sheet and
statements of income and retained earnings of the Company as of the end of and
for such fiscal year, audited by independent public accountants, and (2) as soon
as practicable after the end of each quarterly fiscal period, except for the
last quarterly fiscal period in each fiscal year, a summary statement (which
need not be audited) of income and retained earnings of the Company for such
period, which shall also be made publicly available.
If and so long as the Company shall have any subsidiaries, the financial
statements referred to above shall be consolidated to the extent the accounts of
the Company and such subsidiaries are consolidated, and separate financial
statements shall be furnished for each significant subsidiary, as defined in
Regulation S-X of the Commission, whose accounts are not so consolidated.
(x) Prior to the Closing Date, the Company will issue no press
release or other public communication directly or indirectly and hold no press
conference with respect to the Company or any subsidiary or this offering,
without the Underwriters' prior written consent.
(xi) Company will pay, or reimburse if paid by the Underwriters,
whether or not the transactions contemplated hereby are consummated or this
Agreement is prevented from becoming effective under the provisions of Section
11 hereof or is terminated, all costs and expenses incident to the performance
by it of its obligations under this Agreement including, without limiting the
generality of the foregoing, (1) typesetting, printing, duplicating, and filing
(and all preparation therefor) and distribution (including, without limitation,
postage, air freight charges and charges for counting and packaging) of the
original registration statement, the Registration Statement, each Preliminary
Prospectus, the Prospectus, each amendment and/or
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<PAGE>
supplement to any of the foregoing, and this Agreement and other underwriting
documents and the Indenture, (2) all costs of furnishing to the several
Underwriters and dealers copies of the foregoing materials, (3) the
registrations or qualifications referred to in paragraph (viii) above (including
reasonable fees and disbursements of counsel in connection therewith) and
expenses of printing and delivering to the several Underwriters copies of the
preliminary and final Blue Sky memorandum, (4) the review of the terms of the
public offering of the Notes by the National Association of Securities Dealers,
Inc. (the "NASD") (including the filing fees paid to the NASD in connection
therewith) and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith, (5) the performance by the Company of its
other obligations under this Agreement, including the fees of the Company's
counsel and accountants, (6) the issuance of the Notes and the preparation and
printing of the certificates representing the Notes, (7) the fees and expenses
of the Trustee and any agent of the Trustee and any transfer or paying agent for
the Company, (8) all travel, lodging and reasonable living expenses incurred by
the Company in connection with marketing, dealer and other meetings attended by
the Company and the Underwriters in marketing the Notes, (9) listing fees, if
any, (10) any fees charged by security rating services for rating the Notes and
(11) furnishing to the several Underwriters copies of all reports and
information required by paragraph (x) above, including costs of shipping and
mailing.
(xii) If the sale of the Notes provided for herein is not consummated
by reason of action by the Company pursuant to Section 11 hereof which prevents
this Agreement from becoming effective, or by reason of any failure, refusal or
inability on the part of the Company to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled, the Company
will reimburse the several Underwriters for all out-of-pocket disbursements
(including fees and disbursements of counsel) incurred by the Underwriters in
connection with their investigation, preparing to market and marketing the Notes
or in contemplation of performing their obligations hereunder. The Company
shall not in any event be liable to any of the Underwriters for loss of
anticipated profits from the transactions covered by this Agreement.
(xiii) The Company will apply the net proceeds from the sale of the
Notes to be sold by it under this Agreement for the purposes set forth in the
Prospectus under the caption "Use of Proceeds."
(xiv) The Company will comply (1) with all registration, filing and
reporting requirements of the Exchange Act which may from time to time be
applicable to the Company and (2) all provisions of all undertakings contained
in the Registration Statement.
(xv) The Company will not incur any liability for any finder's or
broker's fee or agent's commission in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby.
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(xvi) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Notes.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
---------------------------------------------
and warrants to each Underwriter that:
(i) Each Preliminary Prospectus, at the time of filing thereof, did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in or omissions from any
Preliminary Prospectus in reliance upon, and in conformity with, information
furnished in writing to the Company by any Underwriter expressly for use in the
Prospectus.
(ii) As of the time the Registration Statement (or any post-effective
amendment thereto) is or was declared effective by the Commission, upon the
filing or first delivery to the Underwriters of the Prospectus (or any
supplement to the Prospectus (including any term sheet meeting the requirements
of Rule 434)) and at the Closing Date, (A) the Registration Statement and
Prospectus (in each case, as so amended or supplemented) conformed or will
conform in all material respects to the requirements of the Act and Regulations,
(B) the Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and (C) the Prospectus (as so supplemented) did not or will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances in which they are or were made, not misleading; provided,
however, that this representation and warranty shall not apply to the Statement
of Eligibility of the Trustee on Form T-1 filed as an Exhibit to the
Registration Statement or to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by any
Underwriter specifically for use in the preparation of the Registration
Statement or the Prospectus (in each case, as amended or supplemented). The
Registration Statement has been declared effective by the Commission; no stop
order suspending the effectiveness of the Registration Statement has been
issued; and no proceeding for that purpose has been initiated or to the
Company's knowledge, threatened by the Commission.
(iii) The Registration Statement and Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to the
requirements of the Trust Indenture Act, and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable effective
date in the case of the Registration Statement and any amendment thereto and as
of the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading,
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provided, however, that this representation and warranty shall not apply to the
Statement of Eligibility of the Trustee on Form T-1 filed as an Exhibit to the
Registration Statement or to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by any
Underwriter expressly for use in the Prospectus as supplemented to relate to the
Securities.
(iv) Any contract, agreement, instrument, lease, or license required
to be described in the Registration Statement or Prospectus has been properly
described therein. Any contract, agreement, instrument, lease, or license
required to be filed as an exhibit to the Registration Statement has been filed
with the Commission as an exhibit to the Registration Statement.
(v) Ernst & Young LLP, the Company's auditors, are independent
public accountants with respect to the Company as required by the Act.
(vi) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries and the financial information with
respect to the subsidiaries of the Company included in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries (including, without limitation, the
reserves for credit losses) as of the dates indicated, and the results of
operations, cash flows and changes in financial position of the Company and its
consolidated subsidiaries for the periods specified. Such financial statements
and schedules have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire period
involved, except to the extent disclosed therein. No other financial statements
are required to be included in the Registration Statement or Prospectus.
(vii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Colorado and is duly
registered as a unitary thrift holding company under the Savings and Loan
Holding Company Act of 1967, supervised by the Office of Thrift Supervision (the
"OTS"). The Company has all requisite corporate power and corporate authority
to own or lease its property and conduct its business as described in the
Registration Statement and the Prospectus and is qualified to do business as a
foreign corporation in each jurisdiction in which the ownership or lease of its
properties, or the conduct of its business, requires such qualification and in
which the failure to be so qualified or in good standing would have a material
adverse effect on the financial condition, affairs, business or prospects of the
Company and the Subsidiaries (defined below) considered as a whole. The Company
does not own or lease property or transact business in any other jurisdiction
where the ownership of such property or the transaction of such business would
require it to qualify as a foreign corporation under the laws of such
jurisdiction.
(viii) The Company has an authorized and outstanding capitalization as
set forth in the Prospectus and the Notes conform in all material respects to
the description thereof contained in the Prospectus. All of the issued and
outstanding shares of capital stock of the
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Company and all of the issued and outstanding shares of capital stock of each
Subsidiary have been duly authorized, validly issued and are fully paid and non-
assessable and, in the case of the Subsidiaries, are owned of record and
beneficially, directly or indirectly, by the Company, and, except as set forth
in the Registration Statement, are free and clear of any liens, claims, security
interests, pledges, charges, encumbrances, shareholders' agreements, and voting
trusts or rights of others.
(ix) The Company has no direct or indirect subsidiaries other than
Matrix Capital Bank, a federal savings bank chartered under the federal laws of
the United States, Sterling Trust Company, a non-bank trust company incorporated
under the laws of the State of Texas, United Financial, Inc., a Colorado
corporation, Matrix Financial Services Corporation, an Arizona corporation,
United Special Services, Inc., a Colorado corporation, United Capital Markets,
Inc., a Colorado corporation, The Vintage Group Inc., a Texas corporation, First
Matrix Investment Services Corp., a Texas corporation, Vintage Delaware
Holdings, Inc., a Delaware corporation, Matrix Aviation Corporation, a Colorado
corporation, Matrix Funding Corporation, a Colorado corporation, and NCNP-1
Corp., a New Mexico corporation (each a "Subsidiary" and collectively, the
"Subsidiaries"). Other than the Subsidiaries, the Company owns no capital stock
or other equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
(x) Each of the Subsidiaries has been duly organized and is validly
existing as a corporation and is in good standing under the laws of its
jurisdiction of incorporation or charter, has all requisite corporate power and
corporate authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and the Prospectus. Each of
the Subsidiaries is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the ownership or lease of its
properties, or the conduct of its business, requires such qualification and in
which the failure to be so qualified or in good standing would have a material
adverse effect on the financial condition, affairs, business or prospects of the
Company and the Subsidiaries considered as a whole. The accounts of Matrix
Capital Bank are insured by the Savings Association Insurance Fund of the
Federal Deposit Insurance Corporation (the "FDIC") up to the maximum applicable
amount in accordance with the rules and regulations of the FDIC, and no
proceedings for the termination or revocation of such membership or insurance
are pending, or, to the knowledge of the Company, threatened.
(xi) Each of the Company and each Subsidiary has all necessary and
material authorizations, approvals, licenses, certificates, permits and orders
(collectively, "Permits") of and from all governmental regulatory officials and
bodies to own its properties and to conduct its business as presently conducted;
except in any case where the failure to possess any such Permit would not have a
material adverse effect on the financial condition, affairs, business or
prospects of the Company and the Subsidiaries considered as a whole.
(xii) The Indenture, which will be substantially in the form filed as
an exhibit to the Registration Statement, has been duly authorized and duly
qualified under the Trust Indenture
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Act and when executed and delivered by the Company and the Trustee, the
Indenture will have been duly authorized, executed and delivered by the Company
and will constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws affecting creditors' rights generally and to general principles of equity;
and the Indenture conforms in all material respects to the description thereof
in the Prospectus.
(xiii) The Notes have been duly authorized and, when executed and
authenticated in accordance with the terms of the Indenture and issued and
delivered in accordance with the terms of this Agreement against payment
therefor, will have been duly authorized, executed, authenticated and delivered
by the Company and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the Company in
accordance with their terms, subject, as to such benefit and enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors' rights generally and to general principles of equity; the Notes
conform in all material respects to the description thereof contained in the
Prospectus and will be substantially in the form filed as an exhibit to the
Registration Statement.
(xiv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated or
contemplated therein, there has not been (A) any material adverse change in the
condition (financial or otherwise), affairs, business or key personnel,
property, prospects, net worth or results of operations of the Company and its
Subsidiaries considered as a whole, whether or not arising in the ordinary
course of business, (B) any material transaction entered into, or any material
liability or obligation incurred, direct or contingent, by the Company or any
Subsidiary, other than in the ordinary course of business, or (C) any material
increase in the short-term debt, other than in the ordinary course of business,
or any material increase in the long-term debt of the Company or any Subsidiary.
(xv) The Company and the Subsidiaries have good and valid title to
all properties and assets described in the Prospectus as owned by them, free and
clear of all liens, charges, encumbrances or restrictions, except such as are
referred to in the Prospectus or are not materially significant in relation to
the financial condition, affairs, business or prospects of the Company and the
Subsidiaries considered as a whole; all of the leases and subleases material to
the business of the Company or under which the Company or any Subsidiary holds
properties described in the Prospectus are in full force and effect; and neither
the Company nor any Subsidiary has any notice of any material claim of any sort
which has been asserted by anyone adverse to the rights of the Company or such
Subsidiary as owner or as lessee or sublessee under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the Company
or the Subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
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(xvi) The execution and delivery by the Company of this Agreement and
the Indenture, the issuance and delivery of the Notes, the consummation of the
transactions contemplated herein and in the Registration Statement and
compliance with the terms of this Agreement have been duly authorized by all
necessary corporate action and will not result in any violation of the Articles
of Incorporation or Bylaws of the Company or any Subsidiary, and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary under any contract, indenture, mortgage, loan agreement, note, lease
or other agreement or instrument to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary, or any of their respective
properties, is bound, or any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their respective properties. No consent of any party to
any contract, indenture, mortgage, loan agreement, note, lease, license or other
agreement or instrument to which the Company or any Subsidiary is a party, or by
which it or any of its respective properties or assets are subject or may be
bound, is required for the execution, delivery or performance of this Agreement,
or the issuance and sale of the Notes, other than such consents which have been
obtained.
(xvii) This Agreement has been duly authorized, executed and delivered
by the Company, and constitutes a valid, legal and binding obligation of the
Company, enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity. The Company has full power and authority to enter into
this Agreement and to authorize, issue and sell the Notes as contemplated by
this Agreement.
(xviii) No consent, approval, authorization or order of, or filing
with any court, governmental authority or agency having jurisdiction over the
Company or any Subsidiary is required in connection with the execution, delivery
and performance of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the Notes in
accordance with the terms of this Agreement and the Indenture, except such as
may be required under the Act, the Securities Exchange Act of 1934, as amended,
the Trust Indenture Act, and state securities or Blue Sky laws.
(xix) Neither the Commission nor the Blue Sky or securities authority
of any jurisdiction has issued a stop order (a "Stop Order") suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
any Preliminary Prospectus, the Prospectus, the Registration Statement, or any
amendment or supplement thereto, refusing to permit the effectiveness of the
Registration Statement, suspending the registration or qualification of the
Notes, nor has any of such authorities instituted or, to the knowledge of the
Company, threatened to institute, any proceedings with respect to a Stop Order.
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(xx) Except as disclosed in the Prospectus, there is no action, suit
or proceeding before or by any court or governmental agency or body, domestic or
foreign, or any arbitrator or arbitration panel, now pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary which might result in any material adverse change in the financial
condition, affairs, business, prospects, net worth or results of operations of
the Company and the Subsidiaries considered as a whole, or which might
materially and adversely affect their properties or assets; and there is no
decree, judgment or order of any kind in existence against or restraining the
Company or any Subsidiary, or any of the officers, employees or directors of
either, from taking any actions of any kind in connection with the business of
the Company or any Subsidiary.
(xxi) The Company is and each of its Subsidiaries is in compliance
with all applicable federal, state and local laws and regulations to which they
are subject or that regulate the business of the Company or its Subsidiaries,
where the effect of the failure to comply would be materially adverse to the
financial condition, affairs, business or prospects of the Company and the
Subsidiaries considered as a whole.
(xxii) The Company and each of its Subsidiaries owns or possesses, or
can acquire on reasonable terms, trademarks, service marks and trade names
necessary to conduct the business now operated by it, and neither the Company
nor any of its Subsidiaries have received any notice of infringement of or
conflict with asserted rights of others with respect to any trademarks, service
marks or trade names which, singly or in the aggregate, if the subject of any
unfavorable decision, ruling or finding, would materially adversely effect the
financial condition, affairs, business or prospects of the Company and the
Subsidiaries considered as a whole.
(xxiii) The Company and each of its Subsidiaries has filed all
necessary federal and state income and franchise tax returns and paid all taxes
shown as due thereon. Except as is otherwise expressly stated in the
Registration Statement, the Company has no knowledge of any tax deficiency which
might be asserted against it which would have a material adverse effect on the
financial condition, affairs, business or prospects of the Company and the
Subsidiaries considered as a whole.
(xxiv) The Company and the Subsidiaries are not and do not intend to
conduct their businesses in a manner which would cause any of them to be an
"investment company" as defined in Section 3(a) of the Investment Company Act of
1940, as amended (the "Investment Company Act").
(xxv) To the best of the Company's knowledge, there are no
affiliations between (i) any of the Company's officers, directors or 5% or
greater security holders, and (ii) any Underwriter or NASD-registered broker or
dealer except as set forth in the Registration Statement or as otherwise
disclosed in writing to the Underwriters.
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(xxvi) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale
of the Notes other than any Preliminary Prospectus or the Prospectus or other
materials permitted by the Act to be distributed by the Company.
(xxvii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxviii) No hazardous substances, hazardous wastes, pollutants or
contaminants have been deposited or disposed of in, on or under the properties
of the Company or any Subsidiary (including properties owned, managed or
controlled by a Subsidiary in connection with its lending operations) during the
period in which the Company or any Subsidiary has owned, occupied, managed,
controlled or operated such properties in material violation of any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit or which
would require remedial action under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit, except for any violation or
remedial action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations or remedial actions, a
material adverse effect on the general affairs, condition (financial, or
otherwise), business, key personnel, property, prospects, net worth or results
of operations of the Company and its Subsidiaries, taken as a whole.
7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon a untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including the information deemed to be
a part of the Registration Statement at the time of effectiveness pursuant to
Rules 430A and 434(d) under the Act, if applicable, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto (including any term sheet
within the meaning of Rule 434 under the Act), or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other out-of-pocket expenses
reasonably incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action; provided, however, that the
Company shall
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not be liable in any such case to the extent that any such loss, claim, damage,
liability or action (i) rises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically for use in
the preparation thereof; or (ii) results from the fact that such Underwriter
failed to send or give a copy of the Prospectus (as amended or supplemented) to
such person at or prior to the confirmation of the sale of such Notes to such
person in any case where such delivery is required by the Act, and arises out of
or is based upon an untrue statement or omission of a material fact contained in
such Preliminary Prospectus that was corrected in the Prospectus (or any
amendment or supplement thereto).
In addition to their other obligations under this Section 7(a), the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 7(a), they will reimburse each Underwriter on a monthly basis for all
reasonable legal fees or other out-of-pocket expenses incurred in connection
with defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the Company's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To the
extent that any such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriter that
received such payment shall promptly return it to the party or parties that made
such payment, together with interest, compounded daily, determined on the basis
of the prime rate (or other commercial lending rate for borrowers of the highest
credit standing) announced from time to time by Norwest Bank Minnesota, National
Association (the "Prime Rate"). Any such interim reimbursement payments which
are not made to an Underwriter within 30 days of a request for reimbursement
shall bear interest a the Prime Rate from the date of such request. This
indemnity agreement shall be in addition to any liabilities which the Company
may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or an amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 under the Act), or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the
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<PAGE>
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically for use in
the preparation thereof, and will reimburse the Company for any legal or other
out-of-pocket expenses reasonably incurred by the Company in connection with
investigating or defending against any such loss, claim, damage, liability or
action.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; provided, however, that the failure so to
notify the indemnifying party shall not relieve the indemnifying party from any
liability that it may have under this Section 7 except to the extent it has been
materially prejudiced by such failure and, provided further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 7. In case
any such action shall be brought against any indemnified party, and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection for
any legal or other out-of-pocket expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that if, in the sole judgment of the
Underwriters, it is advisable for the Underwriters to be represented as a group
by separate counsel, the Underwriters shall have the right to employ a single
counsel to represent themselves, in which event the reasonable fees and expenses
of such separate counsel shall be borne by the indemnifying party or parties and
reimbursed to the Underwriters as incurred (in accordance with the provisions of
the second paragraph in subsection (a) above). An indemnifying party shall not
be obligated under any settlement agreement relating to any action under this
Section 7 to which it has not agreed in writing.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Notes or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on
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the one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and the
parties' relevant intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other out-of-pocket expenses reasonably incurred
by such indemnified party in connection with investigating or defending against
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 7 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The several obligations
-------------------------------------------
of the Underwriters to purchase the Notes hereunder are subject to the following
conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., Eastern time, on the date hereof, or at such later date and time
as shall be consented to in writing by the Underwriters, and, if the
Underwriters and the Company have elected to rely upon Rule 430A under the Act,
the price of the Notes and any price-related or other information
17
<PAGE>
previously omitted from the Registration Statement pursuant to such Rule 430A
under the Act shall have been transmitted to the Commission for filing pursuant
to Rule 424 (b) within the prescribed time period, and on or prior to the
Closing Date, the Company shall have provided evidence satisfactory to the
Underwriters of such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in accordance
with the requirements of Rule 430A.
(b) Subsequent to the effective date of the Registration Statement,
(i) there shall not have occurred any change, or any material development
involving a prospective change, in or affecting particularly the business or
properties of the Company and the Subsidiaries, taken as a whole, not
contemplated by the Prospectus, which, in the Underwriters' opinion would
materially adversely affect the market for the Notes or make it impracticable or
inadvisable to proceed with the offering or the delivery of the Notes, as
contemplated herein and in the Prospectus, or to attempt to enforce contracts
for the purchase of the Notes, and (ii) the business and operations of the
Company and the Subsidiaries shall not have been materially interfered with by
strike, fire, flood, accident or other calamity (whether or not insured).
(c) The Underwriters shall have received from Jenkens & Gilchrist, a
Professional Corporation, counsel for the Company, a favorable opinion dated the
Closing Date and satisfactory to the Underwriters and the Underwriters' counsel
to the effect that:
(i) Each of the Company and each of the Subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation; each has all requisite corporate
power and corporate authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus, and each is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which it owns or leases real
property or in which the conduct of its business makes such qualification
necessary and in which the failure to so qualify would have a material adverse
effect upon the business, condition (financial or otherwise) or properties of
the Company and its Subsidiaries, taken as a whole.
(ii) The Company has an authorized capitalization as set forth in the
Prospectus.
(iii) To such counsel's knowledge, except as otherwise described in
the Registration Statement and Prospectus and except for directors' qualifying
shares, the Company, directly or indirectly, owns of record and beneficially,
free and clear of any security interests, claims, liens, proxies, equities or
other encumbrances, all of the issued and outstanding shares of the
Subsidiaries. To such counsel's knowledge, except as described in the
Registration Statement and Prospectus, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or acquire
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<PAGE>
from the Company or any Subsidiary any shares of the capital stock of the
Company or any Subsidiary.
(iv) The Notes have been duly and validly authorized, executed and
delivered by the Company and when delivered and paid for pursuant hereto will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture, enforceable against the Company in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equitable principles.
(v) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equitable principles.
(vi) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws of the
United States for the issuance, sale and delivery of the Notes by the Company to
you have been obtained or made.
(vi The Registration Statement has become effective under the Act,
and, to the such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued, nor has any proceeding for the
issuance of such an order been initiated or, to such counsel's knowledge,
threatened.
(vii) To the best of such counsel's knowledge, there is no pending or
threatened litigation which would prevent the consummation of the transactions
contemplated by this Agreement or the Indenture.
(ix) The descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings, contracts and other documents are
accurate summaries and fairly present in all material respects the information
required to be shown; and, to the best of such counsel's knowledge, there are no
statutes or legal or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any contracts or documents
of a character required to be described in the Registration Statement or
Prospectus or included as exhibits to the Registration Statement that are not
described or included as required.
(x) Neither the Company nor any of the Subsidiaries are an
"investment company" or a person "controlled by" an "investment company" within
the meaning of the Investment Company Act.
(xi) The Company has the requisite corporate power and authority to
enter into this Agreement and the Indenture and to issue the Notes, and to
effect the transactions contemplated
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<PAGE>
by this Agreement and the Indenture. This Agreement has been duly authorized,
executed and delivered by the Company. The execution, delivery and performance
of this Agreement and the Indenture and the consummation of the transactions
herein or therein contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, (A) any statute,
rule or regulation of the United States, or any rule or regulation of any
banking regulator, or (B) any agreement or instrument known to such counsel to
which the Company is a party or by which either is bound or to which any of
their property is subject which agreement or instrument is material to the
Company and its Subsidiaries, taken as a whole, or (C) the charter or bylaws of
the Company or any Subsidiary, or (D) any order or decree known to such counsel
of any court, governmental agency or body or banking regulator having
jurisdiction over the Company, any Subsidiary or any of its respective
properties, except for any breach, violation or default which would not have a
material adverse effect on the Company and its Subsidiaries, taken as a whole,
or the ability of the Company to perform its obligations hereunder; and no
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement or the Indenture or for the consummation of the
transactions contemplated hereby or thereby, including the issuance or sale of
the Notes by the Company except (a) such as may be required under the Act, which
has been obtained, or under state securities or blue sky laws, and (b) the
qualification of the Indenture under the Trust Indenture Act and the rules and
regulations thereunder.
(xii) The Registration Statement and the Prospectus, and any amendment
thereof or supplement thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), comply as to form in all material
respects with the requirements of the Act and the Rules and Regulations.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Texas and federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that such opinion or opinions of local counsel
are satisfactory to them and that they believe they and the Underwriter are
justified in relying thereon and (ii) as to matters of fact, to the extent such
counsel deems reasonable upon certificates of officers of the Company and its
subsidiaries and of public officials provided that the extent of such reliance
is specified in such opinion. With respect to the opinion set forth in
subparagraph (xi) above as to enforceability, such counsel may assume that the
laws of the State of Minnesota and the State of New York are identical to the
laws of the State of Texas. In addition, such counsel shall state that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriters at which the contents of the Registration Statement and the
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Prospectus and related matters were discussed, and, although such counsel is not
passing upon and does not assume any responsibility for and has not verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, and has not made any independent
check or verification thereof, on the basis of the foregoing (relying as to
materiality to a large extent upon facts provided by officers and other
representatives of the Company), no facts have come to the attention of such
counsel that lead such counsel to believe that either the Registration Statement
at the time it became effective (including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to Rule
430A(b), if applicable, and including any Registration Statement filed pursuant
to Rule 462(b)), or any amendment thereof made prior to the Closing Date as of
the date of such amendment, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus as of its date
(or any amendment thereof or supplement thereto made prior to the Closing Date
as of the date of such amendment or supplement) and as of the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief or opinion with respect to the exhibits and the financial statements and
other financial and statistical data included therein).
In rendering such opinions, such counsel may rely as to matters of
fact, to the extent they deem proper on certificates of responsible officers of
the Company and the Subsidiaries and on certificates of public officials.
(d) The Underwriters shall have received on the Closing Date a
favorable opinion dated the Closing Date from Manatt, Phelps & Phillips, LLP,
counsel for the Underwriters, as to such matters as the Underwriters may
reasonably require.
(e) The Underwriters shall have received letters addressed to the
Underwriters and dated the date hereof and the Closing Date, as the case may be,
from Ernst & Young LLP, independent public accountants for the Company,
substantially in the forms heretofore approved by the Underwriters and counsel
for the Underwriters.
(f) That (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any material increase in the short-term, except in the ordinary
course of business, or long-term debt of the Company and its Subsidiaries taken
as a whole from that set forth or contemplated in the Registration Statement and
Prospectus; (iii) the Company and its Subsidiaries shall not have incurred any
material liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), other than those reflected in or contemplated by
the Registration Statement and Prospectus; and (iv) all of the representations
and warranties of the Company contained in this Agreement shall be true and
correct in all material respects on and as of the date hereof and
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on and as of the Closing Date as if made on and as of each such date, and the
Underwriters shall have received a certificate, dated the Closing Date and in
form and substance reasonably satisfactory to the Underwriters signed by the
President or a Vice President and the Chief Financial Officer of the Company (or
such other officers as are acceptable to the Underwriters) to the effect set
forth in this Section 8(f) and in Section 8(h) hereof.
(g) The Notes shall have been qualified for sale or exempted from
such qualification under the securities laws of such jurisdictions as the
Underwriters shall have designated prior to the time of execution of this
Agreement and such qualification or exemption shall continue in effect to and
including the Closing Date.
(h) The Company shall not have failed at or prior to the Closing
Date to have performed or complied in all material respects with any of the
agreements herein contained and required to be performed or complied with by it
at or prior to the Closing Date.
9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
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representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Company and
the Underwriters contained in Section 7 hereof shall remain operative and in
full force and effect regardless of any investigation made by the Underwriters
or on the Underwriters' behalf or any controlling person thereof, or the Company
or any of its officers, directors, or controlling persons and shall survive
delivery of, and payment for, the Notes to and by the Underwriters hereunder.
10. EFFECTIVE DATE OF AGREEMENT.
---------------------------
(a) If the Registration Statement has not yet been declared
effective, this Agreement shall become effective contemporaneously with the
effectiveness of the Registration Statement. Until such time as this Agreement
shall have become effective, it may be terminated by the Company by notifying
the Underwriters, or by the Underwriters by notifying the Company.
(b) If any Underwriter shall fail or refuse to purchase Notes which
it has agreed to purchase under this Agreement and the aggregate principal
amount of Notes which such defaulting Underwriter agreed but failed or refused
to purchase is not more than one-tenth of the aggregate principal amount of
Notes, the other Underwriters shall be obligated, pro rata to purchase the Notes
which the defaulting Underwriter agreed but failed or refused to purchase. If
any Underwriter shall fail or refuse to purchase Notes and the aggregate
principal amount of Notes with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Notes and arrangements
satisfactory to the non-defaulting Underwriters and the Company for the purchase
of such Notes are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of the non-defaulting Underwriters
or the Company. In any such case which does not result in termination of this
Agreement, either the non-defaulting Underwriters or the Company shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the
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Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of its default under this
Agreement.
(c) Any notice under this Section 10 may be made by telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. The Underwriters shall have the right to
------------------------
terminate this Agreement at any time prior to the Closing Date by notice to the
Company from the Underwriters, without liability on the Underwriters' part to
the Company if, on or prior to such date, (i) the Company shall have failed,
refused or been unable to perform in any material respect any agreement on its
part to be performed hereunder, (ii) any other condition to the obligations of
the Underwriters hereunder as provided in Section 8 is not fulfilled when and as
required in any material respect, (iii) trading in securities generally on the
New York Stock Exchange, the American Stock Exchange or the NASD Automated
Quotation System shall have been suspended or materially limited, or minimum
prices shall have been established on such exchange or system by the Commission,
or by such exchange or system or other regulatory body or governmental authority
having jurisdiction, (iv) a general banking moratorium shall have been declared
by Federal, Colorado or New York State authorities, (v) there is an outbreak or
material escalation of armed hostilities involving the United States on or after
the date hereof, or there has been a declaration by the United States of a
national emergency or war, the effect of which shall be, in the Underwriters'
reasonable judgment, to make it inadvisable or impracticable to proceed with the
public offering or delivery of the Notes on the terms and in the manner
contemplated in the Prospectus as supplemented or amended prior to the
occurrence of such event, (vi) in the Underwriters' reasonable opinion any
material adverse change shall have occurred since the respective dates as of
which information is given in the Registration Statement or the Prospectus (as
supplemented or amended prior to the occurrence of such event) in the condition
(financial or other) of the Company or the Subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business other than as set
forth in the Prospectus as supplemented or amended prior to the occurrence of
such event, or (vii) there shall have been such a material adverse change in
general economic, political or financial conditions or if the effect of
international conditions on the financial markets in the United States shall be
such as, in the Underwriters' reasonable opinion, makes it inadvisable or
impracticable to proceed with the delivery of the Notes as contemplated hereby.
Notice of such cancellation shall be given to the Company by telecopy or
telephone but shall be subsequently confirmed by letter.
12. INFORMATION FURNISHED BY UNDERWRITER. The statements set forth in the
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last paragraph of the cover page, the third sentence in the paragraph under the
caption "Risk Factors -- Absence of Public Market for the Notes", in the caption
"Underwriting" in any Preliminary Prospectus and in the Prospectus constitute
the written information furnished by the Underwriter or on its behalf referred
to in Section 2 and Section 6 hereof.
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13. MISCELLANEOUS. Except as otherwise provided in Sections 10 and 11
-------------
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of the
Company at 1380 Lawrence Street, Suite 1410, Denver, Colorado 80204, Attention:
Chief Financial Officer, with a copy to Ronald J. Frappier, Esq., Jenkens &
Gilchrist, a Professional Corporation, 1455 Ross Avenue, Suite 3200, Dallas,
Texas 75202, or (ii) if to the Underwriters, at the offices of Piper Jaffray
Inc., Piper Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota
55402, Attention: Corporate Finance Department, with a copy to Gordon M. Bava,
P.C., Manatt, Phelps & Phillips, LLP, 11355 West Olympic Boulevard, Los Angeles,
California 90064, or in any case to such other address as the person to be
notified may have requested in writing.
14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
----------------------------------------
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 7. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Notes from the
Underwriters.
15. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Minnesota.
16. COUNTERPARTS. This Agreement may be signed in various counterparts
which together shall constitute one and the same instrument.
24
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Underwriters.
Very truly yours,
MATRIX CAPITAL CORPORATION
By:
----------------------------------
Name:
Title:
Accepted and delivered as of
the date first written above
PIPER JAFFRAY INC.
KEEFE, BRUYETTE & WOODS, INC.
By: PIPER JAFFRAY INC.
By:
-------------------------------
Name:
Managing Director
25
<PAGE>
MATRIX CAPITAL CORPORATION
SCHEDULE I
----------
UNDERWRITERS
PRINCIPAL
AMOUNT OF
NAME NOTES
----
Piper Jaffray, Inc. ................ $
Keefe, Bruyette & Woods, Inc. ...... $
TOTAL .............................. $20,000,000
===========
26
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EXHIBIT 4.1
================================================================================
MATRIX CAPITAL CORPORATION
$20,000,000
___% Senior Notes Due 2004
_____________________________________
INDENTURE
Dated as of _________, 1997
_____________________________________
_____________________________________
FIRST TRUST NATIONAL ASSOCIATION
_____________________________________
TRUSTEE
================================================================================
<PAGE>
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310 (a)(1)............................................... 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N/A
(a)(4)............................................... N/A
(a)(5)............................................... 7.10
(b).................................................. 7.10
(c).................................................. N/A
311 (a).................................................. 7.11
(b).................................................. 7.11
(c).................................................. N/A
312 (a).................................................. 2.05
(b).................................................. 11.03
(c).................................................. 11.03
313 (a).................................................. 7.06
(b)(1)............................................... 10.03
(b)(2)............................................... 7.07
(c).................................................. 7.06, 11.02
(d).................................................. 7.06
314 (a).................................................. 4.03, 11.02
(b).................................................. 10.02
(c)(1)............................................... 11.04
(c)(2)............................................... 11.04
(c)(3)............................................... N/A
(d).................................................. 10.03, 10.04, 10.05
(e).................................................. 11.05
(f).................................................. N/A
315 (a).................................................. 7.01
(b).................................................. 7.05, 11.02
(c).................................................. 7.01
(d).................................................. 7.01
(e).................................................. 6.11
316 (a) (last sentence).................................. 2.09
(a)(1)(A)............................................ 6.05
(a)(1)(B)............................................ 6.04
(a)(2)............................................... N/A
(b).................................................. 6.07
(c).................................................. 2.12
i
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317 (a)(1)............................................................. 6.08
(a)(2)............................................................. 6.09
(b)................................................................ 2.04
318 (a)................................................................ 11.01
(b)................................................................ N/A
(c)................................................................ 11.01
(N/A means not applicable.)
* This Cross-Reference Table is not part of the Indenture.
ii
<PAGE>
TABLE OF CONTENTS
PAGE #
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE............................ 1
Section 1.1 -- Definitions........................................... 1
Section 1.2 -- Other Definitions..................................... 13
Section 1.3 -- Incorporation by Reference of Trust Indenture Act..... 13
Section 1.4 -- Rules of Construction................................. 14
ARTICLE 2
THE NOTES............................................................. 14
Section 2.1 -- Form and Dating....................................... 14
Section 2.2 -- Form of Legend for Global Notes....................... 14
Section 2.3 -- Notes in Global Form.................................. 15
Section 2.5 -- Registrar and Paying Agent............................ 15
Section 2.6 -- Paying Agent to Hold Money in Trust................... 16
Section 2.7 -- Holder Lists.......................................... 16
Section 2.8 -- Transfer and Exchange................................. 16
Section 2.9 -- Replacement Notes..................................... 17
Section 2.10 -- Outstanding Notes..................................... 18
Section 2.11 -- Treasury Notes........................................ 18
Section 2.12 -- Temporary Notes....................................... 18
Section 2.13 -- Cancellation.......................................... 18
Section 2.14 -- Defaulted Interest.................................... 19
Section 2.15 -- CUSIP Number.......................................... 19
ARTICLE 3
REDEMPTION............................................................ 19
Section 3.1 -- Notices to Trustee.................................... 19
Section 3.2 -- Selection of Notes to Be Redeemed..................... 19
Section 3.3 -- Notice of Redemption.................................. 20
Section 3.4 -- Effect of Notice of Redemption........................ 20
Section 3.5 -- Deposit of Redemption Price........................... 21
Section 3.6 -- Notes Redeemed in Part................................ 21
Section 3.7 -- Optional Redemption................................... 21
Section 3.8 -- No Mandatory Redemption............................... 21
Section 3.9 -- Offer to Redeem by Application of Excess Proceeds..... 22
ARTICLE 4
COVENANTS............................................................. 23
Section 4.1 -- Payment of Notes...................................... 23
Section 4.2 -- Maintenance of Office or Agency....................... 23
Section 4.3 -- Reports............................................... 24
Section 4.4 -- Compliance Certificate................................ 24
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Section 4.5 -- Taxes................................................. 25
Section 4.6 -- Stay, Extension and Usury Laws........................ 25
Section 4.7 -- Restricted Payments................................... 25
Section 4.8 -- Dividend and Other Payment Restrictions
Affecting Subsidiaries............................... 27
Section 4.9 -- Incurrence of Indebtedness and Issuance of
Preferred Stock...................................... 28
Section 4.10 -- Asset Sales........................................... 30
Section 4.11 -- Transactions with Affiliates.......................... 31
Section 4.12 -- Liens................................................. 32
Section 4.13 -- Business Activities................................... 32
Section 4.14 -- Payments for Consent.................................. 32
Section 4.15 -- Corporate Existence................................... 32
Section 4.16 -- Offer to Repurchase Upon Change of Control............ 33
Section 4.17 -- Maintenance of Regulatory Capital Require............. 33
Section 4.18 -- Maintenance of Minimum Consolidated Tangible
Equity Capital....................................... 33
Section 4.20 -- Restrictions on Other Dealings With Trustee........... 34
ARTICLE 5
SUCCESSORS............................................................ 34
Section 5.1 -- Merger, Consolidation or Sale of Assets............... 34
Section 5.2 -- Successor Corporation Substituted..................... 34
ARTICLE 6
DEFAULTS AND REMEDIES................................................. 35
Section 6.1 -- Events of Default..................................... 35
Section 6.2 -- Acceleration.......................................... 36
Section 6.3 -- Other Remedies........................................ 37
Section 6.4 -- Waiver of Past Defaults............................... 37
Section 6.5 -- Control by Majority................................... 37
Section 6.6 -- Limitation on Suits................................... 38
Section 6.7 -- Rights of Holders to Receive Payment.................. 38
Section 6.8 -- Collection Suit by Trustee............................ 38
Section 6.9 -- Trustee May File Proofs of Claim...................... 38
Section 6.10 -- Priorities............................................ 39
Section 6.11 -- Undertaking for Costs................................. 39
ARTICLE 7
TRUSTEE............................................................... 39
Section 7.1 -- Duties of Trustee..................................... 39
Section 7.2 -- Rights of Trustee..................................... 40
Section 7.3 -- Individual Rights of Trustee.......................... 41
Section 7.4 -- Trustee's Disclaimer.................................. 41
Section 7.5 -- Notice of Defaults.................................... 41
Section 7.6 -- Reports by Trustee to Holders......................... 41
Section 7.7 -- Compensation and Indemnity............................ 42
Section 7.8 -- Replacement of Trustee................................ 43
iv
<PAGE>
Section 7.9 -- Successor Trustee by Merger, Etc...................... 44
Section 7.10 -- Eligibility; Disqualification......................... 44
Section 7.11 -- Preferential Collection of Claims Against Company..... 44
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE............................... 44
Section 8.1 -- Option to Effect Legal Defeasance or Covenant
Defeasance........................................... 44
Section 8.2 -- Legal Defeasance and Discharge........................ 44
Section 8.3 -- Covenant Defeasance................................... 45
Section 8.4 -- Conditions to Legal or Covenant Defeasance............ 45
Section 8.5 -- Deposited Money and Government Securities to Be
Held in Trust; Other Miscellaneous Provisions........ 46
Section 8.6 -- Repayment to the Company.............................. 47
Section 8.7 -- Reinstatement......................................... 47
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER....................................... 47
Section 9.1 -- Without Consent of Holders of Notes................... 47
Section 9.2 -- With Consent of Holders of Notes...................... 48
Section 9.3 -- Compliance with Trust Indenture Act................... 49
Section 9.4 -- Revocation and Effect of Consents..................... 49
Section 9.5 -- Notation On or Exchange of Notes...................... 50
Section 9.6 -- Trustee to Sign Amendments, Etc....................... 50
ARTICLE 10
MISCELLANEOUS.......................................................... 50
Section 10.1 -- Trust Indenture Act Controls.......................... 50
Section 10.2 -- Notices............................................... 50
Section 10.3 -- Communication by Holders with Other Holders........... 51
Section 10.4 -- Certificate and Opinion as to Conditions Precedent.... 51
Section 10.5 -- Statements Required in Certificate or Opinion......... 52
Section 10.6 -- Rules by Trustee and Agents........................... 52
Section 10.7 -- No Personal Liability of Directors, Officers,
Employers and Stockholders........................... 52
Section 10.8 -- Governing Law......................................... 52
Section 10.9 -- No Adverse Interpretation of Other Agreements......... 52
Section 10.10 -- Successors and Assigns................................ 53
Section 10.11 -- Severability.......................................... 53
Section 10.12 -- Legal Holidays........................................ 53
Section 10.13 -- Counterpart Originals................................. 53
Section 10.14 -- Table of Contents, Headings, Etc...................... 53
EXHIBITS
Exhibit A -- Form of Note
Exhibit B -- Form of Certificate of Transfer
Exhibit C -- Form of Certificate of Exchange
v
<PAGE>
INDENTURE dated as of _________, 1997 between Matrix Capital Corporation, a
Colorado corporation (the "Company"), as issuer, and
First Trust National Association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the Company's _____%
Senior Notes due 2004 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 -- DEFINITIONS.
"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.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, that, for
purposes of Section 4.11, beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or coregistrar.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets (including, without limitation, by way of a sale and leaseback and
the sale or other disposition of any Residual Receivables) other than sales of
Receivables (including by means of Securitizations), Servicing Rights or
Warehouse Facilities and sales of foreclosed assets, in each case 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 or of the Subsidiary Bank will be
governed by the provisions of Section 4.16 hereof and/or the provisions of
Article V and not by the provisions of Section 4.10), and (ii) the issuance 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, in
each case, 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
$2.5 million or (b) for net proceeds in excess of $2.5 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 to the
Company or to another Wholly-Owned Restricted Subsidiary; (ii) a Restricted
Payment that is permitted by Section 4.7; (iii) a disposition by a Restricted
Subsidiary to the Company or a Wholly-Owned Restricted Subsidiary or by the
Company to a Wholly-Owned Restricted Subsidiary of the Company; and (iv) any
sale or other disposition of all or any portion of the residential real estate
project located in the City of Ft. Lupton, Colorado.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any authorized committee thereof.
1
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"Business Day" means any day other than a Legal Holiday.
"capital lease" means, at the time any determination thereof is to be made,
any lease of property, real or personal, in respect of which the present value
of the minimum rental commitment would be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"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 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.
"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 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.
"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 financing arrangements otherwise permitted by
this Indenture entered into in the ordinary course of business), 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, or of Subsidiary Bank,
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 or of Subsidiary Bank, (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 or of
Subsidiary Bank (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 or Subsidiary
Bank consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company or Subsidiary Bank, in
any such event pursuant to a transaction in which any of the outstanding Voting
Stock of the Company or of Subsidiary Bank is converted into or exchanged for
cash, securities or other property, other than any such transaction where the
Voting Stock of the Company or of Subsidiary Bank 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 in the
case of the Company a majority of the outstanding shares, and in the case of
Subsidiary Bank 80% or more of the
2
<PAGE>
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,
and (B) Hedging Obligations permitted to be incurred pursuant to Section
4.9(b)(vii) 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 excluding in the case of Subsidiary Bank prior notification
requirements to applicable regulatory authorities) 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, (iii) the Net Income of any Person
acquired in a 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.
"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 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 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.
"Consolidated Tangible Equity Capital" means, with respect to any Person as
of any date, Consolidated Net Worth minus Goodwill (as such term is defined
according to GAAP).
"Continuing Director" 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 Directors
constituting Continuing Directors who were members of such Board at the time of
such nomination or election.
3
<PAGE>
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.2 or such other address as the Trustee may give
notice to the Company.
"Credit Enhancement Agreements" means, collectively, any documents,
instruments or agreements entered into by the Company or, any of its Restricted
Subsidiaries, with any Person exclusively for the purpose of providing credit
support for asset-backed securities issued in connection with Securitizations.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Depositary" means a clearing agency registered under the Exchange Act this
is designated to act as Depositary for the Notes as contemplated by Section 2.1
until a successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean such
successor Depositary.
"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.
"Eligible Receivables" means, at the time of determination, Receivables
meeting 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 Receivables which are eligible for sale in a
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 in a 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.
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between an informed and willing seller and an informed and willing and able
buyer, neither of whom is under undue pressure or compulsion to complete the
transaction.
"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 Note" means a Note that evidences all or part of the Notes and is
authenticated and delivered to, and registered in the name of, the Depository
for such Notes or a nominee thereof.
4
<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. Notwithstanding the foregoing, the term "Guarantee" does not
include obligations pursuant to representations, warranties, covenants and
indemnities in connection with a Securitization or Warehouse Facility or other
financing arrangement permitted by this Indenture entered into in the ordinary
course.
"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.
"Holder" means a person in whose name a Note is registered.
"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 unpaid deferred balance 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 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 Disqualified Stock; 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: (a) obligations pursuant to representations, warranties, covenants and
indemnities in connection with a Securitization or Warehouse Facility or other
financing arrangement permitted by this Indenture entered into in the ordinary
course, (b) any deposits with Subsidiary Bank or Subsidiary Trust Company or
funds collected by either of them, (c) any banker's acceptance or letter of
credit issued by Subsidiary Bank, (d) any check, note, certificate of deposit,
money order, traveler's check, draft or bill of exchange issued, accepted or
endorsed by Subsidiary Bank or Subsidiary Trust Company, (e) any discount with,
borrowing from, or other obligation to any Federal Reserve Bank, the Federal
Deposit Insurance Corporation or any Federal Home Loan Bank (or successor
organization) which discount or borrowing is in the ordinary course of
Subsidiary Bank's banking business and not incurred in connection with any
unusual or extraordinary "rescue loan" or substantially similar investment by
such Federal Reserve Bank, the Federal Deposit Insurance Corporation or the
Federal Home Loan Bank (or successor organization), (f) any agreement, made by
Subsidiary Bank in the ordinary course of its banking business, to purchase or
repurchase securities, loans or federal funds, or to participate in any such
purchase or repurchase, (g) any transaction made by Subsidiary Bank in the
ordinary course of Subsidiary Bank's banking business in the nature of any
extension of credit, whether in the form of a commitment, guarantee or
otherwise, undertaken by it for the account of a third party with the
application by Subsidiary Bank of the same
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banking considerations and legal lending limits that would be applicable if the
transaction were a loan to such party, (h) any transaction in which Subsidiary
Bank or Subsidiary Trust Company in the ordinary course of its banking, mortgage
banking or trust business to its customers solely in their capacities as such,
(j) any other liability or obligation of Subsidiary Bank or Subsidiary Trust
Company incurred in the ordinary course of its banking or trust business not
involving any obligation for borrowed money.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"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 Cash Equivalents, 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 Equity Interests or other securities by the
Company for consideration consisting of common equity securities of the Company
(other than Disqualified Stock) shall not be deemed to be an Investment.
"Issue Date" means ___________, 1997.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized 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.
"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).
"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 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
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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.
"Note" or "Notes" means the Notes described above issued under this
Indenture.
"Obligations" means any principal, interest, penalties, fees and other
liabilities payable under the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice
President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 10.5
hereof.
"Opinion of Counsel" means an opinion from legal counsel who is acceptable
to the Trustee. The counsel may be an employee of or counsel to the Company or
the Trustee. See Sections 10.4 and 10.5 hereof.
"Permitted Businesses" means (i) any financial service business engaged in
by the Company or any Subsidiary as of the Issue Date and thereafter (excluding
the underwriting of securities, and (ii) any activity related to the residential
real estate development project located in the City of Ft. Lupton, Colorado as
required to complete such project.
"Permitted Investment" means (a) any Investment in the Company or in a
Restricted Subsidiary; (b) any Investment in Subsidiary Bank; (c) any Investment
in or related to the residential real estate development project located in the
City of Ft. Lupton, Colorado as required to complete such project and any
Refinancing of any related Indebtedness related to such project; (d) any
Investment in Cash Equivalents; (e) any Investment by the Company or any
Restricted Subsidiary in a Person if, as a result of such Investment, (i) such
Person becomes a Wholly-Owned Restricted Subsidiary 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 that is
engaged in a Permitted Business; (f) 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 the covenant described above under Section
4.10 hereof; (g) any Investment in Receivables, Residual Receivables or
Servicing Rights made in the ordinary course of business; (h) any Investment in
other assets which are to be used in a Permitted Business in the ordinary course
of such business; and (i) 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 as of any date in the aggregate an amount equal to 10% of
Consolidated Tangible Equity Capital as of such date.
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"Permitted Liens" means (i) Liens on Receivables, Servicing Rights or other
assets (other than Residual Receivables) securing Warehouse Debt or Hedging
Obligations (or Guarantees of Warehouse Debt or Hedging Obligations); (ii) Liens
related to purchase money obligations incurred for the purpose of financing a
Permitted Investment; (iii) Liens on Servicing Rights, Residual Receivables and
on the Capital Stock of Restricted Subsidiaries of the Company substantially all
of the assets of which are Residual Receivables; provided, however, that, (x)
all Retained Residual Receivables shall remain unencumbered by any Lien unless
after giving effect to such sale, conveyance or other disposition the aggregate
amount of Senior Residual Receivables of the Company and its Restricted
Subsidiaries which are unencumbered by any Lien (of which no more than 25% of
the aggregate book value thereof shall constitute Retained Residual Receivables)
would be greater than or equal to 250% of all Senior Indebtedness of the Company
and its Restricted Subsidiaries, and (y) after giving effect to the incurrence
of such Lien the aggregate amount of Senior Residual Receivables of the Company
and its Restricted Subsidiaries which are unencumbered by any Lien (of which not
more than 25% of the aggregate book value thereof shall constitute Retained
Residual Receivables) would be greater than or equal to 150% of all Senior
Indebtedness of the Company and its Restricted Subsidiaries; (iv) Liens in favor
of the Company or any Restricted Subsidiary; (v) 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; (vi) 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; (vii) 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; (viii)
Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
Section 4.9(b)(i) hereof covering only the assets acquired with such
Indebtedness; (ix) Liens existing on the Issue Date; (x) 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; (xi) Liens (including, without
limitation, Liens on Residual Receivables) in favor of a monoline insurance
company or other provider of credit enhancement pursuant to a Credit Enhancement
Agreement; (xii) 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 $350,000 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; (xiii) 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; (xiv) survey exceptions, easements and other restrictions on the use of
property; (xv) Liens securing Indebtedness the proceeds of which were utilized
by the Company or a Restricted Subsidiary solely to fund any advances to
Securitization Trusts permitted by clause (v) of the second paragraph of Section
4.7 hereof, provided that such Liens encumber no assets other than the
contractual right of the Company or such Restricted Subsidiary, as the case may
be, to be reimbursed in respect of any advances funded by such Indebtedness;
(xvi) Liens securing deposits or repurchase agreements of Subsidiary Bank;
(xvii) Liens on assets of Unrestricted Subsidiaries of the Company that secure
Non-Recourse Debt of Unrestricted Subsidiaries of the Company; and (xviii) Liens
to secure any Refinancing (or successive Refinancings), in whole or in part, of
any Indebtedness (or commitment for Indebtedness) existing on the Issue Date;
provided, however, that (x) any such new Lien shall be a Lien on the same asset
class or interest securing the original Lien and (y) the Indebtedness secured by
such Lien is not, solely
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by virtue of the Refinancing (unless otherwise permitted by this Indenture),
increased to an amount greater than the greater of (A) the outstanding principal
amount of the Indebtedness existing on the Issue Date secured by such Lien, or
(B) if such Lien secures Indebtedness under a line of credit, the commitment
amount of such line of credit existing on the Issue Date. Any determination of
Senior Residual 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 Lien for which such determination is being made and to any other
sale of or Lien on or reduction of Residual Receivable since the date of such
balance sheet.
"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 (other than Indebtedness incurred pursuant to
Sections 4.9(b)(ii), (iii), (vii), (ix), (x) and (xi)); 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
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 the 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 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
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 and (iii) in the case of Warehouse Debt that is not secured by a
Lien on Eligible Receivables or Servicing Rights any such Indebtedness incurred
under such Warehouse Facility has not been outstanding in excess of 364 days.
"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.
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"principal" of a debt security means the principal of the security plus the
premium, if any, on the security.
"Purchase Facility" means any Warehouse Facility in the form of a purchase
and sale facility pursuant to which the Company or a Restricted Subsidiary sells
Receivables to a financial institution, commercial paper facility or conduit 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.
"Receivables" means residential mortgage, consumer and commercial mortgage
loans, leases and receivables purchased or originated by the Company or any
Restricted Subsidiary; provided, however, that for purposes of determining the
amount of a Receivable at any time, such amount shall be determined in
accordance with GAAP, consistently applied, as of the most recent practicable
date.
"Refinance" means, in respect of any Indebtedness, to extend, refinance,
renew, replace, defease, refund, repay, prepay, redeem, or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Regular Record Date" for the interest payable on any Interest Payment Date
means, for so long as all of the Notes are evidenced by a Global Note, the
business day next preceding such Interest Payment Date, and if any Notes are in
definitive registered form, the ______________ (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date.
"Residual Receivables" of the Company means at any time, the capitalized
asset value of Excess Spread of the Company and its Restricted Subsidiaries
(including, without limitation, subordinated, interest-only and residual
certificates of a Securitization Trust), with respect to any Receivable pool of
any Securitization Trust, calculated in accordance with GAAP.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration 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.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any Subsidiary other than an Unrestricted
Subsidiary.
"Retained Residual Receivables" has the meaning specified in Section 4.10.
"SEC" means the Securities and Exchange Commission.
"Securitization" means a public or private transfer of Receivables in the
ordinary course of business and by which the Company or a Restricted Subsidiary
directly or indirectly securitizes a pool of specialized Receivables, including
any such transaction involving the sale of specialized Receivables to a
Securitization Trust.
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"Securitization Trust" means any Person that is not a Restricted Subsidiary
established exclusively for the purpose of issuing securities in connection with
any Securitization, the obligations of which are without recourse to the Company
or any of its Subsidiaries (other than obligations constituting Indebtedness
incurred in accordance with Section 4.9(a) hereof).
"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, including the Permitted Senior Indebtedness, but excluding
Permitted Warehouse Debt and Hedging Obligations permitted to be incurred under
this Indenture and, in the case of Indebtedness secured by Senior Residual
Receivables, the lesser of (x) the amount of such Indebtedness and (y) the
amount of the Senior Residual Receivables securing such Indebtedness.
"Senior Residual Receivables" means Residual Receivables which have not
been created as the result of or in connection with the sale, securitization or
other disposition of other Residual Receivables.
"Servicing Rights" means the contractual right to receive a fee for
processing and administering loan payments with respect to Receivables or loans,
leases or receivables originated by third parties or any interest in such right.
"Significant Subsidiary" means any subsidiary that would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the Securities Act
of 1933, as amended and the Securities Exchange Act of 1934, as amended.
"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).
"Subsidiary Bank" means Matrix Capital Bank, or its successor bank, and any
additional federally insured depository institution that may be acquired by the
Company in the future.
"Subsidiary Trust Company" means Sterling Trust Company, or successor trust
company, and any additional nondepository trust company that may be acquired by
the Company in the future.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA, except as provided in Section 9.1 hereof.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Trust Officer" means the Chairman of the Board, the President, any Vice
President or any other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
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"Unrestricted Subsidiary" means any Subsidiary, other than Subsidiary Bank
and Matrix Financial, 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 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 obligation (other than obligations
constituting Indebtedness incurred in accordance with Section 4.9 hereof) (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; and (c) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness 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 Section 4.7 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 the covenant in Section 4.9 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,
other than Subsidiary Bank and Matrix Financial; 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 4.9 hereof
and (ii) no Default or Event of Default would exist 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.
"Warehouse Debt" means Indebtedness of the Company or a Restricted
Subsidiary 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 or Servicing
Rights financed under such Warehouse Facility, until such time as such Eligible
Receivables or Servicing Rights 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 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, origination or holding of Receivables or
Servicing Rights by the Company or a Restricted Subsidiary.
"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
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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.
SECTION 1.2 -- OTHER DEFINITIONS.
TERM DEFINED IN SECTION
"Affiliate Transaction"............................................ 4.11
"Asset Sale Offer"................................................. 4.10
"Asset Sale Offer Amount".......................................... 3.9
"Asset Sale Offer Period".......................................... 3.9
"Bankruptcy Law"................................................... 6.1
"Change of Control Offer".......................................... 4.16
"Change of Control Payment"........................................ 4.16
"Change of Control Payment Date"................................... 4.16
"Covenant Defeasance".............................................. 8.3
"Custodian"........................................................ 6.1
"Event of Default"................................................. 6.1
"Incur"............................................................ 4.9
"Legal Defeasance"................................................. 8.2
"Paying Agent"..................................................... 2.3
"Registrar"........................................................ 2.3
"Restricted Payments".............................................. 4.7
SECTION 1.3 -- INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
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 Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company.
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All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
SECTION 1.4 -- RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include
the singular;
(e) provisions apply to successive events and transactions; and
(f) the words "he," "his," and "him" refer to both the masculine and
feminine gender.
ARTICLE 2
THE NOTES
SECTION 2.1 -- FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, which is part of this Indenture.
The Notes may have notations, legends or endorsements required by law or usage
or required by a securities exchange. 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 Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
SECTION 2.2 -- FORM OF LEGEND FOR GLOBAL NOTES.
Every Global Note authenticated and delivered hereunder shall bear a
legend in substantially the following form:
This Note is a Global Note within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Note may not be transferred to, or
registered or exchanged for Notes registered in the name of, any
Person other than the Depositary or a nominee thereof and no such
transfer may be registered, except in the limited circumstances
described in the Indenture. Every Note authenticated and delivered
upon registration of transfer of, or in exchange for or in lieu
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of, this Note shall be a Global Note subject to the foregoing, except
in such limited circumstances.
SECTION 2.3 -- NOTES IN GLOBAL FORM.
A Note in global form shall represent such of the outstanding Notes as
shall be specified therein and may provide that it shall represent the aggregate
amount of outstanding notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be reduced to reflect exchanges. Any endorsement of a Note in global form to
reflect the amount, or any increase or decrease in the amount, of outstanding
notes represented thereby shall be made by the Trustee and in such manner as
shall be specified in such Note. Any instructions by the Company with respect
to a Note in global form, after its initial issuance, shall be in writing but
need not comply with Section 10.2.
SECTION 2.4 -- EXECUTION AND AUTHENTICATION.
Two Officers of the Company shall sign the Notes for the Company by manual
or facsimile signature.
If an Officer of the Company whose signature is on a Note no longer holds
that office at the time the Note is authenticated, the Note shall nevertheless
be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The Trustee's signature shall be conclusive evidence that the Note
has been authenticated under this Indenture.
The Trustee shall authenticate Notes for original issue up to the aggregate
principal amount stated in the Notes, upon a written order of the Company signed
by two Officers. The aggregate principal amount of Notes outstanding at any
time may not exceed the amount set forth in the Notes except as provided in
Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate of the
Company.
SECTION 2.5 -- REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may appoint one or more coregistrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company shall notify the
Trustee of the name and address of any Agent not a party to this Indenture. If
the Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent, Registrar or coregistrar.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as agent for service of notices and demands in
connection with the Notes.
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SECTION 2.6 -- PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary of the Company) shall have no
further liability for the money delivered to the Trustee. If the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.7 -- HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders and the
Company shall otherwise comply with TIA (S) 312(a).
SECTION 2.8 -- TRANSFER AND EXCHANGE.
When Notes (except Global Notes) are presented to the Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Notes of other denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transactions are met;
provided, however, that any Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar and the Trustee
duly executed by the Holder thereof or by his attorney duly authorized in
writing. To permit registrations of transfer and exchanges, the Company shall
issue and the Trustee shall authenticate Notes at the Registrar's request,
subject to such rules as the Trustee may reasonably require.
Neither the Company nor the Registrar shall be required (i) to issue,
register the transfer of or exchange Notes during a period beginning at the
opening of business on a Business Day 15 days before the day of any selection of
Notes for redemption under Section 3.2 and ending at the close of business on
the day of selection, (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, being redeemed in part or (iii) to
register the transfer or exchange of a Note between the record date and the next
succeeding interest payment date.
No service charge shall be charged to any Holder of a Note for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company or the Trustee may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than such transfer tax or similar governmental charge payable
upon exchanges pursuant to Sections 2.10, 3.6, or 9.5 hereof, which shall be
paid by the Company).
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Prior to due presentment to the Trustee for registration of the transfer of
any Note, the Trustee, any Agent or the Company may deem and treat the Person in
whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of, or premium, if any, on such Note
and for all other purposes whatsoever, whether or not such Note is overdue, and
neither the Trustee, any Agent or the Company shall be affected by notice to the
contrary.
The provisions of Clauses (1), (2), (3), (4) and (5) below shall apply only
to Global Notes:
(1) Each Global Note authenticated under this Indenture shall be
registered in the name of the Depositary or a nominee thereof and delivered
to the Depositary or a nominee thereof or custodian therefor, and each such
Global Note shall constitute a single Note for all purposes of this
Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Note in whole or in part, may be registered, and no transfer of a Global
Note in whole or in part may be registered, in the name of any Person other
than the Depositary or a nominee thereof unless (A) the Depositary (i) has
notified the Company that it is unwilling or unable to continue as
Depositary and no successor Depositary shall have been appointed, or (ii)
has ceased to be a clearing agency registered under the Exchange Act, or
(B) the Company, in its sole discretion, shall have so determined.
(3) Subject to Clause (2) above, any exchange of a Global Note for
other Notes may be made in whole or in part, and all Notes issued in
exchange for a Global Note or any portion thereof shall be registered in
such names as the Depositary for such Global Note shall direct.
(4) So long as all of the Notes are evidenced by a Global Note, the
Note Registrar and the Trustee shall be entitled to deal with the
Depositary for all purposes of this Indenture (including the payment of
principal and interest on such Global Note and the giving of instructions,
notices and communications hereunder) as the sole holder of such Global
Note.
(5) Every Note authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Note or any portion
thereof, whether pursuant to this Section, Section 2.9, 2.12 or 3.6 or
otherwise, shall be authenticated and delivered in the form of, and shall
be, a Global Note, unless such Note is registered in the name of a Person
other than the Depository for such Global Note or a nominee thereof.
SECTION 2.9 -- REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, and the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Company shall issue, and the Trustee, upon the written
order of the Company signed by two Officers, shall authenticate a replacement
Note if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent or any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge for its expenses in replacing a
Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
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SECTION 2.10 -- OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee, except for those canceled by it, those delivered to it for cancellation
and those described in this Section 2.8 as not outstanding. Except as set forth
in Section 2.9 hereof, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.1
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary of the Company or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.11 -- TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any Subsidiary of the Company or any of their respective Affiliates
shall be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Trustee knows are so owned shall
be so disregarded. Notwithstanding the foregoing, Notes that are to be acquired
by the Company, any Subsidiary of the Company or any Affiliate of the Company
pursuant to an exchange offer, tender offer or other agreement shall not be
deemed to be owned by the Company, a Subsidiary of the Company or an Affiliate
of the Company until legal title to such Notes passes to the Company, such
Subsidiary or such Affiliate, as the case may be.
SECTION 2.12 -- TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee, upon a written order of the Company signed by two
Officers of the Company, shall authenticate definitive Notes in exchange for
temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
SECTION 2.13 -- CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the
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Company promptly following any such destruction. The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
SECTION 2.14 -- DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.1 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or,
upon the written request of the Company, the Trustee in the name and at the
expense of the Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
SECTION 2.15 -- CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number and, if it does
so, the Trustee shall use the 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 Notes and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company will
promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION
SECTION 3.1 -- NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.7 hereof, it shall furnish to the Trustee at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
SECTION 3.2 -- SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed among the Holders of the Notes on a pro
rata basis or by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of partial redemption by lot, the
particular Notes to be redeemed 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 Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not
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a multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
SECTION 3.3 -- NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.9 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(h) 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 Notes.
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 deliver to the Trustee, at least 15 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.
SECTION 3.4 -- EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
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SECTION 3.5 -- DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes 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, and accrued interest on, all
Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.1 hereof.
SECTION 3.6 -- NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's request, the Trustee shall authenticate for the Holder
at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
SECTION 3.7 -- OPTIONAL REDEMPTION.
The Company shall not have the option to redeem the Notes pursuant to this
Section 3.7 prior to _________, 2002. Thereafter, the Company shall have the
option to redeem the Notes, in whole or in part, at any time or from time to
time, upon not less than 30 nor more than 60 days' prior notice to each Holder,
at the following redemption prices (expressed as percentages of principal
amount) plus accrued and unpaid interest thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on August 1 of the
years indicated below:
YEAR PERCENTAGE
---- -----------
2002 ___%
2003 ___%
and thereafter
Any redemption pursuant to this Section 3.7 shall be made pursuant to the
provisions of Sections 3.1 through 3.6 hereof.
SECTION 3.8 -- NO MANDATORY REDEMPTION.
Except as otherwise provided in this Indenture the Company shall have no
obligation to redeem the Notes prior to maturity.
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SECTION 3.9 -- OFFER TO REDEEM BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an Asset Sale Offer, it shall follow the procedures
specified below.
The Asset Sale Offer shall remain open for the period of time required by
Rule 14e-1 of the Exchange Act and no longer, except to the extent that a longer
period is required by applicable law (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 Section 4.10 hereof (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. Payment for
any Notes so purchased shall be made in the same manner as interest payments are
made.
If the Asset Sale Purchase Date is on or after an interest 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.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.9
and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain
open;
(b) the Asset Sale Offer Amount, the purchase price and the Asset Sale
Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or
accrue interest after the Asset Sale Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may only elect to have all of such Note purchased and may not elect
to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Asset Sale Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Asset Sale Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note purchased;
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(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Asset Sale Offer Amount, the Company shall select the Notes
to be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
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 such Notes tendered, and shall 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 3.9. The
Company, the depositary or the Paying Agent, as the case may be, shall promptly
(but in any case 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 promptly issue a new Note, and the Trustee, upon written
request 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 Purchase Date.
The Company shall comply, to the extent applicable, with the requirements
of Rule 14e-1 under the Exchange Act ("Rule 14e-1") and any other securities
laws or regulations in connection with the repurchase of any Notes pursuant to
this Section 3.9. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 3.9, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 3.9 by virtue
thereof.
Other than as specifically provided in this Section 3.9, any purchase
pursuant to this Section 3.9 shall be made pursuant to the provisions of
Sections 3.1 through 3.6 hereof.
ARTICLE 4
COVENANTS
SECTION 4.1 -- PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
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.
SECTION 4.2 -- MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee, Registrar or
coregistrar) where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any
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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.
The Company may also from time to time designate one or more other offices
or agencies where the Notes 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 for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.3.
SECTION 4.3 -- REPORTS.
Whether or not required by the rules and regulations of the SEC, so long as
any of the Notes are outstanding, the Company will furnish to the Holders of the
Notes (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 a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes the
financial condition and results of operations of the Company and the
consolidated Subsidiaries of the Company (showing in reasonable detail, either
on the face of the financial statements or in the notes thereto and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, if applicable, the financial condition and results of operations of
the Company and its Restricted Subsidiaries separately from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company that are Significant Subsidiaries, individually or in the aggregate)
and, with respect to the annual information only, a report thereon by the
Company's certified independent accountants, (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 and (iii) if the Company or any Subsidiary affects a
Securitization, all periodic master servicing reports for each Securitization
Trust related to any such Securitization.
SECTION 4.4 -- COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company (which currently ends on December 31 of each
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
the Company and its Subsidiaries have kept, observed, performed and fulfilled
their obligations under this Indenture, and further stating, as to each such
Officer signing such certificate, that to the best of his or her knowledge the
Company and each of its Subsidiaries 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 hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that, to the
best of his 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
Notes are prohibited or if such event has occurred, a description of the event
and what action the Company is taking or proposes to take with respect thereto.
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(b) 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 4.3 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements nothing has come to
their attention that would lead them to believe that the Company has violated
the financial covenants of Article 4 or Article 5 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.
(c) The Company shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default an Officers' Certificate specifying such Default or Event of
Default what action the Company is taking or proposes to take with respect
thereto.
SECTION 4.5 -- 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 such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment, in the Company's sole determination,
is not adverse in any material respect to the Holders of the Notes.
SECTION 4.6 -- 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 4.7 -- 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 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 intercompany Indebtedness payable to
the Company or a Restricted Subsidiary by any Restricted Subsidiary), except at
its stated maturity and except for up to $2.9 million of any such Indebtedness
represented by senior subordinated notes that is outstanding on the Issue Date;
or (iv) make any Restricted Investment (all such payments and other
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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;
(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 Section 4.9(a) 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)
and (iii) 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 provisions of this Section 4.7 shall not prohibit the following
Restricted Payments:
(i) the payment of 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;
(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, 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;
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(iv) payments in an amount not to exceed $350,000 in the aggregate
during any fiscal year of the Company (plus any such amount not utilized in
the preceding fiscal year) in connection with the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the
Company held by an employee or director of the Company or any of its
Subsidiaries, related to compensation or severance arrangements;
(v) advances to a Securitization Trust required to be made by the
Company or any Restricted Subsidiary (in its capacity or the holder of the
residual interest in such trust) if such advances rank senior in right of
payment to all other interests in, and Indebtedness of, such trust; and
(vi) 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 and,
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.
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 will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this Section 4.7. All such outstanding
Investments will 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 will 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 $350,000 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 $3.5 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 4.7 were
computed.
SECTION 4.8 -- DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING 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
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restrictions existing under or by reason of (a) agreements relating to
Indebtedness 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 agreements
relating to Indebtedness 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) 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 or assets acquired in the
ordinary course of business that impose restrictions of the nature described in
clause (iii) above on the property or assets so acquired, and (f) 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.
SECTION 4.9 -- INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
(a) The Company shall not, and shall not permit any of its Restricted
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 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) will 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 may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock and any Subsidiary 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.
(b) The foregoing provisions will not apply to:
(i) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness represented by Capital Lease Obligations, mortgage financings
or purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of (A) assets
(other than Receivables or Servicing Rights to be used in a Permitted
Business; or (B) construction or improvement of property used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount not to exceed in the aggregate as of any date an amount
equal to 15% of Consolidated Tangible Equity Capital as of such date.
(ii) 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
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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;
(iii) 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 (x)(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, and (y) any Indebtedness of the Company to any Restricted
Subsidiary is permitted by Section 4.7 hereof;
(iv) the incurrence by the Company of Indebtedness represented by
the Notes;
(v) Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the Issue Date;
(vi) 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;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations directly related to (w) Indebtedness of
the Company or a Restricted Subsidiary of the Company that was permitted by
this Indenture to be incurred, (x) Servicing Rights and Receivables held by
the Company or a Restricted Subsidiary pending sale, (y) Receivables of the
Company or a Restricted Subsidiary that have been sold pursuant to a
Warehouse Facility; or (z) Servicing Rights and Receivables that the
Company or a Restricted Subsidiary 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 (w) through (z), 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;
(viii) the incurrence of Acquired Debt by the Company of any
Subsidiary in a principal amount not to exceed $5 million in the aggregate
since the Issue Date (reduced by 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 Subsidiary acquired subject to such Acquired Debt), and is not
guaranteed by any such Person;
(ix) the Guarantee by the Company or any Subsidiary of the
Indebtedness of the Company or another Subsidiary that was permitted to be
incurred by another provision of this Section 4.9;
(x) the incurrence by the Company and the Restricted Subsidiaries
of Indebtedness in an aggregate principal amount at any time outstanding
not to exceed $5 million; and
(xi) (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
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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 and (B) the issuance
by an Unrestricted Subsidiary of the Company of preferred stock.
(c) The Company shall not, and shall not permit any Subsidiary to, incur
any Indebtedness that is contractually subordinated to any Indebtedness of the
Company or any such Subsidiary unless such Indebtedness is also contractually
subordinated to the Notes 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 or of limited recourse.
(d) For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Indebtedness described in clauses (i) through (xi) of Section
4.9(b) above or is entitled to be incurred pursuant to Section 4.9(a), the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to Section 4.9(a).
SECTION 4.10 -- 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 consideration in excess of $2.5 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% (or, in the case of the sale or
other disposition of any Residual Receivables (or interest therein) 50%) 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)
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.
Within 180 days after the receipt of any Net Proceeds from an Asset Sale
subject to this covenant, the Company or the Restricted Subsidiary, as the case
may be, may apply an amount equal to 100% of such Net Proceeds 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, or (iii) the purchase of Servicing Rights
which are eligible for collateral under any Warehouse Facility, or (iv) the
making of any capital expenditure, or (v) 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 outstanding Indebtedness or otherwise invest
such Net Proceeds in any manner not prohibited by this Indenture. Any Net
Proceeds from Asset Sales 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 $5 million, Company shall make
an offer to all Holders of the Notes (an "Asset Sale Offer") to purchase the
maximum principal amount of the Notes that may be purchased out of the
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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 the procedures set forth in this Indenture.
Notwithstanding the foregoing, the Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly sell or otherwise
convey or dispose of any Residual Receivables or interest therein for
consideration of which less than 85% is in the form of Cash Equivalents, unless:
(i) from and after the Issue Date, upon the creation of any Senior Residual
Receivables by the Company or any Restricted Subsidiary, the Company shall
designate, by an Officers' Certificate delivered to the Trustee, Senior Residual
Receivables with an aggregate book value equal to 25% of the book value of the
Senior Residual Receivables so created as Retained Residual Receivables
("Retained Residual Receivables") and no such designation shall have been
revoked except as provided below; (ii) none of the Residual Receivables sold,
conveyed or otherwise disposed of constitute Retained Residual Receivables
unless after giving effect to such sale, conveyance or other disposition the
aggregate amount of Senior Residual Receivables of the Company and its
Restricted Subsidiaries which are unencumbered by any Lien (of which no more
than 25% of the aggregate book value thereof shall constitute Retained Residual
Receivables) would be greater than or equal to 250% of all Senior Indebtedness
of the Company and its Restricted Subsidiaries; and (iii) after giving effect to
any such sale, conveyance or other disposition of Residual Receivables the
aggregate amount of Senior Residual Receivables of the Company and its
Restricted Subsidiaries which are unencumbered by any Lien (of which not more
than 25% of the aggregate book value thereof shall constitute Retained Residual
Receivables) would be greater than or equal to 150% of all Senior Indebtedness
of the Company and its Restricted Subsidiaries. From time to time, the Company
may revoke the designation of any Senior Residual Receivable as a Retained
Residual Receivable if the Company simultaneously designates as Retained
Residual Receivables (in addition to any other such designation otherwise
required by this Indenture) Senior Residual Receivables (not subject to any
Lien) with an aggregate book value equal to or greater than that of the Senior
Residual Receivables as to which such designation has been revoked. Any
determination of the amount of Residual Receivables 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 for which such
determination is being made and to any other sale of or Lien on or reduction of
Residual Receivables since the date of such balance sheet.
To the extent that the aggregate amount of the Notes tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, the Company or the
Restricted Subsidiary, as the case may be, may use any remaining Excess Proceeds
for general corporate purposes. If the aggregate principal amount of the Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, 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.
SECTION 4.11 -- 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 Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Subsidiary with an unrelated
Person and (ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction involving aggregate consideration in excess of $350,000, 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
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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 $1.5 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 with respect to Restricted Subsidiaries other than Subsidiary
Bank not to exceed $500,000 in aggregate principal amount outstanding at any one
time, and in the case of Subsidiary Bank not to exceed applicable individual and
aggregate legal limits and (D) Restricted Payments other than Restricted
Investments that are permitted by Section 4.7 hereof. The foregoing provisions
shall not apply to any transaction or agreement which would constitute an
Affiliate Transaction which is outstanding on the Issue Date and is described in
the Company's reports or proxy statements filed with the Commission under
"Certain Relationships and Related Transactions" or equivalent headings.
SECTION 4.12 -- 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.
SECTION 4.13 -- BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses.
SECTION 4.14 -- 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 of the 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.
SECTION 4.15 -- CORPORATE EXISTENCE.
Subject to Article 5 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 the Company or any such 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
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conduct of the business of the Company and its Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders
of the Notes.
SECTION 4.16 -- OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of the Notes
will have the right to require the Company to repurchase all (but not less than
all) 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 the Notes on the date specified in such notice, which
date shall be no earlier than the earliest date permitted under 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 Indenture
and described in such notice. 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 4.16, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.16 by virtue thereof.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all the 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 the
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 the Notes or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to each Holder of
the Notes so tendered the Change of Control Payment for such Notes.
(c) 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 Indenture applicable to a Change of Control Offer and purchases
all the Notes validly tendered and not withdrawn under such Change of Control
Offer.
SECTION 4.17 -- MAINTENANCE OF REGULATORY CAPITAL REQUIREMENTS.
The Company shall not permit Subsidiary Bank to be classified as other than
"well capitalized" as defined by 12 C.F.R. Section 565.4 (or its equivalent as
such regulation maybe amended from time to time).
SECTION 4.18 -- MAINTENANCE OF MINIMUM CONSOLIDATED TANGIBLE EQUITY CAPITAL.
The Company shall not at any time permit Consolidated Tangible Equity
Capital to be less than $__________.
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SECTION 4.20 -- RESTRICTIONS ON OTHER DEALINGS WITH TRUSTEE.
Neither the Company nor any Restricted Subsidiary will have any other
relationship with the Trustee except as Trustee under this Indenture; provided
that the Company and the Restricted Subsidiaries may have relationships with the
Trustee and its affiliates in the ordinary course of business, but the Trustee
or its affiliates may not be the "lead' bank in a loan transaction with the
Company or a Restricted Subsidiary.
ARTICLE 5
SUCCESSORS
SECTION 5.1 -- MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall 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 entity 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
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company) or the entity or 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) except in the case of a merger of the Company with or into a Wholly-
Owned Subsidiary of the Company, the Company or the entity or 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 as if such transaction had
occurred at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Leverage Ratio test set forth in the first paragraph of Section 4.9(a).
SECTION 5.2 -- SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company or the Subsidiary Bank in accordance with Section 5.1 hereof, the
successor corporation formed by such consolidation or into or with which the
Company or the Subsidiary Bank 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, lease, conveyance or other disposition, the provisions of this
Indenture referring to the "Company" shall refer instead to the successor
corporation and not to the Company) and may exercise every right and power of
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; provided, however, that the
predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meet the requirements of Section 5.1 hereof.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 -- EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on the
Notes and such default continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise;
(c) the Company fails to comply with any of the provisions of Section
4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18 or 5.1
hereof;
(d) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture, or the Notes for
60 days after notice to the Company by the Trustee or the Holders of at least
25% in aggregate principal amount of the Notes then outstanding;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Subsidiaries (or
the payment of which is guaranteed by the Company or any of its Subsidiaries),
whether such Indebtedness or guarantee now exists, or is created after the date
of this Indenture, which default (a) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or (b) results in the acceleration of such Indebtedness prior
to its express maturity and, in each case, the principal amount of any such
Indebtedness under which there has been a Payment Default or, together with the
principal amount of any other such Indebtedness the maturity of which has been
so accelerated, aggregates $1.5 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company, the
Subsidiary Bank or any other of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
and such judgment or judgments remain undischarged for a period (during which
execution shall not be effectively stayed) of 60 days, provided that the
aggregate of all such undischarged judgments exceeds $1.5 million;
(g) the Company, the Subsidiary Bank or any of its other Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
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(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction, or with respect to Subsidiary
Bank an authorized supervisory authority, enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
The term "Bankruptcy Law" means Title 11 of the United States Code or
any similar Federal or state law for the relief of debtors, and with respect to
Subsidiary Bank 12 U.S.C. (S) 11(c) or 12 U.S.C. (S) 6017(2) or successor
provisions. The term "Custodian" means any receiver, conservator, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
SECTION 6.2 -- ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.1 hereof with respect to the Company, the
Subsidiary Bank, any other Significant Subsidiary or any group of Significant
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Upon any such declaration, the Notes shall become
due and payable immediately. Notwithstanding the foregoing, if an Event of
Default specified in clause (g) or (h) of Section 6.1 hereof occurs with respect
to the Company, the Subsidiary Bank, any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, all outstanding Notes shall be due and payable immediately without
further action or notice. The Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after ________ __, 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 payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Notes
pursuant to Section 3.7 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to _______ __,
2002, by reason of any willful action (or
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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 _____, 2002,
then, upon acceleration of the Notes, an additional premium shall also become
and be immediately due and payable in an amount, for each of the years beginning
on __________ of the years set forth below, as set forth below (expressed as a
percentage of the accreted value to the date of payment that would otherwise be
due but for the provisions of this sentence):
YEAR PERCENTAGE
---- ----------
1998 ___%
1999 ___%
2000 ___%
2001 ___%
2002 ___%
SECTION 6.3 -- OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal or interest on the
Notes, to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note 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 6.4 -- WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, the Notes
(including in connection with an offer to purchase) (provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration). Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.5 -- CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. 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 Notes, or that may involve the Trustee in
personal liability.
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SECTION 6.6 -- LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the Notes
only if:
(a) the Holder gives to the Trustee written notice of a continuing Event
of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) 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
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes 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. Holders of the Notes
may not enforce this Indenture or the Notes except as provided in this
Indenture.
SECTION 6.7 -- RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note
including in connection with an offer to purchase, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.8 -- COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(a) or (b) 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 for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.9 -- 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 of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), 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
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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 7.7 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 7.7 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 that 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 Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10 -- PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, 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 Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any and interest,
respectively; and
Third: 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 of Notes pursuant to this Section 6.10.
SECTION 6.11 -- 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 of a
Note pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.1 -- DUTIES OF TRUSTEE.
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(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) 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.
(c) 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:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) 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
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) 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 7.2 -- RIGHTS OF TRUSTEE.
(a) 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.
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(b) 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.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.3 -- INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and as such may deal with the Company with the same rights
it would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.4 -- TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement herein or any statement in the Notes or any other
document in connection with the sale of the Notes or pursuant to this Indenture
other than its certificate of authentication.
SECTION 7.5 -- NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes 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 of principal of, premium, if any, or
interest on any Note, 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 the Notes.
SECTION 7.6 -- REPORTS BY TRUSTEE TO HOLDERS.
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Within 60 days after each ________ beginning with the _______ following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA (S) 313(a) (but if no event described in
TIA (S) 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA (S)
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC in accordance with TIA (S)
313(d).
SECTION 7.7 -- COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. 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 or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.7) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. 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 7.7 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. 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 6.1(g) or (h) 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.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
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SECTION 7.8 -- REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee. The Holders of Notes of a majority in principal amount of
the then outstanding Notes (excluding the votes of Trustee in its capacity as a
Holder of Notes) may remove the Trustee at any time by so notifying the Trustee
and the Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
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SECTION 7.9 -- SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee, provided that such corporation shall be otherwise qualified and
eligible under this Article 7. In case any Notes shall have been authenticated,
but not delivered by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
SECTION 7.10 -- ELIGIBILITY; DISQUALIFICATION.
(a) The Trustee hereunder shall have no other relationship with the
Company or any of its Subsidiaries except as Trustee under this Indenture.
(b) There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100.0 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 (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b). If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 7.10, it shall resign immediately in the
manner provided for in this Article.
SECTION 7.11 -- PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee that has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 -- OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.2 or 8.3 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.2 -- LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.5 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations
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under such Notes and this Indenture (and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.4 hereof, and
as more fully set forth in such Section, payments in respect of the principal
of, premium, if any, and interest on such Notes when such payments are due, (b)
the Company's obligations with respect to such Notes under Article 2 and Section
4.2 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Company may exercise
its option under this Section 8.2 notwithstanding the prior exercise of its
option under Section 8.3 hereof.
SECTION 8.3 -- COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be released from its
obligations under the covenants contained in Sections 4.7, 4.8, 4.9, 4.10, 4.11,
4.12, 4.13, 4.16, 4.17, 4.18 and 5.1 hereof with respect to the outstanding
Notes on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (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 Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.1 hereof, but, except as specified above,
the remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3 hereof, subject to the satisfaction of the
conditions set forth in Section 8.4 hereof, Sections 6.1(c) through 6.1(f)
hereof shall not constitute Events of Default.
SECTION 8.4 -- CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit or cause to be deposited with
the Trustee, in trust, for the benefit of the Holders, cash in United States
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest on the outstanding Notes on the stated date for payment thereof or on
the applicable redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of an election under Section 8.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since
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the date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes 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 on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Notes pursuant to this Article 8 concurrently with
such incurrence) or insofar as Sections 6.1(g) or 6.1(h) hereof is concerned, at
any time in the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) 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,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding creditors of the Company
or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.5 -- DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, 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 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes 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 8.4 hereof or the
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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 Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the C ompany any money or non-callable Government Securities held by it as
provided in Section 8.4 hereof 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 8.4(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.6 -- REPAYMENT TO THE 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 Note 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 Note shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not 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 8.7 -- REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.2 or
8.3 hereof, 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 Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.2 or 8.3 hereof,
as the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 -- WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.2 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder:
(a) to cure any ambiguity, defect or inconsistency, provided that such
action shall not adversely affect the interests of the Holders in any material
respect;
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(b) 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)
or to alter the provisions of Article 2 hereof (including the related
definitions) in a manner that does not materially adversely affect any Holder;
(c) to provide for the assumption of the Company's obligations to the
Holders in the case of a merger or consolidation not prohibited by this
Indenture;
(d) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights
hereunder of any Holder; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.2 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
SECTION 9.2 -- WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.2, the Company and the
Trustee may amend or supplement this Indenture (including Section 3.9, 4.10 and
4.16 hereof) and 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 consents obtained in connection with a purchase of, or
tender offer or exchange offer for the Notes), and, subject to Sections 6.4 and
6.7 hereof, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest on the Notes, except a payment default resulting from an acceleration
that has been rescinded) 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 the then outstanding Notes (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.2 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
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After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected,
an amendment or waiver may not (with respect to any Notes held by a non-
consenting Holder):
(a) reduce the percentage in principal amount of Notes, the consent of
whose Holders is required for an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of the
Notes except as provided above with respect to Sections 3.9, 4.10 and 4.16
hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) 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 then outstanding Notes and a waiver of the payment
default that resulted from such acceleration);
(e) make any Note payable in currency other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal or premium, if any, or interest on the Notes;
(g) waive a redemption payment with respect to any Note (other than a
payment required by Sections 4.10 or 4.16 hereof);
(h) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(i) modify the provisions of this Section 9.2.
SECTION 9.3 -- COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.4 -- REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note.
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However, any such Holder of a Note or subsequent Holder of a Note may revoke the
consent as to its Note if the Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.
SECTION 9.5 -- NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.6 -- TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.1) shall be
fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 -- TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA (S) 318(c), the imposed duties shall control.
SECTION 10.2 -- NOTICES.
Any notice or communication by the Company or the Trustee to the other
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 other's address:
If to the Company:
Matrix Capital
1380 Lawrence Street, Suite 1410
Denver, Colorado 80204
Attention: Guy A. Gibson
Telecopier No.: (303) 595-9906
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If to the Trustee:
First Trust National Association
Attention:
Telex No.:
Telecopier No.:
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 (S) 313(c), to the extent required by the TIA. Failure
to mail a 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.
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.
SECTION 10.3 -- COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company,
the Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
SECTION 10.4 -- CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
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(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 10.5 -- STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA
(S) 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 10.6 -- RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.7 -- NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYERS 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 Notes, this Indenture, the Guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
the Notes by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
SECTION 10.8 -- GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES.
SECTION 10.9 -- NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
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This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 10.10 -- SUCCESSORS AND ASSIGNS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors and assigns. All agreements of the Trustee in this Indenture
shall bind its successors and assigns.
SECTION 10.11 -- SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.12 -- LEGAL HOLIDAYS.
In any case where any interest payment date, redemption date, purchase
date or stated maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or the Notes) payment of
interest or principal and premium, if any, need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the interest payment date, redemption date, purchase date or at
the stated maturity, provided that no interest shall accrue for the period from
and after such interest payment date, redemption date, purchase date or at the
stated maturity, as the case may be.
SECTION 10.13 -- COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 10.14 -- TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
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SIGNATURES
DATED AS OF ,1997 MATRIX CAPITAL CORPORATION
---------
By:
---------------------------------
Name:
Title:
DATED AS OF , 1997 FIRST TRUST NATIONAL ASSOCIATION
---------
By:
---------------------------------
Name:
Title:
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EXHIBIT A
(FACE OF NOTE)
================================================================================
CUSIP/CINS_____________
___% Senior Notes due 2004
REGISTERED REGISTERED
No._______ $_________
MATRIX CAPITAL CORPORATION
promises to pay to ______________________________________ or registered assigns,
the principal sum of $ _________ (_________________________dollars) on ________,
2004.
Interest Payment Dates: _______________, and ______________.
Record Dates: _________________, and ____________________.
Dated: ________________________
MATRIX CAPITAL CORPORATION
By:
----------------------------
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
By:
----------------------------
================================================================================
(BACK OF NOTE)
MATRIX CAPITAL CORPORATION
___$ Senior Notes due 2004
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Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Matrix Capital Corporation, a Colorado corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
___% per annum from _____, 1997 until maturity. The Company will pay interest
semi-annually on ___________ and ___________ of each year, or if any such day is
not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be _____________, 199__. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the ___________ or ___________ next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the
Indenture with respect to defaulted interest. The Notes will be payable as to
principal, premium, if any, and interest at the office or agency of the Company
maintained for such purpose within or without the [ ],
or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, premium on, all Notes and
all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, First Trust National Association,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of _____, ____ 1997 ("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 (15
USC (S)(S) 7aaa-77bbbb). The Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. To the
extent any provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the indenture shall govern and be controlling. The
Notes are obligations of the Company limited to $20,000,000 in aggregate
principal amount.
5. OPTIONAL REDEMPTION. The Company shall not have the option to redeem
the Notes pursuant to Section 3.7 of the Indenture prior to _________, 2002.
Thereafter, the Company shall have the option to redeem the Notes, in whole or
in part, at any time or from time to time, upon not less than 30 nor more than
60 days' prior notice to each Holder, at the following redemption prices
(expressed as percentages of principal amount) plus accrued and unpaid interest
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on August 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002 ___%
2003 ___%
and thereafter
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Any redemption pursuant to Section 3.7 of the Indenture shall be made
pursuant to the provisions of Sections 3.1 through 3.6 thereof.
6. NO MANDATORY REDEMPTION. Except as provided in the Indenture, the
Company shall have no obligation to redeem the Notes prior to maturity.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder of the
Notes will have the right to require the Company to repurchase all (but not less
than all) of such Holder's Notes (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. Within ten
days following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, within five days of each date on which the aggregate amount of Excess
Proceeds exceeds $5 million, the Company shall commence an offer to all Holders
of Notes (as "Asset Sale Offer") pursuant to Section 3.9 of the Indenture 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 the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company (or the Restricted
Subsidiary) may use such deficiency for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on
a pro rata basis. Holders of Notes that are the subject of an offer to purchase
will receive an Asset Sale Offer from the Company prior to any related purchase
date and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. On and after the redemption
date interest ceases to accrue on Notes or portions thereof called for
redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons 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 the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, 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 then outstanding
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. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the
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assumption of the Company's obligations to Holders of the Notes in 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 the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default 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 when the same becomes
due and payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise, (iii) failure by the Company to comply with
Section 4.7, 4.9, 4.10, 4.12, 4.16, 4.17, 4.18 or 5.01 of the Indenture; (iv)
failure by the Company for 30 days after notice to the Company by the Trustee or
the Holders of at least 25% in principal amount of the Notes then outstanding to
comply with certain other agreements in the Indenture or the Notes; (v) default
under certain other agreements relating to Indebtedness of the Company which
default constitutes a Payment Default or results in the acceleration of such
Indebtedness prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 days; and (vii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. 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.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may become the owner of pledgee of Notes, and as such may deal
with the Company or its Affiliates. Otherwise, the Trustee shall have no other
relationship with the Company or any of its Subsidiaries except as Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture 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.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. EXCHANGE OF NOTES. This Global Note shall be exchangeable for Notes
registered in the names of Persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue as the Depositary or if at any time such Depositary ceases to be a
clearing agency registered under the United States Securities Exchange Act of
1934, at a time when such Depositary is required to be so registered in order to
act as a Depositary, and the Company fails to appoint a successor Depositary
under the Indenture or (ii) the Company executes and delivers to the Trustee a
Company Order that the Global Note shall be so exchangeable. To the extent that
the Global Note is exchangeable pursuant to the preceding sentence, it shall be
exchangeable for Notes registered in such names as the Depositary shall direct.
Notwithstanding any other provision herein, the Global Note may not be
transferred except as a whole by the Depositary to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary.
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[If in definitive registered form, insert--As provided in the Indenture
and subject to certain limitations therein set forth, the transfer of this Note
is registrable in the Note Register, upon surrender of this Note for
registration of transfer at the office or agency of the Company in _____________
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Note Registrar duly executed by, the Holder
hereof or his or her attorney duly authorized in writing, and thereupon one or
more new Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.]
16. 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).
17. 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 the Trustee may 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. Requests may be made to:
MATRIX CAPITAL CORPORATION
1380 Lawrence Street, Suite 1410
Denver, Colorado 80204
ATTENTION: GUY A. GIBSON
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EXHIBIT B
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- ----------------------------------------------------------
(Insert assignee's Social Security Number or Tax I.D. Number)
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________________________ 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:*
The signature on this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatever and must be guaranteed. The signature(s)
should be guaranteed by an eligible guarantor institution (banks, stockholders,
savings and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934, as amended.
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EXHIBIT C
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.16 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.16
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$_____________________________
Date: _______________________ Your Signature:___________________________
(Sign exactly as your name appears
on the Note)
Tax identification No.: _________________
SIGNATURE GUARANTEE:*
The signature on this assignment must correspond with the name as it
appears upon the face of the within Note in every particular, without alteration
or enlargement or any change whatever and must be guaranteed. The signature(s)
should be guaranteed by an eligible guarantor institution (banks, stockholders,
savings and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934, as amended.
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EXHIBIT 5.1
[JENKENS & GILCHRIST LETTERHEAD]
September 19, 1997
Matrix Capital Corporation
1380 Lawrence Street
Suite 1410
Denver, Colorado 80204
Ladies and Gentlemen:
This opinion is being delivered in connection with the registration by
Matrix Capital Corporation (the "Issuer") of the issuance and sale of its ___%
Senior Notes Due 2004 (the "Notes"). The Notes are to be issued and sold
pursuant to a Registration Statement on Form S-1 (the "Registration Statement"),
Registration No. 333-34977, filed by the Issuer on September 4, 1997 with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended by Amendment No. 1 thereto. The Notes will be issued under
an Indenture (the "Indenture"), among the Issuer and First Trust National
Association as Trustee (the "Trustee"), in substantially the form filed as
Exhibit 4.1.
We are of the opinion that, when (a) the Indenture under which the Notes
will be issued has been qualified under the Trust Indenture Act of 1939, as
amended, (b) the Notes have been executed by the Issuer and (c) the Notes have
been delivered by the Issuer in the manner and for the consideration stated in
the Registration Statement and the Indenture, the Notes will be legally issued
and binding obligations of the Issuer.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and in the Prospectus included therein.
In giving such consent, we do not admit that we come within the category of
persons whose consent is required by Section 7 of the Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/
JENKENS & GILCHRIST,
A Professional Corporation
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EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
----------------------------------
FIRST TRUST NATIONAL ASSOCIATION
(EXACT name of trustee as specified in its charter)
NOT APPLICABLE 41-0257700
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. National Bank) Identification No.)
FIRST TRUST CENTER
180 EAST FIFTH STREET
ST. PAUL, MINNESOTA 55101
(Address of principal executive offices) (Zip code)
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MATRIX CAPITAL CORPORATION
(Exact name of obligor as specified in its charter)
COLORADO 84-1233716
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1380 LAWRENCE STREET, SUITE 1410
DENVER, CO 80204
(Address of principal executive offices) (Zip code)
% SENIOR NOTES DUE 2004
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1. GENERAL INFORMATION Furnish the following information as to the
--------------------
Trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH THE OBLIGOR If the obligor is an affiliate of the
-----------------------------
Trustee, describe each such affiliation.
None
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which
the Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
----------------
statement of eligibility.
Each of the exhibits listed below, other than Exhibit 6, is incorporated
herein by reference from registration numbers referenced after each
exhibit below.
1. Copy of Articles of Association. REGISTRATION #22-27000
2. Copy of Certificate of Authority to Commence Business.
REGISTRATION #22-27000
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).
REGISTRATION #22-27000
4. Copy of existing By-Laws. REGISTRATION #22-27000
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321 (b) of the
Act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
REGISTRATION #333-34585
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SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust National Association, an Association organized and
existing under the laws of the United States, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and attested on the 10th day of
September, 1997.
FIRST TRUST NATIONAL ASSOCIATION
[SEAL]
/s/ PATRICIA M. PETERS
----------------------------------------
Patricia M. Peters
Assistant Vice President
/s/ GRETCHEN L. MIDDENTS
- ------------------------------------
Gretchen L. Middents
Assistant Secretary
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NOTE
The answers to this statement insofar as such answers relate to what persons
have been underwriters for any securities of the obligor within three years
prior to the date of filing this statement, or what persons are owners of 10% or
more of the voting securities of the obligor, or affiliates, are based upon
information furnished to the Trustee by the obligor. While the Trustee has no
reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and attested, on the 10th day of
September, 1997.
FIRST TRUST NATIONAL ASSOCIATION
[SEAL]
/s/ Patricia M. Peters
----------------------------------------
Patricia M. Peters
Assistant Vice President
/s/ Gretchen L. Middents
- ------------------------
Gretchen L. Middents
Assistant Secretary
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EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, FIRST TRUST NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exhange
Commission upon its request therefor.
Dated: September 10, 1997
FIRST TRUST NATIONAL ASSOCIATION
/s/ Patricia M. Peters
----------------------
Patricia M. Peters
Assistant Vice President
