EXHIBIT 4.2
FIRST SUPPLEMENTAL INDENTURE
Dated as of October 25, 2002,
BY AND BETWEEN
METRIS COMPANIES INC.
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
$150,000,000
Renewable Unsecured Subordinated Notes
TABLE OF CONTENTS
ARTICLE I SCOPE OF FIRST SUPPLEMENTAL INDENTURE...................................................................1
ARTICLE II DEFINITIONS............................................................................................2
ARTICLE III AUTHORIZATION AND TERMS...............................................................................5
Section 3.1 Creation of the Notes.......................................................................5
Section 3.2 Aggregate Principal Amount..................................................................5
Section 3.3 Denominations; Term; Lack of Security and Subordination.....................................6
Section 3.4 Interest and Interest Payments; Maturity....................................................6
Section 3.5 Valid Issuance; Rejection; Rescission.......................................................8
Section 3.6 Registrar and Paying Agent; Transfer and Exchange...........................................9
Section 3.7 Payment of Principal and Interest; Principal and Interest Rights Preserved.................10
Section 3.8 Outstanding Notes..........................................................................11
Section 3.9 Treasury Securities........................................................................11
Section 3.10 Defaulted Interest.........................................................................11
Section 3.11 Execution, Authentication And Delivery.....................................................11
Section 3.12 Book-Entry Registration....................................................................12
Section 3.13 Initial and Periodic Statements............................................................13
Section 3.14 Redemption of Notes at the Company's Election..............................................13
Section 3.15 Repurchase of Notes at the Holder's Request................................................13
Section 3.16 Defaults...................................................................................15
Section 3.17 Covenants..................................................................................16
ARTICLE IV MISCELLANEOUS.........................................................................................16
Section 4.1 Agents.....................................................................................16
Section 4.2 Counterparts...............................................................................16
Section 4.3 Headings...................................................................................16
Section 4.4 Ratification of Base Indenture; First Supplemental Indenture Controls......................16
Section 4.5 Severability...............................................................................17
Section 4.6 Governing Law..............................................................................17
Section 4.7 Trustee....................................................................................17
EXHIBITS:
A - Form of Note
i
This
FIRST SUPPLEMENTAL INDENTURE is hereby entered into as of October
25, 2002 (the "
First Supplemental Indenture") by and between
Metris Companies
Inc., a Delaware corporation (the "Company") and U.S. Bank National Association,
a national banking association (the "Trustee").
WHEREAS, the Company and the Trustee are parties to the Indenture dated
as of October 25, 2002 between the Company and the Trustee (the "Base Indenture"
and, as supplemented, the "Indenture"); and
WHEREAS, the Company executed and delivered the Base Indenture to the
Trustee to provide for the issuance of the Company's unsecured subordinated
debentures, notes or other evidences of subordinated indebtedness (the
"Securities") to be issued from time to time in one or more series as might be
determined by the Company under the Base Indenture; and
WHEREAS, Section 8.01 of the Base Indenture provides that without the
consent of any Holders under the Base Indenture, the Company, when authorized by
a Board Resolution, and the Trustee at any time and from time to time, may enter
into Indentures supplemental to the Base Indenture for, among other things, the
purpose of establishing the form or terms of Securities of any series as
permitted by Sections 2.01, 3.01 and 8.01 of the Base Indenture; and
WHEREAS, the Company by action duly taken has authorized the issuance
of a series of Securities to be designated as renewable unsecured subordinated
notes, which series is limited in aggregate principal amount to $150 million and
is subject to such provisions as are set forth in this
First Supplemental
Indenture to the Base Indenture; and
WHEREAS, the Company, in the exercise of the powers and authority
conferred upon and reserved to it under Section 8.01 of the Base Indenture and
pursuant to appropriate action of its Board of Directors or committees thereof,
has fully resolved and determined to make, execute and deliver to the Trustee a
First Supplemental Indenture in the form hereof for the purposes herein
provided; and
WHEREAS, all conditions have been complied with, all actions have been
taken and all things have been done which are necessary to make the Securities,
when issued by the Company and authenticated by or on behalf of the Trustee, the
valid obligations of the Company and to make this
First Supplemental Indenture a
valid and binding supplemental indenture.
NOW THEREFORE, 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 Notes as follows:
ARTICLE I
SCOPE OF
FIRST SUPPLEMENTAL INDENTURE
The changes, modifications and supplements to the Base Indenture
affected by this
First Supplemental Indenture shall be applicable only with
respect to, and govern the terms of, the Notes, and shall not apply to any other
Securities that may be issued under the Base Indenture unless a supplemental
indenture with respect to such other Securities specifically incorporates such
changes, modifications and supplements.
ARTICLE II
DEFINITIONS
The following terms shall have the meaning set forth below in this
First Supplemental Indenture. Except as otherwise provided in this First
Supplemental Indenture, all words, terms and phrases defined in the Base
Indenture (but not otherwise defined herein) shall have the same meaning herein
as in the Base Indenture. To the extent terms defined herein differ from terms
defined in the Base Indenture the terms defined herein will govern for purposes
of this First Supplemental Indenture and the Notes.
"Account" means the record of beneficial ownership of a Note maintained
by the Registrar.
"Agent" means any Registrar, Paying Agent or co-registrar of the Notes
or any Person appointed and retained by the Company to perform certain of the
duties or obligations, or exercise certain of the rights and discretions, of the
Company hereunder, on behalf of the Company pursuant to Sections 3.6 or 4.1
hereof.
"Base Indenture" shall have the meaning set forth in the recitals.
"Company" shall have the meaning set forth in the recitals.
"Consolidated Net Worth" means, as measured at the end of each calendar
quarter, the Company's stockholders' equity as determined on a consolidated
basis in conformity with generally accepted accounting principles.
"First Supplemental Indenture" shall have the meaning set forth in the
recitals.
"Indenture" shall have the meaning set forth in the recitals.
"Interest Accrual Period" means, as to each Note, the period from the
later of the Issue Date of such Note or the last Payment Date upon which an
interest payment was made until and including the day before the following
Payment Date during which interest accrues on each Note with respect to any
Payment Date.
"Issue Date" means, with respect to any Note, the date on which such
Note is deemed to be validly issued pursuant to the provisions of Section
3.5(a), or the date that the Note is renewed as of the Maturity Date pursuant to
Section 3.4(c).
"Maturity Date" means, with respect to any Note, the date on which the
principal of such Note becomes due and payable as therein provided.
"Maturity Record Date" means, with respect to any Note, as of 11:59
p.m. on the date fifteen (15) days prior to the Maturity Date or Redemption Date
applicable to such Note.
"Note" or "Notes" shall have the meaning set forth in Section 3.1.
"Notes Register" shall have the meaning set forth in Section 3.6(b).
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"Notice of Maturity" means a written notice from the Company to a
Holder (as further described in Section 3.4(b)) that the Holder's Notes will be
maturing on the related Maturity Date.
"Paying Agent Agreement" means that certain agreement by which the
Company has engaged the Paying Agent to act as the paying agent for the Notes in
the event a third party acts as Paying Agent.
"Payment Account" means the bank account designated by the Holder to
receive payments of interest and/or principal due on such Holder's Notes.
"Payment Date" means (i) with respect to any Note for which monthly
interest payments are required to be made, the first day of the following
calendar month or such other date as is designated by the Holder pursuant to
subsection 3.4(a), (ii) with respect to any Note for which interest is required
to be made quarterly, semi-annually or annually, the same day of the month as
the quarterly, semi-annual or annual anniversary of the Issue Date of the Note
(except in the case where the Issue Date of a Note is the 29th, 30th or 31st day
of the month and there is no like date in the anniversary month, in which case
the Payment Date for such month shall be the first day of the following month)
and (iii) with respect to each Note, the Maturity Date (or such date following
the Maturity Date on which payment is made pursuant to subsection 3.4(b)
hereof), the Repurchase Date or the Redemption Date of the Note; provided, that
if any such day in the preceding clauses (i) through (iii) is not a Business
Day, the Business Day immediately following such day.
"Prospectus" means the prospectus included in the Registration
Statement at the time it was declared effective by the SEC, as supplemented by
the Prospectus Supplement and all other prospectus supplements (including
interest rate supplements) relating to the Notes that are filed with the SEC
pursuant to Rule 424(b) under the Securities Act. References to the Prospectus
shall be deemed to refer to and include the documents incorporated therein by
reference.
"Prospectus Supplement" means the prospectus supplement dated October
25, 2002 relating to the Notes filed with the SEC pursuant to Rule 424(b) under
the Securities Act on October 25, 2002.
"Qualified Sales and Financing Transaction" means any transaction or
series of transactions (including without limitation the performance and
liquidation or termination of such transactions) that may be entered into,
sponsored or conducted by the Company or any of its Affiliates pursuant to which
the Company or any of its Affiliates may sell, convey, finance, pledge or
otherwise transfer to (a) a Special Purpose Entity (in the case of a transfer by
the Company or any of its Affiliates) or (b) any other Person (in the case of a
transfer by the Company or a Special Purpose Entity), or may grant a security
interest in or pledge, any Receivables, any securities backed by or any
interests in Receivables (whether now existing or arising or acquired in the
future) and any assets related thereto including, without limitation, all
collateral securing such Receivables, all contracts and contract rights and all
guarantees or other obligations in respect of such Receivables, proceeds of such
Receivables and other assets (including contract rights), which are customarily
sold, transferred or pledged by the Company or its Affiliates as security in
connection with asset securitization, secured financing or other
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transactions involving Receivables, including the ability to finance and sell
the residual cash flows retained from all such transactions.
"Receivables" means credit card receivables, installment sale
contracts, loans evidenced by promissory notes secured by assets, leases,
mortgages or other finance receivables or instruments purchased, originated or
owned by the Company or any of its Affiliates.
"Redemption Date" shall have the meaning set forth in Section 3.4(d).
"Redemption Notice" means a written notice from the Company to the
Holders (as further described in Section 3.4(d)) stating that the Company is
redeeming all or a specified portion of Notes pursuant to Section 3.14, with a
copy to the Registrar and the Trustee.
"Redemption Price" means, with respect to any Note to be redeemed, the
principal amount of such Note plus the interest accrued but unpaid during the
Interest Accrual Period up to and not including the Redemption Date for such
Note.
"Registrar" shall have the meaning set forth in Section 3.6(b).
"Registration Statement" means the registration statement on Form S-3
(File No. 333-47066) of the Company filed with the SEC under the Securities Act
on or about September 29, 2000. References to the Registration Statement shall
be deemed to refer to and include documents incorporated therein.
"Regular Record Date" means, with respect to each Payment Date, as of
11:59 p.m. on the date fifteen days prior to such Payment Date.
"Renewable Unsecured Subordinated Notes" shall have the meaning set
forth in Section 3.1.
"Repayment Election" means a written notice from a Holder to the
Company (as further described in Section 3.4(b)) stating that repayment of the
Holder's Notes is required in connection with the maturity of such Notes.
"Repurchase Date" shall have the meaning set forth in Section 3.15(d).
"Repurchase Penalty" shall have the meaning set forth in Section
3.15(b).
"Repurchase Price" means, with respect to any Note to be repurchased,
the principal amount of such Note plus the interest accrued but unpaid during
the Interest Accrual Period up to and not including the Repurchase Date for such
Note, minus the Repurchase Penalty, if any.
"Repurchase Request" means a written notice from a Holder to the
Company (as further described in Section 3.4(e)) stating that such Holder is
making an irrevocable request for the Company to repurchase such Holder's Notes
pursuant to Section 3.15.
"SEC" means the U.S. Securities and Exchange Commission.
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"Securities" shall have the meaning set forth in the recitals.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Special Purpose Entities" means Affiliates of the Company formed for
the specific purpose of securitizing or financing credit card receivables or
facilitating the Company's warehouse, residual interests and other bankruptcy
remote financing facilities and engaging in activities solely related to the
administration or running of the foregoing.
"Subscription Agreement" means a Subscription Agreement entered into by
a Person under which such Person has committed to purchase certain Notes as
identified thereby and which is in substantially the form filed as Exhibit 4.3
to the Company's Form 8-K dated October 25, 2002.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Ltd." means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Ltd., a Minnesota
corporation.
"Total Permanent Disability" means a determination by a physician
approved by the Company that the Holder of a Note who is a natural person, who
was gainfully employed on a full time basis at the Issue Date of such Note is
unable to work on a full time basis during the succeeding twenty-four months.
For purposes of this definition, "working on a full time basis" shall mean
working at least 40 hours per week.
"Trustee" shall have the meaning set forth in the recitals.
"Written Confirmation" means a written confirmation of the acceptance
of a subscription for, or the transfer or pledge of, a Note or Notes in the form
of a transaction statement executed or issued by the Company and delivered to
the Holder of such Note or Notes with a copy to the Registrar and the Trustee,
which is in substantially the form filed as Exhibit 4.4 to the Company's Form
8-K dated October 25, 2002.
ARTICLE III
AUTHORIZATION AND TERMS
Section 3.1 Creation of the Notes. There is hereby created a new series
of Securities to be issued under the Base Indenture and this First Supplemental
Indenture designated as "Renewable Unsecured Subordinated Notes" (the "Notes").
The Notes shall constitute a single series of Securities under the Indenture.
The Company may, in its sole discretion, issue Notes in uncertificated form
pursuant to the provisions of Delaware Statutes Section 8-101, et seq., or any
amendment or successor statute thereto. In accordance with Section 3.01 of the
Base Indenture, the Notes shall have the terms set forth in this Article III.
Section 3.2 Aggregate Principal Amount. The limit upon the aggregate
principal amount of the Notes which may be authenticated and delivered under the
Indenture is $150 million (except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other securities
of the series pursuant to Section 3.04, 3.05, 3.06, 8.06 or 10.07 of the Base
Indenture).
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Section 3.3 Denominations; Term; Lack of Security and Subordination.
(a) Denominations. Each Note shall be in such denominations as
may be designated from time to time by the Company, but in no event in
an original denomination less than $1,000. Separate purchases may not
be cumulated to satisfy the minimum denomination requirements.
(b) Term. Each Note shall have a term of not less than three
(3) months and not greater than one-hundred twenty (120) months as
shall be designated by the Holder at the time of purchase in accordance
with the Prospectus, subject to the Company's acceptance thereof.
(c) Lack of Security, Subordination. The Notes are unsecured
obligations of the Company and shall be subordinate in right of payment
to the Senior Indebtedness as provided in Article XII of the Base
Indenture; provided, however, that the definition of Senior
Indebtedness is amended to include any indebtedness of the Company owed
to Special Purpose Entities.
Section 3.4 Interest and Interest Payments; Maturity.
(a) Interest and Interest Payments. Each Note shall bear
interest from and commencing on its Issue Date at such rate of interest
as the Company shall determine from time to time, which rate may vary
from Holder to Holder depending upon the aggregate principal amount of
Notes held by such Holder and any immediate family member, as set forth
in the Prospectus; provided, however, that the interest rate of each
Note will be fixed for the term of such Note upon issuance, subject to
change upon the renewal of the Note at maturity. Interest on the Notes
will compound daily based on the actual number of days in the calendar
year (i.e., 365 or 366) and the Holder thereof may elect to have
interest paid monthly, quarterly, semi-annually, annually, or upon
maturity, which payments shall be made on the Payment Date, except that
a Holder who elects monthly payments may select the day of the month on
which to receive interest payments; provided that no interest shall be
paid to a Holder until the expiration of the Holder's rescission right
under Section 3.5(b) and, if the monthly interest payment date selected
by the Holder is within five (5) Business Days of the Issue Date of the
Note, the first interest payment will be made in the following month
and will include all of the interest earned since the Issue Date. If
the Holder does not elect an interest payment option, interest will be
paid on the Maturity Date of the Note. A Holder may change this
election once during the term of the Note, subject to the Company's
approval, which change shall be effective the first Business Day
following the forty-fifth (45th) day after receipt by the Company of
written notice from the Holder requesting such change.
(b) Repayment Election at Maturity. The Company will send each
Holder of a Note (existing as of the applicable Maturity Record Date) a
Notice of Maturity approximately fifteen (15) but not less than ten
(10) days prior to the Maturity Date of the Note held by such Holder
reminding such Holder of the pending maturity of the Note and reminding
the Holder that the automatic renewal provision described in Section
3.4(c) will take effect, unless (i) the Company states in the Notice of
Maturity that it will not
6
allow the Holder to renew the Note (in which case the Company shall pay
the Holder principal and accrued interest with regard to the Note on
the Maturity Date), or (ii) the Holder delivers a Repayment Election to
the Company for the payment of all principal and interest due on the
Note as of the Maturity Date so that such Repayment Election is
received by the Company on or prior to the fifteenth (15th) day after
the Maturity Date. Such Notice of Maturity shall also state that
payment of principal of a Note shall be made upon presentation of a
Repayment Election requiring payment of such Note and shall specify the
place where such Repayment Election may be presented.
The Notice of Maturity also shall state that the Holder may,
and the Holder may, submit a Repayment Election for the repayment of
the maturing Note and use all or a portion of the proceeds thereof to
purchase a new Note with a different term. To exercise this option, the
Holder shall complete a new Subscription Agreement for the new Note and
send it along with the Holder's Repayment Election to the Company. The
Issue Date of the new Note shall be the Maturity Date of the maturing
Note. Any proceeds from the maturing Note that are not applied to the
purchase of the new Note shall be sent to the Holder of such maturing
Note.
If a Note pays interest only on the Maturity Date, then the
Notice of Maturity also shall state that the Holder may, and the Holder
may, submit an "interest-only" Repayment Election in which the Holder
requires the payment of the accrued interest that such Holder has
earned on the maturing Note up to the Maturity Date and allows the
principal amount of such maturing Note to renew in the manner provided
in subsection (c) below.
If a Repayment Election is received by the Company on or prior
to the fifteenth (15th) day after the Maturity Date, no interest will
accrue after the Maturity Date and the Holder will be sent payment for
the outstanding principal amount plus any accrued and unpaid interest
thereon upon the later of the Maturity Date or five (5) days following
the date the Company receives such Repayment Election from the Holder;
provided that if, prior to such final payment, the Company has paid
interest to the Holder for periods after the Maturity Date, such
interest shall be deducted from the final payment amount.
(c) Automatic Renewal. If a Holder of such Note has not
delivered a Repayment Election for repayment of the Note on or prior to
the fifteenth (15th) day after the Maturity Date, and the Company did
not notify the Holder of its intention to repay the Note in the Notice
of Maturity, then such maturing Note shall be extended automatically
for an additional term equal to the original term, and shall be deemed
to be renewed by the Holder and the Company as of the Maturity Date of
such maturing Note. A maturing Note will continue to renew as described
herein absent a Redemption Notice or Repurchase Request by the Holder
or an indication by the Company that it will repay and not allow the
Note to be renewed in any Notice of Maturity. Interest on the renewed
Note shall accrue from the Issue Date thereof, which is the first day
of such renewed term (i.e., the Maturity Date of the maturing Note).
Such renewed Note will be deemed to have the identical terms and
provisions of the maturing Note, including provisions relating to
payment, except that the interest rate payable during the term of the
renewed Note shall be the interest rate which is being offered by the
Company on other Notes
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having the same term as of the date of such renewal. If other Notes
having the same term are not then being issued on the date of such
renewal, the interest rate upon renewal will be the rate specified by
the Company on or before the Maturity Date of such Note, or the then
existing rate of the Note being renewed if no such rate is specified.
If the maturing Note pays interest only on the Maturity Date, then,
except as provided in subsection (b) above, all accrued interest
thereon shall be added to the principal amount of the renewed Note upon
renewal.
(d) Redemption Notice from Company. Pursuant to Section 3.14,
each Note shall be redeemable by the Company at any time, without
penalty, upon the delivery of a Redemption Notice to the Holder of such
Note with a copy to the Trustee and the Registrar. Such Redemption
Notice shall set forth a date for the redemption of such Note (the
"Redemption Date") that is at least thirty (30) days after the date
that such Redemption Notice has been sent by the Company to the Holder
hereunder.
(e) Repurchase Request by Holder. Pursuant to and subject to
the limitations set forth in Section 3.15, each Note shall be subject
to repurchase at the request of the Holder upon the delivery of a
Repurchase Request to the Company. Subject to the limitations on
repurchase and the Repurchase Penalties described in Section 3.15, the
payment of interest and principal due upon the repurchase of a Note
shall be made to the Holder on a Repurchase Date that is within ten
(10) days of the delivery of such Repurchase Request to the Company or,
in the case of a repurchase of a Note in connection with the death or
Total Permanent Disability of a Holder, a Repurchase Date that is
within ten (10) days after the Company's receipt of satisfactory
establishment of such Holder's death or Total Permanent Disability.
Section 3.5 Valid Issuance; Rejection; Rescission.
(a) Except with respect to an automatically renewed Note
pursuant to Section 3.4(c), a Note shall not be validly issued to a
Person until the following have occurred: (i) such Person has remitted
good and available funds for the full principal amount of such Note to
the Company and such Person's funds have been accepted by the Company
and (ii) an Account is established by the Registrar in the name of such
Person as the Holder of such Note pursuant to Section 3.12 hereof. The
Company, in its sole discretion, may reject any subscription from a
Person for the purchase of Notes, in which event any funds received
from such Person pursuant to such subscription shall be promptly
returned to such Person. No interest shall be paid on any funds
returned on a rejected subscription.
(b) For a period of five (5) Business Days following the
mailing by the Company of a Written Confirmation that evidences the
valid issuance of a Note at the time of original purchase (but not upon
transfer or automatic renewal of a Note), such Holder shall have the
right to rescind the Note and receive repayment of the principal by
providing a written request for such rescission to the Company. Such
written request for rescission (i) if personally delivered or delivered
via facsimile or electronic transmission, must be received by the
Company on or prior to the fifth (5th) Business Day following the
mailing of such Written Confirmation by the Company or (ii) if mailed
must be
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postmarked on or before the fifth (5th) Business Day following the
mailing by the Company of such Written Confirmation. Repayment of the
principal shall be made within ten (10) days of the Company's receipt
of such request from the Holder. No interest shall be paid on any such
rescinded Note.
Section 3.6 Registrar and Paying Agent; Transfer and Exchange.
(a) Section 3.05 of the Base Indenture is hereby amended by
deleting the following sentence from such Section 3.05 in its entirety:
"The Trustee is hereby appointed 'Registrar' for the
purpose of registering Registered Securities and
transfers of Registered Securities as herein
provided."
(b) Initial Registrar and Paying Agent. In accordance with
Section 9.02 of the Base Indenture, the Company shall maintain (i) an
office or agency where Notes may be presented for registration of
transfer or for exchange ("Registrar") and (ii) an office or agency
where Notes may be presented for payment. The Registrar shall keep a
register of the Notes and a register of their transfer and exchange,
which shall include the name, address for notices and Payment Account
of the Holder and the payment election information, principal amount,
term and interest rate for each Note (the "Notes Register"). The
Company appoints ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Ltd as the initial Registrar and
U.S. Bank National Association as the initial Paying Agent, each to act
in such capacity until such time as the Company gives the Trustee
written notice to the contrary. The Company initially appoints the
Trustee as Agent for service of notices and demands in connection with
the Notes. Nothing in this Section 3.6(b) shall prohibit the Company
from acting as Paying Agent or Registrar.
(c) Transfer and Exchange.
(i) The Notes are not negotiable instruments and
cannot be transferred without the prior written consent of the
Company (which consent shall not be unreasonably withheld).
Requests to the Registrar for the transfer of any Account
maintained for the benefit of a Holder shall be:
(1) made to the Registrar in writing on a
form supplied by the Registrar;
(2) duly executed by the Holder of the
related Account, as reflected on the Notes Register
as of the date of receipt of such transfer request,
or such Holder's attorney duly authorized in writing;
(3) accompanied by the written consent of
the Company to the transfer (which consent may not be
unreasonably withheld); and
(4) if requested by the Registrar, an
opinion of Holder's counsel (which counsel shall be
reasonably acceptable to the Registrar)
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that the transfer does not violate any applicable
securities laws and/or a signature guarantee.
(ii) Upon transfer of a Note, the Company, or the
Registrar on behalf of the Company, will provide the new
registered owner of the Note with a Written Confirmation which
will evidence the transfer of the Account in the Notes
Register.
(iii) The Company or the Registrar may assess
reasonable service charges to a Holder for any registration or
transfer or exchange, and the Company may require payment of a
sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other
than any such transfer taxes or similar governmental charge
payable upon exchange pursuant to Sections 3.04, 8.06 or 10.07
of the Base Indenture).
(iv) With respect to the relevant Regular Record
Date, the Company shall treat the individual or entity listed
on each Account maintained by the Registrar as the absolute
owner of the Note represented thereby for purposes of
receiving payments thereon and for all other purposes
whatsoever.
Section 3.7 Payment of Principal and Interest; Principal and Interest
Rights Preserved.
(a) Each Note shall accrue interest at the rate specified for
such Note in the Notes Register and such interest shall be payable on
each Payment Date following the Issue Date for such Note, until the
principal thereof becomes due and payable. Any installment of interest
payable on a Note that is caused to be punctually paid or duly provided
for by the Company on the applicable Payment Date shall be paid to the
Holder in whose name such Note is registered in the Notes Register on
the applicable Regular Record Date with respect to the Notes
outstanding, by electronic deposit to such Holder's Payment Account as
it appears in the Notes Register on such Regular Record Date. Any
interest payable with respect to such Note on a Maturity Date shall be
payable as provided below. In the event any payments made by electronic
deposit are not accepted into the Holder's Payment Account for any
reason, such funds shall be held in accordance with the Paying Agent
Agreement and Section 9.03 of the Base Indenture. Any installment of
interest not punctually paid or duly provided for shall be payable in
the manner and to the Holders as specified in Section 3.10 hereof.
(b) Each of the Notes shall have stated maturities of
principal as shall be indicated on such Notes or in the Written
Confirmation and as set forth in the Notes Register. The principal of
each Note shall be paid in full as of the Maturity Date thereof
pursuant to Section 3.4(b), unless the term of such Note is renewed
pursuant to Section 3.4(c) hereof or such Note becomes due and payable
at an earlier date by acceleration, redemption, repurchase or
otherwise. Interest on each Note shall be due and payable on each
Payment Date at the interest rate applicable to such Note for the
Interest Accrual Period related to such Note and such Payment Date.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Notes, if the Notes have
become or been declared due and payable following an Event of Default,
10
then payments of principal of and interest on the Notes shall be made
in accordance with Article V of the Base Indenture. If definitive,
certificated securities are issued, then the principal payment made on
any Note on any Maturity Date (or the Redemption Price or the
Repurchase Price of any Note required to be redeemed or repurchased,
respectively), and any accrued interest thereon, shall be payable on or
after the Maturity Date, Redemption Date or the Repurchase Date
therefore at the office or agency of the Company maintained by it for
such purpose pursuant to Section 3.6 hereof or at the office of any
Paying Agent for such Note.
Section 3.8 Outstanding Notes.
(a) The Notes outstanding at any time are the outstanding
principal balances of all Accounts representing the Notes maintained by
the Company or such other entity as the Company designated as
Registrar.
(b) If the principal amount of any Note is considered paid
under Section 3.4(b) hereof, it ceases to be outstanding and interest
on it ceases to accrue.
(c) Subject to Section 3.9 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds
the Note.
Section 3.9 Treasury Securities. 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 or any Affiliate of the Company shall be
considered as though not outstanding, except that for purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes that a Responsible Officer of the Trustee actually knows
to be so owned shall be so disregarded.
Section 3.10 Defaulted Interest. If the Company defaults in a payment
of interest on any Note, it shall pay the defaulted interest plus, to the extent
lawful, any interest payable on the defaulted interest, to the Holder of such
Note on a subsequent special Payment Date, which date shall be at the earliest
practicable date, but in all events within thirty (30) days following the
scheduled Payment Date of the defaulted interest, in each case at the rate
provided in the Note. The Regular Record Date for the scheduled Payment Date
shall be the record date for the special Payment Date. Prior to any such special
Payment Date, the Company (or the Trustee, in the name of and at the expense of
the Company) shall mail to Holder(s) a notice that states the special Payment
Date and the amount of such interest to be paid.
Section 3.11 Execution, Authentication And Delivery. Notwithstanding
Section 3.03 of the Base Indenture, in connection with the issuance of each Note
in book-entry form pursuant to Section 3.12 hereof, each Note shall be deemed to
be executed and attested to by the Company and authenticated and delivered by
the Trustee upon the delivery by the Company to the Holder of such Note of a
Written Confirmation, with a copy of such Written Confirmation delivered to the
Trustee, and the establishment by the Registrar of an Account for such Note in
the name of the Holder pursuant to Section 3.12 hereof.
11
Section 3.12 Book-Entry Registration.
(a) Except as provided in subsection (c) below, no Note shall
be issued as, or evidenced by, a promissory note or certificated
security, but rather each Note shall be issued in book entry or
uncertificated form, in which the record of beneficial ownership of
each such Note shall be established and maintained as Accounts by the
Registrar as set forth in this Section 3.12. All references in the Base
Indenture to a Registered Security shall be deemed to include a Note
for purposes of this First Supplemental Indenture, except as the
context otherwise requires. In connection with the issuance of each
Note in book entry form, each such Note shall be deemed to be
represented in an uncertificated form that includes the same terms and
provisions as those set forth in the form of Note in Exhibit A to this
First Supplemental Indenture, and the related Account for each such
Note shall be deemed to include these same terms and provisions.
(b) The Registrar shall maintain a book-entry registration and
transfer system through the establishment and maintenance of Accounts
for the benefit of Holders of Notes as the sole method of recording the
ownership and transfer of ownership interests in such Notes. The
registered owners of the Accounts established by the Registrar in
connection with the purchase or transfer of the Notes shall be deemed
to be the Holders of the Notes outstanding for all purposes under this
First Supplemental Indenture. The Company shall promptly notify the
Registrar of the acceptance of a subscriber's order to purchase a Note
by providing a copy of the accepted Subscription Agreement and the
related Written Confirmation, and upon receipt of such notices, the
Registrar shall establish an Account for such Note by recording a
credit to its book-entry registration and transfer system to the
Account of the related Holder of such Note for the principal amount of
such Note owned by such Holder, with a copy being delivered to the
Trustee, on behalf of the Company. The Registrar shall make appropriate
credit and debit entries within each Account to record all of the
applicable actions under this First Supplemental Indenture that relate
to the ownership of the related Note and issue Written Confirmations to
the related Holders as set forth herein, with copies being delivered to
the Trustee, on behalf of the Company. For example, the total amount of
any principal and/or interest due and payable to the Holders of the
Accounts maintained by the Registrar as provided in this First
Supplemental Indenture shall be credited to such Accounts by the
Registrar within the time frames provided in this First Supplemental
Indenture, and the amount of any payments of principal and/or interest
distributed to the Holders of the Accounts as provided in this First
Supplemental Indenture shall be debited to such Accounts by the
Registrar. The Trustee shall review the book-entry registration and
transfer system as it deems necessary to ensure the Registrar's
compliance with the terms of the First Supplemental Indenture.
(c) Book-entry Accounts evidencing ownership of the Notes
shall be exchangeable for definitive or certificated forms of Notes in
denominations of $1,000 and any amount in excess thereof and fully
registered in the names as each Holder directs only if (i) the Company
at its option advises the Trustee and the Registrar in writing of its
election to terminate the book-entry system, or (ii) after the
occurrence of any Event of Default, Holders of a majority of the
aggregate outstanding principal amount of the Notes (as determined
based upon the latest statement provided to the Trustee pursuant to
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Section 6.13 of the Base Indenture) advise the Trustee in writing that
the continuation of the book-entry system is no longer in the best
interests of such Holders and the Trustee notifies all Holders of the
Notes, of such event and the availability of certificated forms of
securities to the Holders of Notes.
Section 3.13 Initial and Periodic Statements.
(a) Subject to the rejection of a Subscription Agreement
pursuant to Section 3.5(a), the Company shall send Written
Confirmations to initial purchasers, registered owners, registered
pledgees, former registered owners and former pledgees, within one (1)
Business Day of its receipt of proper notice regarding the purchase,
transfer or pledge of a Note, with copies of such Written Confirmations
being delivered to the Trustee and the Registrar.
(b) The Registrar shall send each Holder of a Note (and each
registered pledgee) via U.S. mail not later than fifteen (15) Business
Days after each quarter end in which such Holder had an outstanding
balance in such Holder's Account, a statement which indicates as of the
quarter end preceding the mailing: (i) the balance of such Account;
(ii) interest credited to such Account for the period; (iii)
repayments, redemptions or repurchases of Notes held in such Account,
if any, during the period; and (iv) the interest rates paid on the
Notes in such Account during the period. The Registrar shall provide
additional statements as the Holders or registered pledgees of the
Notes may reasonably request from time to time. The Registrar may
charge such Holders or pledgees requesting such statements a fee to
cover the charges incurred by the Registrar in providing such
additional statements.
Section 3.14 Redemption of Notes at the Company's Election.
(a) The Company may, by resolution of its Board of Directors,
redeem, in whole or in part, any Note prior to the scheduled Maturity
Date of the Note by providing pursuant to Section 3.4(d) a Redemption
Notice to the Holder thereof listed on the records maintained by the
Registrar, which notice shall include the Redemption Date and the
Redemption Price to be paid to the Holder on the Redemption Date. No
interest shall accrue on a Note to be redeemed under this Section 3.14
for any period of time after the Redemption Date for such Note,
provided that the Company or the Paying Agent has timely tendered the
Redemption Price to the Holder.
(b) Section 10.02 of the Base Indenture is hereby deleted in
its entirety.
(c) The Company shall have no mandatory redemption or sinking
fund obligations with respect to any of the Notes.
Section 3.15 Repurchase of Notes at the Holder's Request.
(a) Repurchase Upon Death or Disability. Subject to
subsections (c) and (d) below, in the event of the death or Total
Permanent Disability of a Holder who is a natural person (including
Notes held in an individual retirement account), the estate of such
Holder (in the event of death) or such Holder (in the event of Total
Permanent
13
Disability) may request that the Company repurchase, in whole and not
in part, without penalty, the Note held by such Holder, by delivering
to the Company a Repurchase Request; provided that such Repurchase
Request must be received by the Company within forty-five (45) days of
the date of such death or Total Permanent Disability. If a Note is held
jointly by natural persons who are legally married, when either
registered Holder of such Note dies or becomes subject to a Total
Permanent Disability, the surviving Holder or the disabled Holder, as
the case may be, may request that the Company repurchase in whole and
not in part, without penalty, such Note as jointly held by the Holders
by delivering to the Company a Repurchase Request. In the event a Note
is held jointly by two or more natural persons that are not legally
married, neither of these persons shall have the right to request that
the Company repurchase such Note unless all joint holders of such Note
have either died or suffered a Total Permanent Disability. If the Note
is held by a Holder who is not a natural person, such as a trust,
partnership, corporation or other similar entity, the right to request
repurchase upon death or disability does not apply.
(b) Repurchase Upon Holder's Election. Subject to subsections
(c) and (d) below, a Holder may request the Company to repurchase, in
whole and not in part, the Note held by such Holder by delivering a
Repurchase Request to the Company; provided that an early Repurchase
Penalty will be deducted from the payment of such Holder's Repurchase
Price on the Repurchase Date, unless the Repurchase Request is given
pursuant to paragraph (a) above. If a repurchase is requested pursuant
to this subsection (b), then the early repurchase penalty (the
"Repurchase Penalty") shall equal the following: (i) with respect to a
Note with a three (3) month maturity, the interest accrued on a simple
interest basis on such Note from the Issue Date to the Repurchase Date
at the existing interest rate thereof, but not to exceed three (3)
months of simple interest on such Note, or (ii) with respect to a Note
with a maturity of six (6) months or longer, the interest accrued on a
simple interest basis on such Note from the Issue Date to the
Repurchase Date at the existing interest rate thereof, but not to
exceed six (6) months of simple interest on such Note.
(c) Limitation on Repurchases. The Company will be required to
repurchase Notes for which Repurchase Requests have been received
pursuant to paragraphs (a) and (b) above, except to the extent that the
aggregate Repurchase Price for all Notes for which Repurchase Requests
are then outstanding in any calendar quarter would exceed the lesser of
(i) two percent (2%) of the aggregate outstanding principal balance of
all Notes as of the last day of the previous calendar quarter or (ii)
$1 million. For the purposes of applying such limits on the aggregate
Repurchase Price for outstanding Repurchase Requests, such outstanding
Repurchase Requests will be honored in the order of the date received
or, in the case of Repurchase Requests made in connection with a
Holder's death or Total Permanent Disability, the later of the date
received or the date such death or Total Permanent Disability is
established to the reasonable satisfaction of the Company, and any
Repurchase Request not paid in the quarter received or so established
due to such limitations will be honored in the subsequent quarter, to
the extent possible, subject to the applicability of such limits on
aggregate Repurchase Requests in each subsequent quarter.
14
(d) Repurchase Date. If a Note for which a Repurchase Request
has been received during the then current calendar quarter is
determined not to be subject to the limitation in subsection (c) above
and thus, will be repurchased during the current quarter, then the
Company shall designate a date for the repurchase of such Note (the
"Repurchase Date"), which date shall not be more than ten (10) days
after the Company's receipt of the Repurchase Request or, in the case
of a Repurchase Request following the death or Total Permanent
Disability of a Holder, ten (10) days after the Company's receipt of
satisfactory establishment of such Holder's death or Total Permanent
Disability. On the Repurchase Date, the Company shall pay the
Repurchase Price to the Holder (or the estate of the Holder, in the
case of a request following death) in accordance with Section 3.7. With
respect to a Note for which a Repurchase Request has been received
during a prior calendar quarter and for which the Repurchase Price was
not paid during such prior calendar quarter, but the Note is still
outstanding in the current calendar quarter (because of the limitations
in subsection (c) above), the Company shall designate a Repurchase Date
not later than the tenth (10th) day after the start of such calendar
quarter, unless the Company has an obligation to repurchase Notes in
excess of the limitations in subsection (c) and having priority over
the Note as provided therein, in which case such obligation shall be
met not later than the tenth (10th) day after the start of the next
calendar quarter during which such limitations are no longer applicable
to such Notes. No interest shall accrue on a Note to be repurchased
under this Section 3.15 for any period of time on or after the
Repurchase Date for such Note, provided that the Company or the Paying
Agent has timely tendered the Repurchase Price to the Holder or the
estate of the Holder, as the case may be.
(e) Waiver and Modification of Repurchase Policies. The
Company may waive or reduce any early Repurchase Penalty in its sole
discretion and may modify at any time its policy on the repurchase of
Notes at the request of Holders; provided that no such modification
shall adversely affect the rights of Holders to the repurchase of Notes
for which Repurchase Requests are then outstanding.
Section 3.16 Defaults.
(a) Section 5.01(2) of the Base Indenture is hereby amended in
its entirety to read as follows:
"(2) the Company defaults in the payment of the
principal of or any premium on any Security of that
series when the same becomes due and payable at its
Maturity or on redemption or otherwise and such
default continues for a period of 10 days;"
(b) Sections 5.01(3), 5.02 and 5.09(2) of the Base Indenture
are hereby amended by deleting the percentage "25%" and substituting
the words "a majority" in its place.
(c) Section 5.01(4) of the Base Indenture is hereby deleted in
its entirety.
15
Section 3.17 Covenants. Article IX of the Base Indenture is hereby
supplemented by adding the following provisions:
(a) The Company covenants that, so long as any of the Notes
are outstanding, the Company will maintain a positive Consolidated Net
Worth.
(b) The Company covenants that, so long as any of the Notes
are outstanding, it shall not declare or pay any dividends or other
payments of cash or other property to its common or preferred
stockholders (other than any dividend of the Company's capital stock on
a pro rata basis to all stockholders), unless no Default or Event of
Default with respect to the Notes then exists or would exist
immediately following the declaration or payment of such dividend or
other payment; provided however, that the Company may declare and pay
cash dividends if such Default or Event of Default is the result of a
failure to timely pay interest or principal and such failure to timely
pay interest or principal is inadvertent and is cured within ten (10)
calendar days after the Company has received written notice of such
Default or Event of Default from the Paying Agent or the Trustee.
(c) Notwithstanding any provision to the contrary within the
Base Indenture or this First Supplemental Indenture other than Sections
3.17(a) and (b) hereof, the Company shall not be prohibited, restricted
or otherwise limited under this First Supplemental Indenture from
entering into, sponsoring or conducting any Qualified Sales and
Financing Transaction.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Agents. The Company may from time to time engage Agents to
perform any of its obligations and exercise any of its rights and discretion
under the terms of this Indenture. In each such case, the Company will provide
the Trustee with a copy of each agreement under which any such Agent is engaged
and the name, address, telephone number and capacity of the Agent appointed. If
any such Agent shall resign, or such Agent's engagement is terminated by the
Company, subsequent to the Agent's appointment by the Company under this Section
4.1, the Company shall promptly notify the Trustee of such resignation or
termination, along with the name, address, telephone number and capacity of any
successor Agent. Notwithstanding any engagement of an Agent hereunder, the
Company shall remain obligated to fulfill each of its obligations under this
Indenture.
Section 4.2 Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one instrument.
Section 4.3 Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 4.4 Ratification of Base Indenture; First Supplemental
Indenture Controls. As supplemented hereby, the Base Indenture is in all
respects ratified and confirmed, and this First Supplemental Indenture shall be
deemed part of the Base Indenture in the manner and to the
16
extent herein and therein provided. The provisions of this First Supplemental
Indenture shall supersede the provisions of the Base Indenture to the extent the
Base Indenture is inconsistent herewith.
Section 4.5 Severability. In case any provision of this First
Supplemental Indenture, the Notes or the Base Indenture 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 4.6 Governing Law. This First Supplemental Indenture shall be
deemed to be a contract under the laws of the State of
New York, and for all
purposes shall be construed in accordance with the laws of such State, except as
may otherwise be required by mandatory provisions of law.
Section 4.7 Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this First
Supplemental Indenture or the due execution thereof by the Company. The recitals
of fact contained herein shall be taken as the statements solely of the Company,
and the Trustee assumes no responsibility for the correctness thereof.
17
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused to be duly executed,
and their respective corporate seals to be affixed and attested unto, as of the
day and year first written above, this First Supplemental Indenture.
METRIS COMPANIES INC.
By: /s/ ▇▇▇▇▇ ▇. Than
-----------------------------------
Name: ▇▇▇▇▇ ▇. Than
---------------------------------
Title: Senior Vice President, Treasurer
--------------------------------
U.S. BANK NATIONAL ASSOCIATION, a
national banking association, as
Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Assistant Vice President
--------------------------------
18
Exhibit A
FORM OF SECURITIES
THIS RENEWABLE UNSECURED SUBORDINATED NOTE (THE "NOTE") OF
METRIS COMPANIES INC.
(THE "COMPANY") IS ISSUED PURSUANT TO AND SUBJECT TO THE TERMS OF AN INDENTURE
DATED OCTOBER 25, 2002, AS SUPPLEMENTED BY A FIRST SUPPLEMENTAL INDENTURE DATED
OCTOBER 25, 2002, BETWEEN THE COMPANY AND U.S. BANK NATIONAL ASSOCIATION, AS
TRUSTEE (AS SUPPLEMENTED, THE "INDENTURE"). THE INDENTURE, AMONG OTHER
PROVISIONS, CONTAINS REQUIREMENTS FOR THE HOLDER TO TRANSFER THIS NOTE,
INCLUDING THE PRIOR CONSENT OF THE COMPANY TO ANY SUCH TRANSFER.
THE COMPANY MAY REDEEM THIS NOTE, IN WHOLE OR IN PART, IN ACCORDANCE WITH THE
TERMS OF THE INDENTURE.
[OID LEGEND, IF APPLICABLE]
METRIS COMPANIES INC
Incorporated Under the Laws of Delaware
RENEWABLE UNSECURED SUBORDINATED NOTES
Registered No.:______________________ Registered Principal Amount: $___________
Issue Date:__________________________ Interest Rate:___________________________
Term:________________________________ Interest Payment Schedule:_______________
Maturity Date:_______________________ Payment Date (for interest):_____________
Metris Companies Inc., a corporation created under the laws of the
State of Delaware (the "Company," which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ______________________________, or registered assigns, the
principal sum of ____________ Dollars ($________) on the Maturity Date and to
pay accrued and unpaid interest hereon from the Issue Date set forth above, or
from the most recent Payment Date to which interest has been paid or duly
provided for, beginning on the first Payment Date after the Issue Date (the
"Initial Payment Date") and on each subsequent Payment Date thereafter at the
Interest Rate set forth above, until the principal hereof is paid or made
available for payment. Interest shall accrue on the principal amount for the
period from the later of the Issue Date of this Note or the last Payment Date
upon which an interest payment was made until and including the day before the
following Payment Date; provided that no interest shall be paid to the Holder
until the expiration of such Holder's rescission rights under Section 3.5(b) of
the Supplemental Indenture. Initially capitalized terms used but not defined
herein shall have the respective meanings given such terms in the Indenture.
The principal hereof is subject to optional redemption by the Company and
optional repurchase at the request of the Holder, as provided for in, and
limited by, the Indenture, and, subject to renewal as discussed on the reverse
side hereof, if not so redeemed or repurchased,
shall be due and payable in full on the Maturity Date. The principal and
interest so payable and punctually paid or duly provided for on any Payment
Date, except a Maturity Date, as provided in the Indenture, will be paid to the
Person in whose name this Note is registered (the "Holder") at the close of
business on the Regular Record Date for such Payment Date by electronic deposit
to such Holder's Payment Account as it appears in the Notes Register. Payment of
the principal of and interest on this Note on any Maturity Date will be made at
the office of the Paying Agent, or in such other office as may be selected in
accordance with the Indenture, in such currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by or
on behalf of the Trustee referred to on the reverse hereof by manual or
facsimile signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
No recourse shall be had for the payment of the principal or interest
of this Note against any Company incorporator, stockholder, officer, director,
employee or agent by virtue of any statute or by enforcement of any assessment
or otherwise; and any and all liability of incorporators, stockholders,
directors, officers, employees and agents of the Company being released hereby.
IN WITNESS WHEREOF, the Company has caused this Renewable Unsecured
Subordinated Note to be signed in its name by the manual or facsimile signature
of its President and attested to by the manual or facsimile signature of its
Secretary.
Dated:____________________
METRIS COMPANIES INC.
By____________________________________
Name:
Title:
Attest:
________________________________
_______________ Secretary
2
CERTIFICATE OF AUTHENTICATION
This Note is one of the Renewable Unsecured Subordinated Notes,
referred to in the within-mentioned Indenture.
Dated:_________
U.S. Bank National Association, as Trustee
__________________________________________
By________________________________________
Authorized Signature
3
REVERSE SIDE OF NOTE
This Note is one of a duly authorized issue of Renewable Unsecured
Subordinated Notes of the Company designated as its Renewable Unsecured
Subordinated Notes (the "Notes") in the maximum aggregate principal amount of up
to $150,000,000, issued and to be issued under an Indenture, dated as of October
25, 2002, as supplemented by a First Supplemental Indenture dated October 25,
2002, between the Company and U.S. Bank National Association (the "Trustee") (as
supplemented, the "Indenture"). Reference is hereby made to the Indenture and
all indentures supplemental thereto for a statement of the respective rights,
limitation of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders, and for a statement of the terms upon which the Notes
are, and are to be, authenticated and delivered. Capitalized and certain other
terms used herein and not otherwise defined have the meanings set forth in the
Indenture.
The Notes are general unsecured obligations of the Company. The payment
of the principal of and interest on this Note is expressly subordinated, as
provided in the Indenture, to the payment of all Senior Indebtedness and, by the
acceptance of this Note, the Holder hereof agrees, expressly for the benefit of
the present and future holders of Senior Indebtedness, to be bound by the
provisions of the Indenture relating to such subordination and authorizes and
appoints as such Holder's attorney-in-fact the Trustee to take such action on
such Holder's behalf as may be necessary or appropriate to effectuate such
subordination.
The Holder shall have the right to rescind the Note and receive
repayment of the principal by providing a written request for such rescission to
the Company within five (5) Business Days following the mailing by the Company
of a Written Confirmation that evidences the valid issuance of a Note at the
time of original purchase (but not upon transfer or automatic renewal of a
Note). Such written request for rescission (i) if personally delivered or
delivered via facsimile or electronic transmission, must be received by the
Company on or prior to the fifth (5th) Business Day following the mailing of
such Written Confirmation by the Company or (ii) if mailed must be postmarked on
or before the fifth (5th) Business Day following the mailing by the Company of
such Written Confirmation. Repayment of the principal shall be made within ten
(10) days of the Company's receipt of such request from the Holder. No interest
shall be paid on any such rescinded Note.
The Company may, at its option, at any time redeem this Note either in
whole or from time to time in part prior to the Maturity Date by providing at
least thirty (30) days written notice to the Holder. If this Note shall be
redeemed by call for redemption and payment be duly provided therefor as
specified in the Indenture, interest shall cease to accrue on this Note
Subject to limitations on repurchase set forth in Sections 3.15(c) and
(d) of the Supplemental Indenture, a Holder may request the Company to
repurchase, in whole and not in part, the Note held by such Holder by delivering
a Repurchase Request to the Company; provided that an early repurchase Penalty
(the "Repurchase Penalty") will be deducted from the payment of such Holder's
Repurchase Price on the Repurchase Date, unless the Repurchase Request is given
in connection with the death or Total Permanent Disability of the Holder. If a
repurchase is otherwise requested, then the Repurchase Penalty shall equal the
following: (i) with respect to a Note with a three (3) month maturity, the
interest accrued on a simple
4
interest basis on such Note from the Issue Date to the Repurchase Date at the
existing interest rate thereof, but not to exceed three (3) months of simple
interest on such Note, or (ii) with respect to a Note with a maturity of six (6)
months or longer, the interest accrued on a simple interest basis on such Note
from the Issue Date to the Repurchase Date at the existing interest rate
thereof, but not to exceed six (6) months of simple interest on such Note.
This Note may be transferred and exchanged only as provided in the
Indenture. This Note may not be assigned, transferred or otherwise alienated
without the prior written consent of the Company and shall be subject to the
Company's right to demand and receive an opinion of Holder's legal counsel
(which counsel shall be reasonably acceptable to the Company) that the transfer
does not violate any applicable securities laws. The Company may also require a
signature guarantee. The Company's Registrar may assess service charges for any
such registration, transfer or exchange, and the Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Approximately fifteen (15) but not less than ten (10) days prior to the
Maturity Date, the Company will send the Holder a Notice of Maturity to notify
the Holder of the Maturity Date. If in the Notice of Maturity the Company does
not notify the Holder of its intention to repay this Note, and unless on or
prior to the fifteenth (15th) day after the Maturity Date, the Holder has not
delivered a Repayment Election demanding repayment of this Note, this Note shall
be automatically extended for an additional term equal to the term of the
maturing Note and shall be deemed to have been renewed by the Holder and the
Company as of the Maturity Date. This Note will continue to renew as described
herein and in the Indenture absent certain actions permitted under the Indenture
and this Note by either the Holder or the Company. Interest on the renewed Note
shall accrue from the Issue Date thereof, which is the first day of such renewed
term. This renewed Note will be deemed to have identical terms and provisions as
the maturing Note, including provisions relating to payment, except that the
interest rate payable during the term of the renewed Note shall be the interest
rate which is being offered by the Company on other Notes with the same term as
of the date of such renewal. If other Notes with the same term are not then
being issued on the date of such renewal, the interest rate upon renewal will be
the rate specified by the Company on or before the Maturity Date, or the Note's
existing rate if no such rate is specified. If the Company gives notice to the
Holder of the Company's intention to repay the Note at maturity, the Company
shall pay the Holder the principal amount and accrued and unpaid interest
thereon on the Maturity Date, and, provided such payment is timely made, no
interest will accrue after the Maturity Date. Otherwise, if the Holder delivers
a Repayment Election, demanding repayment on or prior to the fifteenth (15th)
day after the Maturity Date, no interest will accrue after the Maturity Date and
the Holder will be sent payment for the outstanding principal amount plus
accrued but unpaid interest upon the later of the Maturity Date or five (5) days
following the date the Company receives such notice from Holder; provided that
if prior to such final payment, the Company paid interest to the Holder for
periods after the Maturity Date, such interest shall be deducted from the final
payment amount.
If an Event of Default shall occur and be continuing, the outstanding
principal of this Note may be declared due and payable in the manner and with
the effect provided in the Indenture. The Company shall pay all costs of
collection, whether or not judicial proceedings are instituted, in the manner
provided in the Indenture. The Indenture provides that such declaration and its
consequences may, in certain events, be waived by the Holders of a majority in
principal amount of the Notes outstanding.
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The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Notes at the time outstanding. The Indenture
also contains provisions permitting the Holders of specified percentages of
aggregate principal amount of the Notes at the time outstanding, on behalf of
the Holders of all of the Notes, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture or amendment or modification hereof or thereof shall alter or
impair the obligation of the Company to pay the principal of and interest on
this Note at the times, place and rate and in the coin or currency herein
prescribed.
In the event of a consolidation or merger of the Company into, or of
the transfer of all or substantially all of its assets to, any Person in
accordance with the Indenture, such Person shall assume payment of the Notes and
the performance of every covenant of the Indenture on the part of the Company,
and in the event of any such transfer, the Company shall be discharged from all
obligations and covenants in respect of the Notes and the Indenture, all as more
fully set forth in the Indenture.
Prior to due presentment of this Note for registration of transfer in
accordance with the provisions of the Indenture, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name this
Note is registered as the owner hereof for all purposes, whether or not this
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
This Note shall be governed by and construed in accordance with the
laws of the State of
New York, without giving effect to the conflict of law
provisions thereof.
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer this
Note)
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Note, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint __________________, as Attorney-in-Fact, to
transfer the within Note on the books kept for registration thereof, with full
power of substitution.
Dated:___________
Signature:_________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the Note)
Social Security
or Other Identifying
Number of Transferee: __________________
Signature Guaranteed:
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