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THE FINOVA GROUP INC.
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7.5% SENIOR SECURED NOTES MATURING 2009
WITH CONTINGENT INTEREST DUE 2016
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INDENTURE
DATED AS OF AUGUST , 2001
THE BANK OF NEW YORK,
TRUSTEE
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TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE......................................................... 1
Section 1.01. Definitions........................................................................................ 1
Section 1.02. Other Definitions.................................................................................. 13
Section 1.03. Incorporation by Reference of Trust Indenture Act.................................................. 13
Section 1.04. Rules of Construction.............................................................................. 14
ARTICLE 2. THE NOTES.......................................................................................... 14
Section 2.01. Form and Dating.................................................................................... 14
Section 2.02. Title and Terms.................................................................................... 16
Section 2.03. Execution and Authentication....................................................................... 17
Section 2.04. Registrar and Paying Agent......................................................................... 17
Section 2.05. Paying Agent to Hold Money in Trust................................................................ 18
Section 2.06. Holder Lists....................................................................................... 18
Section 2.07. Transfer and Exchange.............................................................................. 18
Section 2.08. Replacement Notes.................................................................................. 20
Section 2.09. Outstanding Notes.................................................................................. 20
Section 2.10. Temporary Notes.................................................................................... 21
Section 2.11. Cancellation....................................................................................... 21
Section 2.12. Voting Record Date................................................................................. 21
Section 2.13. Computation of Fixed Interest...................................................................... 21
Section 2.14. CUSIP Number....................................................................................... 21
Section 2.15. Issuance of Additional Securities.................................................................. 22
ARTICLE 3. PREPAYMENT......................................................................................... 22
Section 3.01. Notices to Trustee................................................................................. 22
Section 3.02. Selection of Notes to be Prepaid................................................................... 22
Section 3.03. Notice of Prepayment............................................................................... 23
Section 3.04. Effect of Notice of Prepayment..................................................................... 24
Section 3.05. Deposit of Prepayment Price........................................................................ 24
Section 3.06. Notes Prepaid in Part.............................................................................. 25
Section 3.07. Optional Prepayment................................................................................ 25
ARTICLE 4. COVENANTS.......................................................................................... 25
Section 4.01. Payment of Notes................................................................................... 25
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TABLE OF CONTENTS
Page
Section 4.02. Maintenance of Office or Agency.................................................................... 25
Section 4.03. Reports............................................................................................ 26
Section 4.04. Compliance Certificate............................................................................. 26
Section 4.05. Stay, Extension and Usury Laws..................................................................... 27
Section 4.06. Use of Cash........................................................................................ 27
Section 4.07. Restricted Payments................................................................................ 31
Section 4.08. Incurrence of Indebtedness......................................................................... 32
Section 4.09. Existence.......................................................................................... 32
Section 4.10. Limitations on Issuance of Capital Interests of Subsidiaries....................................... 32
Section 4.11. Dividend and Other Payment Restrictions Affecting Subsidiaries..................................... 32
Section 4.12. Limitation on Affiliate Transactions............................................................... 33
Section 4.13. Amendments to Intercompany Notes and Security Agreement............................................ 34
Section 4.14. Further Instruments and Acts....................................................................... 34
Section 4.15. Payment of Taxes and Other Claims.................................................................. 34
Section 4.16. Maintenance of Insurance........................................................................... 35
Section 4.17. Additional Intercompany Notes Guarantees........................................................... 35
Section 4.18. Fall-Away Provision................................................................................ 35
ARTICLE 5. SUCCESSORS......................................................................................... 36
Section 5.01. Mergers and Consolidation.......................................................................... 36
Section 5.02. Successor Corporation Substituted.................................................................. 36
ARTICLE 6. DEFAULTS AND REMEDIES.............................................................................. 36
Section 6.01. Events of Default.................................................................................. 36
Section 6.02. Acceleration....................................................................................... 39
Section 6.03. Other Remedies..................................................................................... 39
Section 6.04. Waiver of Past Defaults............................................................................ 39
Section 6.05. Control by Majority................................................................................ 40
Section 6.06. Limitation on Suits................................................................................ 40
Section 6.07. Rights of Holders of Notes to Receive Payment...................................................... 41
Section 6.08. Collection Suit.................................................................................... 41
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TABLE OF CONTENTS
Page
Section 6.09. Proofs of Claim.................................................................................... 41
Section 6.10. Priorities......................................................................................... 42
Section 6.11. Restoration of Rights and Remedies................................................................. 43
Section 6.12. Rights and Remedies Cumulative..................................................................... 43
Section 6.13. Delay or Omission Not Waiver....................................................................... 43
Section 6.14. Undertaking for Costs.............................................................................. 43
ARTICLE 7. TRUSTEE............................................................................................ 44
Section 7.01. Duties of Trustee.................................................................................. 44
Section 7.02. Rights of Trustee.................................................................................. 45
Section 7.03. Individual Rights of Trustee....................................................................... 46
Section 7.04. Disclaimer......................................................................................... 46
Section 7.05. Notice of Defaults................................................................................. 46
Section 7.06. Reports by Trustee to Holders of the Notes......................................................... 47
Section 7.07. Compensation and Indemnity......................................................................... 47
Section 7.08. Replacement of Trustee............................................................................. 48
Section 7.09. Successor Trustee by Merger, etc................................................................... 49
Section 7.10. Eligibility; Disqualification...................................................................... 49
Section 7.11. Preferential Collection of Claims against the Company.............................................. 50
ARTICLE 8. [RESERVED]......................................................................................... 50
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER................................................................... 50
Section 9.01. Without Consent of Holders of the Notes............................................................ 50
Section 9.02. With Consent of Holders of Notes................................................................... 51
Section 9.03. Compliance with Trust Indenture Act................................................................ 52
Section 9.04. Revocation and Effect of Consents.................................................................. 52
Section 9.05. Notation on or Exchange of Notes................................................................... 53
Section 9.06. Trustee to Sign Amendments, etc.................................................................... 53
ARTICLE 10. COLLATERAL AND SECURITY............................................................................ 53
Section 10.01. Security Agreements................................................................................ 53
Section 10.02. Recording and Opinions............................................................................. 54
Section 10.03. Release of Collateral.............................................................................. 55
Section 10.04. Certificates of the Company........................................................................ 55
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TABLE OF CONTENTS
Page
Section 10.05. Certificates of the Trustee........................................................................ 56
Section 10.06. Authorization of Actions to Be Taken by the Trustee and the Collateral Trustee Under the Security
Agreements......................................................................................... 56
Section 10.07. Authorization of Receipt of Funds by the Trustee Under the Security Agreements..................... 56
ARTICLE 11. SATISFACTION AND DISCHARGE......................................................................... 57
Section 11.01. Satisfaction and Discharge......................................................................... 57
Section 11.02. Application of Trust Money......................................................................... 58
ARTICLE 12. MISCELLANEOUS...................................................................................... 58
Section 12.01. Trust Indenture Act Controls....................................................................... 58
Section 12.02. Notices............................................................................................ 58
Section 12.03. Communication by Holders of Notes with Other Holders of Notes...................................... 60
Section 12.04. Certificate and Opinion as to Conditions Precedent................................................. 60
Section 12.05. Statements Required in Certificate or Opinion...................................................... 60
Section 12.06. Rules by Trustee and Agents........................................................................ 61
Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders........................... 61
Section 12.08. Governing Law...................................................................................... 61
Section 12.09. No Adverse Interpretation of Other Agreements...................................................... 61
Section 12.10. Successors......................................................................................... 61
Section 12.11. Severability....................................................................................... 61
Section 12.12. Counterpart Originals.............................................................................. 61
Section 12.13. Table of Contents, Headings, etc................................................................... 62
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TABLE OF CONTENTS
Page
EXHIBITS
Exhibit A Form of Note
Exhibit B Collateral Trust Agreement
Exhibit C Pledge Agreement
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section 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)................................................... 2.06
(b)................................................... 12.03
(c)................................................... 12.03
313 (a)................................................... 7.06
(b)(1)................................................ 7.06
(b)(2)................................................ 7.06; 7.07
(c)................................................... 7.06;12.02
(d)................................................... 7.06
314 (a)................................................... 4.04;12.05
(b)................................................... 12.02
(c)(1)................................................ N.A.
(c)(2)................................................ N.A.
(c)(3)................................................ N.A.
(d)...................................................10.03;10.04; 10.05
(e)................................................... 12.05
(f)................................................... N.A.
315 (a)................................................... N.A.
(b)................................................... N.A.
(c)................................................... N.A.
(d)................................................... N.A.
(e)................................................... 6.11
316 (a)(last sentence).................................... N.A.
(a)(1)(A)............................................. N.A.
(a)(1)(B)............................................. N.A.
(a)(2)................................................ N.A.
(b)................................................... N.A.
(c)................................................... 2.12
317 (a)(1)................................................ N.A.
(a)(2)................................................ N.A.
(b)................................................... N.A.
318 (a)................................................... N.A.
(b)................................................... N.A.
(c)................................................... 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture.
i
Indenture, dated as of August , 2001, among The FINOVA Group Inc., a
Delaware corporation (the "Company"), and The Bank of New York, a New York
banking corporation, as Trustee.
WHEREAS, the Company and certain of its subsidiaries filed for
reorganization under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"); and
WHEREAS, the Bankruptcy Court has approved the joint plan of
reorganization of the Company and such subsidiaries (the "Plan"); and
WHEREAS, as part of the Plan, the Company has agreed to issue the
Notes (as defined herein) to certain holders of indebtedness of FINOVA Capital
Corporation, a subsidiary of the Company ("FINOVA Capital"), and holders of the
Trust Originated Preferred Securities issued by FINOVA Finance Trust, a
subsidiary of the Company, in each case outstanding on the date the Plan was
approved by the Bankruptcy Court;
NOW, THEREFORE, the Company and the Trustee agree as follows for the
equal and ratable benefit of the holders of the Company's 7.5% Senior Secured
Notes Maturing 2009 with Contingent Interest due 2016:
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Additional Notes" means 7.5% Senior Secured Notes Maturing 2009 with
Contingent Interest due 2016, issued from time to time under this Indenture
after the Issue Date to resolve disputed claims of unsecured creditors pursuant
to the Plan.
"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, means 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.
"Agent" means any Registrar or Paying Agent.
"Applicable Procedures" means, with respect to any transfer, exchange,
selection or voting of beneficial interests in a Global Note, the rules and
procedures of the Depositary that apply to such transfer and exchange.
1
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Berkadia" means Berkadia LLC and its successors.
"Berkadia Credit Agreement" means that certain Credit Agreement, dated
as of August __, 2001 by and between FINOVA Capital and Berkadia, as such
agreement may be modified, supplemented or amended from time to time.
"Berkadia Interest Payment Date" means each date on which interest
payments are due and payable under the Berkadia Loan.
"Berkadia Loan" means the $6,000,000,000 aggregate principal amount
secured term loan to FINOVA Capital from Berkadia pursuant to the Berkadia
Credit Agreement, and the secured Guarantees thereof by the Company and its
Subsidiaries, as such Indebtedness may be refunded, refinanced, replaced,
renewed or extended in accordance with the terms of this Indenture.
"Berkshire" means Berkshire Hathaway Inc., a Delaware corporation.
"Berkshire Commitment Letter Agreement" means that certain letter
agreement from Berkshire to the Company, dated June 13, 2001 and filed as
Exhibit E to the Plan.
"Board of Directors" means the Board of Directors of the Person or any
authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Interests" means:
(i) in the case of a corporation, corporate stock (whether
designated as common or preferred);
(ii) in the case of an association or other business entity, any
and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(iii) in the case of a partnership, partnership interests
(whether general or limited); and (iv) any other interest or
participation that confers on a Person the right to receive a share of
the profits and losses of, or distributions of assets of, the issuing
Person.
"Cash Equivalents" means (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or issued by any
agency
2
thereof and backed by the full faith and credit of the United States, in
each case maturing within one year or less from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits, bankers
acceptances or overnight bank deposits having maturities of six months or less
from the date of acquisition issued by any of (i) the fifty (50) largest
commercial banks organized under the laws of the United States of America or any
state thereof or (ii) the twenty-five (25) largest commercial banks organized
under the laws of a foreign jurisdiction, in each case as determined by deposits
held by such banks as reported to American Banker magazine, and in all cases
having total assets of at least Twenty Billion Dollars ($20,000,000,000) and
having a short term deposit rating of at least A-1 by Standard & Poor's Ratings
Group or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of short term deposits generally; (c)
commercial paper of an issuer rated at least A1 by Standard & Poor's Ratings
Group or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations with a term of not more than thirty (30) days for underlying
securities of the types described in clause (a) above entered into with any bank
meeting the qualifications specified in clause (b) above; and (e) money market
accounts or funds with or issued by any bank meeting the qualifications
specified in clause (b) above that invests exclusively in investments of the
types described in clauses (a) through (d) above.
"Collateral" means all Property of the Company, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Agreement; provided, however, Collateral shall not include any Property acquired
from capital contributions to the Company, any Proceeds of such Property and any
Property acquired upon the sale, exchange or other disposition of such Property
or Proceeds.
"Collateral Trustee" means the Collateral Trustee named in the
Security Agreements, in its capacity as Collateral Trustee, until a successor
replaces it in accordance with the applicable provisions of this Indenture and
the Security Agreements, and thereafter means the successor.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Trust Agreement" means the Collateral Trust Agreement
dated on or about the date of this Indenture by and among the Trustee, Berkadia,
the Company and the Collateral Trustee thereunder in substantially the form of
Exhibit B hereto, as such agreement may be amended, modified, supplemented or
restated from time to time as permitted pursuant to the terms of such agreement.
"Commission" means the Securities and Exchange Commission.
"Common Interests" means any Capital Interests of any class which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary
3
or involuntary liquidation, dissolution or winding up and which are not subject
to redemptions by the Company.
"Contingent Interest" means the up to $100,000,000 (as such amount may
be reduced to reflect a decrease in the principal amount of Notes Outstanding as
a result of purchases by the Company pursuant to Section 4.06(a)(iii) hereof,
but not prepayments or repayments by the Company in accordance with Section
4.06(a)(v)(A) or Article 3 hereof) of contingent interest on the Notes to be
paid as provided for in Section 4.06(a)(vii) hereof.
"Contingent Interest Maturity Date" means November 15, 2016.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Rating" means the rating, if any, assigned to the Notes by
Moody's or by Standard & Poor's.
"Deemed Restricted Payments" means any declaration or payment of any
dividend, making of a distribution, or purchase, redemption or other acquisition
or retirement for value of any Equity Interests of the Company that would have
been Restricted Payments prior to repayment of the Notes.
"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.
"Definitive Notes" means Notes that are in the form of Exhibit A
attached hereto without the Global Note Legend.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.04 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Effective Date" has the meaning set forth in the Plan.
"Equity Interests" means Capital Interests and all warrants, options
or other rights to acquire Capital Interests (but excluding any debt security
that is convertible into, or exchangeable for, Capital Interests); provided,
however, that for the purposes of this Indenture, the right of the Holders to
receive Contingent Interest shall not constitute Equity Interests of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
4
"Financing Transactions" means loans, operating leases, financing
leases and leveraged leases extended or entered into by the Company or any of
its Subsidiaries in the ordinary course of business which are of the type
carried on the Company's consolidated audited financial statements as assets and
are currently referred to therein as "net investment in financing transactions,"
off-lease assets contained in the caption "other assets," "investments" or "net
assets of discontinued operations", regardless of whether carried at a positive
balance and including amounts written off, written down or reserved for on the
balance sheet.
"First Lien Debt" means the Guarantee by the Company of the Berkadia
Loan.
"Fixed Interest" means the interest payable on the Notes other than
any Contingent Interest.
"Foreclosure Indebtedness" means Indebtedness of any Person either (i)
existing at the time that such Person becomes a Subsidiary of the Company or any
of its Subsidiaries provided that such Person becomes a Subsidiary of the
Company as a result of a pre-existing bona fide obligation to the Company or any
of its Subsidiaries, (ii) assumed in connection with the acquisition of assets
from any such Person provided that such Person had a pre-existing bona fide
obligation to the Company or any of its Subsidiaries and that if the
Indebtedness so assumed was secured, the Company and its Subsidiaries shall not
agree to extend such security interest to any new assets or to any assets of the
Company and its Subsidiaries other than the assets of such Person or (iii)
incurred to refinance any Indebtedness described in (i) or (ii) above, subject
to the same limitations contained in the proviso to the definition of
Refinancing Indebtedness.
"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 on the date of this Indenture.
"General Corporate Purposes" (when used herein) means, until principal
and Fixed Interest on the Notes has been paid in full, general corporate
purposes reasonably appropriate for an entity in the financial condition of the
Company at the time and having as its primary objective the maximization of net
cash flows for the timely payment of its debt obligations, and after such
payment in full of the principal and Fixed Interest on the Notes means, general
corporate purposes without further description; provided, however, that in no
event shall General Corporate Purposes include any acquisitions of businesses
that are not Permitted Acquisitions.
"Global Note Legend" means the legend set forth in Section 2.07(b)
hereof.
5
"Global Notes" means the Global Notes, in the form of Exhibit A hereto
issued in accordance with Sections 2.01 or 2.07 hereof.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"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 of all or any part of any Indebtedness.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
"Impermissible Deemed Restricted Payment" means a Deemed Restricted
Payment that, if made by the Company or any of its Subsidiaries, would (i)
render such entity insolvent, (ii) be a fraudulent conveyance by such entity or
(iii) not be permitted to be made by such entity under applicable law.
"Impermissible Restricted Payment" means a Restricted Payment that, if
made by the Company or any of its Subsidiaries, would render such entity
insolvent, would be a fraudulent conveyance by such entity or would not be
permitted to be made by such entity under applicable law.
"Indebtedness" means, with respect to any Person, at any date of
determination (without duplication): (i) all indebtedness of such Person in
respect of borrowed money, (ii) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (iv) all Indebtedness referred
to in clauses (i) through (iii) hereof of other Persons secured by a Lien on any
asset of such Person whether or not such Indebtedness is assumed by such Person,
(v) all Indebtedness of other Persons guaranteed by such Person and (vi) to the
extent not otherwise included in this definition, obligations under currency
agreements and interest rate agreements; provided, however, that for purposes of
this Indenture, the right of Holders to receive Contingent Interest shall not
constitute Indebtedness of the Company. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date (or, in the
case of a revolving credit or other similar facility, the total amount of funds
outstanding on the date of determination) of all unconditional obligations as
described above and, with respect to contingent obligations, the reasonably
anticipated maximum liability upon the occurrence of the contingency giving rise
to the obligation of the types described above. The accretion of interest with
respect to Indebtedness issued with original issue discount shall not constitute
an incurrence of additional Indebtedness and Indebtedness shall not include any
liability for federal, state, local or other taxes.
6
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds an interest in the
Notes through a Participant.
"Initial Notes" means the 7.5% Senior Secured Notes Maturing 2009 with
Contingent Interest due 2016 issued under this Indenture on the Issue Date
pursuant to the Plan.
"Intercompany Notes" means the promissory notes of FINOVA Capital
issued to the Company in an aggregate principal amount equal to the principal
amount of Notes issued under this Indenture, including any Additional Notes
issued pursuant to the Plan.
"Intercompany Notes Guarantee" means the Guaranty dated on or about
the date of this Indenture made by each of the Intercompany Notes Guarantors in
favor of the Berkadia Loan and the Intercompany Notes and any additional
Guarantee of the Intercompany Notes to be executed by any Subsidiary of the
Company pursuant to Section 4.17 hereof, as such agreement may be amended,
modified, supplemented or restated from time to time as permitted pursuant to
the terms of such agreement.
"Intercompany Notes Guarantors" means each guarantor that guarantees
the Intercompany Notes as of the Issue Date and each other Subsidiary of the
Company that executes a Guarantee of the Intercompany Notes in accordance with
the provisions of this Indenture and the Intercompany Notes, and their
respective successors.
"Intercompany Notes Pledge Agreement" means the Pledge and Security
Agreement dated on or about the date of this Indenture made by each of FINOVA
Capital and the Intercompany Notes Guarantors in favor of the Collateral
Trustee, as such agreement may be amended, modified, supplemented or restated
from time to time as permitted pursuant to the terms of such agreement.
"Interest" means all Fixed Interest and Contingent Interest on the
Notes.
"Issue Date" means , 2001.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal Corporate
Trust Office of the Trustee is located 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 shall be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment 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
7
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).
"Management Agreement" means the Second Amended and Restated
Management Services Agreement, dated as of June 10, 2001, by and among the
Company, Leucadia National Corporation and Leucadia International Corporation,
as such agreement may be modified, amended or supplemented from time to time.
"Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc. (or any successor to
the rating agency business thereof).
"Note Custodian" means the Trustee, when serving as custodian for the
Depositary with respect to the Notes in global form, or any successor entity
thereto.
"Notes" means the Initial Notes and the Additional Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages 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 Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, the Assistant Secretary or any Vice President of such
Person.
"Officer's Certificate" means a certificate signed on behalf of each
Company by an Officer of the Company, who must be the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, that meets the requirements of Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of Section
12.05 hereof. Such counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Outstanding" when used with respect to Notes means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture; except:
(a) Notes previously cancelled and delivered to the Trustee or
delivered to the Trustee for cancellation;
(b) Notes with respect to which payment or prepayment money in the
necessary amount has been previously deposited with the Trustee or any Paying
Agent in
8
trust for the Holders of such Notes, provided that if such Notes are to be
prepaid, notice of such prepayment has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; and
(c) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture.
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 Subsidiary that have not yet been cancelled pursuant to Section
2.11 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 shown on the Trustee's register as
being so owned shall be so disregarded. Notwithstanding the foregoing, Notes
that are to be acquired by the Company or any Subsidiary pursuant to an exchange
offer, tender offer or other agreement shall not be deemed to be owned by such
entity until legal title to such Notes passes to such entity.
"Participant" means a Person who has an account with DTC.
"Permitted Acquisitions" means any acquisition of businesses (a)
acquired by foreclosure or in full or partial satisfaction of a bona fide
obligation to the Company or any of its Subsidiaries existing prior to such
acquisition or (b) related to an existing customer or to a transaction or
property in which the Company or its Subsidiaries has an interest and the entity
to make such acquisition has determined in good faith that such acquisition is
in furtherance of maximizing the ultimate recovery from such entity's asset
portfolio.
"Permitted Indebtedness" means (a) Indebtedness outstanding (or deemed
outstanding under the Plan) on the Effective Date of the Plan including the
Berkadia Loan, the Notes, the Intercompany Notes and the Intercompany Notes
Guarantees; (b) Refinancing Indebtedness; (c) Indebtedness at any time
outstanding of up to $25,000,000, excluding Indebtedness outstanding under
clauses (a), (b), (d), (e) or (f) hereof; provided, however, that availability
under this clause (c) shall be reduced by the aggregate liquidation preference
of any preferred Equity Interests issued to any Person other than the Company or
one of its Subsidiaries in accordance with Section 4.08; (d) Foreclosure
Indebtedness; (e) intercompany Indebtedness between or among the Company and/or
any of its Subsidiaries; and (f) Indebtedness incurred in connection with
securitization transactions or asset-backed financing transactions where the
proceeds of such Indebtedness, less reasonable expenses incurred in connection
with such transactions, are used as provided in Section 4.06 hereof and provided
that, if such Indebtedness is Refinancing Indebtedness, such Indebtedness must
satisfy the requirements set forth in the definition of Refinancing
Indebtedness.
"Permitted Nonrecourse Indebtedness" means Indebtedness of the Company
or its Subsidiaries that is (a) incurred in Financing Transactions in which the
9
Company or its Subsidiary is the lessor of equipment or Property and secured
solely by assignments of leases where the recourse of the payee with respect to
repayment of such Indebtedness is expressly limited to the lessor's interest in
such leases, the rents and other amounts due thereunder and/or the equipment or
Property leased thereunder or proceeds therefrom, or (b) incurred in Financing
Transactions in which the Company or its Subsidiary is the lessee and sublessor
of the same equipment or Property and secured solely by assignments of leases
where the recourse of the payee with respect to repayment of such Indebtedness
is expressly limited to the sublessor's interest in leases, the rents and other
amounts due thereunder and/or the equipment or Property leased thereunder or
proceeds therefrom; provided, however, that the amounts due under the sublease
of the equipment or Property are not less than the amounts due under the lease
for such equipment or Property at any time; provided further, however, that all
proceeds of such Permitted Nonrecourse Indebtedness, less reasonable expenses
incurred in connection with such transaction, are used as provided in Section
4.06 hereof.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
limited liability company or any other entity.
"Plan" means the Third Amended and Restated Joint Plan of
Reorganization in the Chapter 11 cases of the Company and certain of its
Subsidiaries, dated June 13, 2001, as such plan may be amended, modified,
supplemented or restated from time to time.
"Pledge Agreement" means the Pledge and Security Agreement between the
Company and the Collateral Trustee, in substantially the form of Exhibit C
hereto, as such agreement may be amended, modified, supplemented or restated
from time to time as permitted pursuant to the terms of such agreement.
"Principal Maturity Date" means November 15, 2009.
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
included Capital Interests.
"Refinancing Indebtedness" means Indebtedness of the Company or any of
its Subsidiaries that is incurred to refund, refinance, replace, renew, repay or
extend (including pursuant to any defeasance or discharge mechanism)
(collectively, "refinance") any Indebtedness existing on the Effective Date of
the Plan or incurred in compliance with this Indenture (including Indebtedness
of the Company that refinances Indebtedness of any Subsidiary and Indebtedness
of any Subsidiary that refinances Indebtedness of another Subsidiary) including
Indebtedness that refinances Refinancing Indebtedness; provided, however, that
(a) such Refinancing Indebtedness is incurred in an aggregate principal amount
(or if issued with original issue discount, an aggregate accreted value) not
exceeding the then outstanding amount of the Indebtedness being refinanced, plus
a reasonable premium (except that no such premium may be paid with
10
respect to the Berkadia Loan) and reasonable costs and expenses paid or incurred
in connection with such refinancing, plus capitalized interest, fees and
expenses; (b) except with respect to Refinancing Indebtedness incurred to
refinance (i) the Notes, (ii) Foreclosure Indebtedness or (iii) Permitted
Indebtedness not issued under the Plan, such Refinancing Indebtedness (other
than with respect to the Berkadia Loan) shall either (1) not have a Weighted
Average Life to Maturity or maturity date that is earlier than the Indebtedness
being refinanced or (2) be Special Purpose Indebtedness and (c) if the
Indebtedness being refinanced is subordinate to the Notes, then such Refinancing
Indebtedness shall be subordinated to the Notes at least to the same extent, and
if the Indebtedness being refinanced is pari passu with the Notes, then such
Refinancing Indebtedness shall be either pari passu with or subordinated to the
Notes.
"Responsible Officer" when used with respect to the Trustee and/or the
Collateral Trustee, means any officer of the Trustee or the Collateral Trustee,
as applicable, with direct responsibility for the administration of the
Indenture or the Security Agreements 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 Payment" means:
(i) the declaration or payment of any dividend or the making of any
distribution on account of the Company's Equity Interests (other
than dividends or distributions payable in Equity Interests of
the Company); or
(ii) the purchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company other than
redemptions, acquisitions or retirements solely in exchange for
Equity Interests of the Company.
"Securities Act" means the Securities Act of 1933, as amended and the
rules and regulations of the Commission promulgated thereunder.
"Security Agreements" means the Collateral Trust Agreement and the
Pledge Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02(w)(2) of Regulation
S-X, under the Securities Act, as such Regulation is in effect on the Issue
Date.
"Special Purpose Indebtedness" means, with respect to any Person,
Indebtedness or the portion of Indebtedness (A) as to which neither the Company
nor any of its Subsidiaries other than a special purpose Subsidiary incurring
such Indebtedness (1) provides credit support (including any undertaking,
agreement or instrument which would constitute Indebtedness), (2) is directly or
indirectly liable or (3) constitutes the
11
lender and (B) no default with respect to which would permit (upon notice, lapse
of time or both) any holder of any other Indebtedness of such Person (or the
holder of any Indebtedness of the Company or any of its Subsidiaries if they are
not the Person incurring such Indebtedness) to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Standard & Poor's" means Standard & Poor's Ratings Group (or any
successor to the rating agency business thereof).
"Subsidiary" means, with respect to any Person, any other Person of
which more than 50% of the total voting power of Capital Interests entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees of such other Person 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).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa-
77bbbb), as amended, as in effect on the Issue Date; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after the Issue Date, "TIA"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.
"Trustee" means the Person named as Trustee in the preamble hereto
until a successor replaces such Person or another successor in accordance with
this Indenture and, thereafter, means such successor.
"U.S. Subsidiary" means any Subsidiary that is incorporated in a state
in the United States or the District of Columbia or that guarantees or otherwise
becomes an obligor with respect to any Indebtedness of the Company or
Indebtedness of another Guarantor.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) 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, in respect thereof,
by (b) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness;
provided, however, that with respect to any revolving Indebtedness, the
foregoing calculation of Weighted Average Life to Maturity shall be determined
based upon the total available commitments and the required reductions of
commitments in lieu of the outstanding principal amount and the required
payments of principal, respectively.
12
"Wholly Owned Subsidiaries" of any Person means Subsidiaries of such
Person all of the outstanding Capital Interests or other ownership interests of
which (other than directors' qualifying shares or ownership interests of less
than 0.5% in any non-U.S. Subsidiary to comply with local ownership laws) shall
at the time be owned by such Person or by one or more Wholly Owned Subsidiaries
of such Person.
Section 1.02. Other Definitions.
Defined in
Term Section
------------------------------------------------------ -------------------
"Affiliate Transaction"............................... 4.12
"Authentication Order"................................ 2.03
"Bankruptcy Court".................................... Preamble
"Company"............................................. Preamble
"incur"............................................... 4.08
"Contingent Interest Payment Date".................... 2.02
"Covenant Defeasance"................................. 8.03
"Custodian"........................................... 6.01
"DTC"................................................. 2.04
"Event of Default".................................... 6.01
"Intercompany Collateral"............................. 6.01
"Interest Payment Date"............................... 2.02
"Legal Defeasance".................................... 8.02
"Maximum Price"....................................... 4.06
"Paying Agent"........................................ 2.04
"Principal Payment Date".............................. 2.02
"Reference Date"...................................... 2.02
"Registrar"........................................... 2.04
Section 1.03. 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 of a Note;
"Indenture to be qualified" means this Indenture;
"Indenture Trustee" or "institutional Trustee" means the Trustee; and
13
"obligor" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by the Commission rule
under the TIA have the meanings so assigned to them therein.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(A) an accounting term not otherwise defined herein has
the meaning assigned to it in accordance with GAAP;
(B) "or" is not exclusive;
(C) words in the singular include the plural, and in
the plural include the singular;
(D) provisions apply to successive events and
transactions; and
(E) references to sections of or rules under the
Securities Act, the Exchange Act or the TIA shall be deemed
to include substitute, replacement or successor sections or
rules adopted by the Commission from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto, which is hereby
incorporated in and expressly made part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule, custom
or usage. Each Note shall be dated the date of its authentication. The Notes
initially shall be issued 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.
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Global Notes shall be issued in substantially in the form of Exhibit A
attached hereto and shall include the Global Note Legend set forth in Section
2.07(b) hereof and a "Schedule of Exchanges in the Global Note" in customary
form acceptable to the Trustee. Definitive Notes shall be issued in
substantially in the form of Exhibit A attached hereto.
Additional Notes may be issued, authenticated and delivered pursuant
to Section 2.15 hereof.
(b) Global Notes. Global Notes shall be deposited on behalf of the
------------
Holders with the Trustee, at its New York office, as custodian for the
Depositary, and registered in the name of the Depositary or a nominee of the
Depositary. Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and the aggregate principal amount of each Global Note may from time to
time be increased or decreased by endorsements made on such Global Note by the
Trustee and the Depositary or its nominee as hereinafter provided.
(c) Book-Entry Provisions. This Section 2.01(c) shall apply only to
---------------------
Global Notes deposited with the Trustee, as custodian for the Depositary.
Participants and Indirect Participants shall have no rights under this Indenture
with respect to any Global Note held on their behalf by the Depositary or by the
Trustee as the custodian of the Depositary or under such Global Note, and the
Depositary shall be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants or
Indirect Participants, the Applicable Procedures or the operation of customary
practices of the Depositary governing the exercise of the rights of a holder of
a beneficial interest in any Global Note.
(d) Certificated Securities. If at any time the Depositary notifies
-----------------------
the Company that it is unwilling or unable to continue as Depositary or if at
any time the Depositary shall no longer be eligible under this Section 2.01, the
Company shall appoint a successor Depositary. If a successor Depositary is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company's election pursuant to
Section 2.02 that the Notes be represented by Notes in global form shall no
longer be effective and the Company will execute, and the Trustee, upon receipt
of a Company order for the authentication and delivery of definitive Notes, will
authenticate and deliver, Notes in definitive form, in authorized denominations,
in an aggregate principal amount and like terms and tenor equal to the principal
amount of the Global Notes in exchange for such Global Notes.
The Company may at any time and in its sole discretion determine that
Global Notes shall no longer be represented by such Global Notes. In such
event, the
15
Company will execute, and the Trustee, upon receipt of a Company order for the
authentication and delivery of definitive Notes of the same terms and tenor,
will authenticate and deliver Notes in definitive form, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Notes in exchange for such Global Notes.
If specified by the Company pursuant to Section 2.02 with respect to
Global Notes, the Depositary may surrender Global Notes in exchange in whole or
in part for Notes in definitive form and of like terms and tenor on such terms
as are acceptable to the Company and such Depositary. Thereupon, the Company
shall execute, and the Trustee upon receipt of a Company order for the
authentication and delivery of definitive Notes, shall authenticate and deliver,
without service charge to the holders:
(a) to each Person specified by such Depositary a new definitive Note
or Notes of the same tenor, in authorized denominations, in an aggregate
principal amount equal to and in exchange for such Person's beneficial interest
in the Global Note; and
(b) to such Depositary a new Global Note in a denomination equal to
the difference, if any, between the principal amount of the surrendered Global
Note and the aggregate principal amount of the definitive Notes delivered to
holders pursuant to clause (a) above.
(c) Upon the exchange of a Global Note for Notes in definitive form,
such Global Note shall be cancelled by the Trustee or an agent of the Company or
the Trustee. Notes issued in definitive form in exchange for a Global Note
pursuant to this Section 2.01 shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or an
agent of the Company or the Trustee in writing. The Trustee or such agent shall
deliver such Notes to or as directed by the Persons in whose names such Notes
are so registered or to the Depositary.
Section 2.02. Title and Terms.
Subject to and to the extent cash or Cash Equivalents are available
for payment of principal on the Notes in accordance with Section 4.06 hereof,
principal on the Notes shall be payable on each May 15 and November 15,
commencing November 15, 2001 (each a "Principal Payment Date"). Principal and
Fixed Interest on the Notes, to the extent not previously paid in full in cash
in accordance with Section 4.06 hereof, shall be due and payable in cash on the
Principal Maturity Date.
The Notes shall be known and designated as the "7.5% Senior Secured
Notes Maturing 2009 with Contingent Interest due 2016" of the Company. Fixed
Interest on the Notes shall accrue at the rate of 7.5% per annum. Interest
shall be paid in accordance with the provisions of Section 4.06 hereof;
provided, however, that to the extent Fixed Interest is not paid on an Interest
Payment Date, such amount of unpaid
16
Fixed Interest shall accrue interest at the rate of 7.5% per annum until paid
and shall be treated as Fixed Interest for all purposes under this Indenture.
Payments of Fixed Interest shall be applied first to all accrued but previously
unpaid Fixed Interest in the order in which such Fixed Interest accrued. Subject
to and in accordance with the provisions of Section 4.06 hereof, Interest shall
be payable on each May 15 and November 15, commencing November 15, 2001 (each an
"Interest Payment Date"). All obligations with respect to Contingent Interest
shall cease on the Contingent Interest Maturity Date.
Principal and Interest shall be payable to the Holders of record of
the Notes at 5:00 p.m., New York City time, on the fifth Business Day
immediately preceding either a Principal Payment Date or an Interest Payment
Date (each such date, a "Reference Date").
Section 2.03. Execution and Authentication.
An Officer shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal may be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated by the Trustee, the Note shall nevertheless
be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an
Officer ("Authentication Order") directing the Trustee to authenticate the
Notes, authenticate Notes for original issue.
The Trustee may (at the Company's expense) 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 2.04. Registrar and Paying Agent.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (the "Registrar") and
(ii) an office or agency where Notes may be presented for payment (the "Paying
Agent"). The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may appoint one or more co-registrars or one or more
additional paying agents. The term "Registrar" includes any co-registrars and
the term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent or ▇▇▇▇▇▇▇▇▇
▇▇
without notice to any Holder. The Company shall notify the Trustee in writing 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 or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes. The
Company initially appoints the Trustee to act as the Registrar and Paying Agent
with respect to any Definitive Notes.
Section 2.05. Paying Agent to Hold Money in Trust.
Not later than 10:00 a.m. New York City time on each due date of the
principal or Interest on any of the Notes, the Company shall deposit with the
Paying Agent money, in immediately available funds, sufficient to pay such
principal or Interest so becoming due. The Company shall require each Paying
Agent other than the Trustee to agree in writing that the Paying Agent shall
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 shall 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) shall have no
further liability for the money. 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 2.06. 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 five 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 the Holders of Notes and
the Company shall otherwise comply with TIA (S)312(a).
Section 2.07. Transfer and Exchange.
(a) When 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
18
requirements for such transactions are met; provided, however, that any Note
presented or surrendered for 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 transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
The Registrar shall not be required to register the transfer of or
exchange any Note selected for prepayment in whole or in part, except the
portion not being paid of any Note being prepaid in part.
The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the opening of
business 15 days before the day of mailing of a notice of prepayment of Notes
under Section 3.02 hereof and ending at the close of business on the day of
selection, (B) to register the transfer of or to exchange any Note so selected
for prepayment in whole or in part, except the portion not being paid of any
Note being prepaid in part or (C) to register the transfer of or to exchange a
Note between a record date and the next succeeding Interest Payment Date.
No service charge shall be made to any Holder of a Note for any
registration of transfer or exchange (except as otherwise permitted herein), but
the Company 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, 3.06 and 9.05 hereof, which shall be paid by the Company).
Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and 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 and Interest on such Notes and for
all other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.
(b) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
19
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."
(c) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or the Company has repurchased a particular Global Note or a
particular Global Note has been prepaid, repurchased or canceled in whole and
not in part, each such Global Note shall be returned to or retained and canceled
by the Trustee in accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
Section 2.08. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or 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 receipt of
an Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. 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 and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company and the Trustee may
charge for their 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.
20
Section 2.09. Outstanding Notes.
The Notes Outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.09 as not Outstanding. A Note, or portion thereof, does not cease to
be Outstanding because an Affiliate of the Company (other than a Subsidiary)
holds the Note, or such portion thereof. A Note, or any portion thereof, owned
by the Company or any Subsidiary is not outstanding.
If a Note is replaced pursuant to Section 2.08 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.
Section 2.10. Temporary Notes.
Until Definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt of an
Authentication Order. Temporary Notes shall be substantially in the form of
Definitive Notes but may have variations that the Company considers appropriate
for temporary Notes. Without unreasonable delay, the Company shall prepare and
the Trustee shall upon receipt of an Authentication Order authenticate
Definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.11. Cancellation.
The Company at any time shall deliver to the Trustee for cancellation
any Notes previously authenticated and delivered hereunder which the Company or
any Subsidiary may have acquired pursuant to Section 4.06(a)(iii) or Section
4.06(b)(vi)(A)(iii) hereof or otherwise, and all Notes so delivered shall be
promptly cancelled by the Trustee. All Notes surrendered for registration of
transfer, exchange or payment, if surrendered to any Person other than the
Trustee, shall be delivered to the Trustee. The Trustee and no one else shall
cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation. All cancelled Notes held by the Trustee shall be
disposed of by the Trustee in accordance with its customary procedure, unless by
a written order, signed by two Officers of the Company, the Company shall direct
that cancelled Notes be returned to it.
Section 2.12. Voting Record Date.
The record date for purposes of determining the identity of Holders of
the Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA (S)316(c).
21
Section 2.13. Computation of Fixed Interest.
Fixed Interest on the Notes shall be computed on the basis of a 360-
day year comprised of twelve 30-day months.
Section 2.14. 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 prepayment or
exchange as a convenience to Holders; provided, however, 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 shall promptly notify the Trustee of any change in the CUSIP number.
Section 2.15. Issuance of Additional Securities.
The Company shall be entitled to issue Additional Notes under this
Indenture which shall have identical terms as the Initial Notes issued on the
Issue Date, other than with respect to the date of issuance. The Initial Notes
issued on the Issue Date and any Additional Notes shall be treated as a single
class for all purposes under this Indenture.
With respect to any Additional Notes, the Company shall set forth in
an Officer's Certificate, a copy of which shall be delivered to the Trustee, the
following information:
(a) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture; and
(b) the issue date of such Additional Notes.
ARTICLE 3.
PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to prepay the principal of the Notes pursuant to
the optional prepayment provisions of Section 3.07 hereof, it shall furnish to
the Trustee, at least 10 days but not more than 60 days before a prepayment
date, an Officer's Certificate setting forth (i) the clause of this Indenture
pursuant to which the prepayment shall occur, (ii) the prepayment date, (iii)
the principal amount of Notes to be prepaid and (iv) the prepayment price.
22
Section 3.02. Selection of Notes to be Prepaid.
If less than all of the Notes are to be prepaid at any time, the
Trustee shall select the Notes to be prepaid among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed, or, if the Notes are not so listed, on a
pro rata basis, by lot or in accordance with any other method as the Trustee
shall deem fair and appropriate in consultation with the Company. In the event
of partial prepayment by lot, the particular Notes to be prepaid shall be
selected, unless otherwise provided herein, not less than 30 days prior to the
prepayment date by the Trustee from the Outstanding Notes not previously called
for prepayment.
The Trustee shall promptly notify the Company in writing of the Notes
selected for prepayment and, in case of any Note selected for partial
prepayment, the principal amount thereof to be prepaid. 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 prepaid, the entire
Outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be prepaid. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for prepayment also
apply to portions of Notes called for prepayment.
Section 3.03. Notice of Prepayment.
Subject to the provisions of Section 3.07 hereof, at least 10 days but
not more than 60 days before a prepayment date, the Company shall mail or cause
to be mailed by first class mail, a notice of prepayment to each Holder whose
Notes are to be prepaid at its registered address.
The notice shall identify the Notes to be prepaid and shall state:
(A) the prepayment date;
(B) the prepayment price for the Notes
and accrued and unpaid Fixed Interest, if any;
(C) if any Note is being prepaid in
part, the portion of the principal amount of such
Note to be prepaid and that, after the prepayment
date, upon surrender of such Note, a new Note or
Notes in principal amount equal to the portion not
being prepaid shall be issued;
(D) the name and address of the Paying
Agent;
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(E) that Notes called for prepayment
must be surrendered to the Paying Agent to collect
the prepayment price;
(F) that, unless the Company defaults in
making such prepayment, Fixed Interest on Notes
called for prepayment ceases to accrue on and
after the prepayment date;
(G) the paragraph of the Notes and/or
section of this Indenture pursuant to which the
Notes called for prepayment are being prepaid; 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
prepayment in the Company's name and at the Company's expense; provided,
however, that the Company shall have delivered to the Trustee, at least 30 days,
or such shorter period as the Trustee may agree, prior to the prepayment date an
Officer's Certificate and an order directing that the Trustee give such notice
and setting forth the information to be stated in the notice as provided in the
preceding paragraph. The notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the Holder receives
such notice.
Section 3.04. Effect of Notice of Prepayment.
Once notice of prepayment is mailed in accordance with Section 3.03
hereof, Notes called for prepayment become due and payable on the prepayment
date at the prepayment price plus accrued and unpaid Fixed Interest to such
date. A notice of prepayment may not be conditional. Upon surrender of any of
the Notes called for prepayment to the Paying Agent, such Notes shall be paid on
the prepayment date at the prepayment price, plus accrued and unpaid Fixed
Interest to such date.
Section 3.05. Deposit of Prepayment Price.
At or prior to 10:00 a.m., New York City time, on the prepayment date,
the Company shall deposit with the Trustee or with the Paying Agent money, in
immediately available funds, sufficient to pay the prepayment price of and
accrued and unpaid Fixed Interest on all Notes to be prepaid on that date. The
Trustee or the Paying Agent shall promptly return to the Company upon their
written request any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the prepayment price of and
accrued and unpaid Fixed Interest on all Notes to be prepaid.
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All money deposited with the Trustee pursuant to this Section 3.05
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 and interest, but such money need not
be segregated from other funds except to the extent required by law.
If Notes called for prepayment are paid or if the Company has
deposited with the Trustee or Paying Agent money sufficient to pay the
prepayment price of and unpaid and accrued Fixed Interest on all Notes to be
prepaid, on and after the prepayment date Fixed Interest shall cease to accrue
on the Notes or the portions of Notes called for prepayment (regardless of
whether certificates for such securities are actually surrendered); provided,
however, Contingent Interest will continue to accrue on each Note prepaid
pursuant to this Article 3 until such Note is cancelled pursuant to Section 2.11
hereof. If a Note is prepaid on or after an applicable Reference Date but on or
prior to the related Fixed Interest payment date, then any accrued and unpaid
Fixed 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
prepayment shall not be so paid upon surrender for prepayment because of the
failure of the Company to comply with the preceding paragraph, Fixed Interest
shall be paid on the unpaid principal from the prepayment date until such
principal is paid at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06. Notes Prepaid in Part.
Upon surrender of a Note that is prepaid in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unprepaid portion of the Note surrendered.
Section 3.07. Optional Prepayment.
Subject to compliance with the provisions of Section 4.06, the Company
may, at its option, prepay the Notes in whole at any time or in part from time
to time at a prepayment price equal to the principal amount of the Notes or
portion thereof being prepaid (subject to the right of Holders of record on the
relevant Reference Date to receive Fixed Interest due on the related Interest
Payment Date) but without any premium or penalty of any kind, plus accrued and
unpaid Fixed Interest to the prepayment date.
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ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of and
Interest on the Notes on the dates and in the manner provided in Sections 2.02
and 4.06 hereof. An installment of principal and Interest, shall be considered
paid for all purposes hereunder on the date the Paying Agent (if other than the
Company, a Subsidiary of the Company or an Affiliate of either of them) holds,
as of 10:00 a.m. (New York City time) money deposited by the Company in
immediately available funds and designated for and sufficient to pay all such
principal and Interest then due. If the Company, any Subsidiary of the Company
or any Affiliate of any of them acts as Paying Agent, an installment of
principal or Interest shall be considered paid on the due date thereof only if
the entity acting as Paying Agent complies with the penultimate sentence of
Section 2.05.
Section 4.02. 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 or an
affiliate of the Trustee or Registrar) where Notes may be surrendered for
registration of transfer or for exchange or for presentation of payment or
prepayment 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 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
2.04 hereof.
Section 4.03. Reports.
Whether or not required by the rules and regulations of the
Commission, so long as any Notes are Outstanding, the Company will file with the
Commission, to the extent such submissions are accepted for filing by the
Commission, and furnish to the
26
Trustee within 15 days of the time periods specified in the Commission's rules
and regulations for filing reports, (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission 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" and, with respect to the annual information only, a
report on the annual financial statements by the Company's certified independent
accountants; (ii) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such reports and
(iii) as long as the Company is required to file information or reports with the
Commission by Section 13(a) or 15(d) under the Exchange Act, such information or
reports. The Trustee will provide, at the Company's expense, copies of any such
information or reports to any Holder that requests in writing copies of such
information or reports.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only, and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
Section 4.04. Compliance Certificate.
On or before a date not more than 90 days after the end of each fiscal
year of the Company, the Company shall deliver to the Trustee a certificate
signed by the Chief Executive Officer, the Chief Financial Officer or the
treasurer of the Company stating that a review has been conducted of the
Company's performance under this Indenture and that the Company has fulfilled
all obligations hereunder, or, if there has been a Default or an Event of
Default, specifying each such Default and Event of Default and the nature and
the status thereof. The Company shall also notify the Trustee within 30 days of
any such officer having actual knowledge of any Default or Event of Defaults
under this Indenture. The Company shall also comply with TIA (S)314(a).
Section 4.05. Stay, Extension and Usury Laws.
The Company covenants (to the extent 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, (i) that would prohibit or
forgive the Company from paying all or a portion of the principal of or Interest
on the Notes as contemplated herein or (ii) that may otherwise 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.
27
Section 4.06. Use of Cash.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, use cash and Cash Equivalents in a manner prohibited or not
provided for by this Section 4.06. The Company shall and shall cause its
Subsidiaries to apply cash and Cash Equivalents,
(i) FIRST, (A) to pay or to fund their respective
operating expenses, taxes, reasonable reserves (which reserve amounts
shall be determined in good faith by the Company or the Subsidiary
setting such reserves) for revolving commitments, unfunded commitments
and General Corporate Purposes; (B) to pay, when due, interest on and
principal of Permitted Indebtedness of the Company or such Subsidiary
(other than, (x) in the case of FINOVA Capital, the Berkadia Loan and
the Intercompany Notes and (y) in the case of the Company, the Notes),
or to fund a reserve to pay interest on such Permitted Indebtedness
due on the next interest payment date; (C) to pay, when due, interest
on and principal of any Refinancing Indebtedness incurred to refinance
the Permitted Indebtedness that may be paid under clause (B), or to
fund a reserve to pay interest on such Refinancing Indebtedness due on
the next interest payment date; (D) to pay, when due, interest on the
Berkadia Loan, or to fund a reserve to pay interest due during the
current and/or next succeeding fiscal quarter on the Berkadia Loan;
and (E) to make payments permitted under Section 4.07(b) (provided
that any payments described in Section 4.07(b)(v) shall not exceed $1
million per year); provided, however, that the listing of subclauses
(A) through (E) herein shall be for ease of reference only and shall
not imply or require any priority of allocation or payment within this
Section 4.06(a)(i));
(ii) SECOND, to pay to the Company, when due, interest on
the Intercompany Notes in an amount equal to the lesser of (a) the
amount of accrued and unpaid interest to the next interest payment
date under the Intercompany Notes or (b) the amount of cash and Cash
Equivalents of the Company and its Subsidiaries at the applicable
Reference Date (after deducting for item (i) above), or to fund a
reserve to pay accrued and unpaid interest due on such Intercompany
Notes due on the next interest payment date under the Intercompany
Notes, and the Company shall use the proceeds of such payments
together with any other cash or Cash Equivalents the Company has
available for such purpose on such Reference Date, to pay on the
corresponding Interest Payment Date accrued and unpaid Fixed Interest
on the Notes to that Interest Payment Date; provided, however, that
the Company shall not make any payments pursuant to items (iii)
through (vii) below if, as a result of such payment and after giving
consideration to any cash that is expected to be generated from
operations, pending transactions or otherwise, it is not reasonably
foreseeable that the Company will have sufficient cash and Cash
28
Equivalents available to pay all accrued and unpaid Fixed Interest to
the next Interest Payment Date on that Interest Payment Date.
(iii) THIRD, at the option of the Company and with the
consent of Berkadia so long as any payment Obligation under the
Berkadia Loan is outstanding, to cause FINOVA Capital to make
prepayments of principal and accrued and unpaid interest on the
Intercompany Notes or to fund a reserve to make such prepayments
(after deducting for items (i) and (ii) above); the Company shall use
the proceeds from any such prepayments, plus any other cash or Cash
Equivalents the Company has available and elects to use for such
purpose, to purchase (or to cause a Subsidiary or Subsidiaries to
purchase) Notes (including all obligations to pay Contingent Interest
in respect of such Notes) at a purchase price not to exceed the
outstanding principal amount of such Note plus accrued and unpaid
Fixed Interest thereon to the purchase date (the "Maximum Price")
through, at the Company's discretion, (1) tender offers, (2) open
market purchases and (3) privately negotiated transactions; provided,
however, that (A) if no payment Obligation under the Berkadia Loan is
outstanding, such prepayments of the Intercompany Notes and purchases
of Notes shall not exceed $150.0 million in the aggregate in any
single calendar year and (B) in no event will the aggregate amount of
such prepayments or uses of cash or Cash Equivalents exceed
$1,500,000,000 during such time as any payment Obligation under the
Berkadia Loan is outstanding; provided, further, that any such
purchases of Notes by the Company shall be made pursuant to procedures
adopted by the Company's Board of Directors in good faith to ensure
that Berkshire and its Affiliates are not preferred or discriminated
against with respect to such purchases, subject to the commitments of
Berkshire set forth in the Berkshire Commitment Letter Agreement;
(iv) FOURTH, to repay principal of the Berkadia Loan as
required under the Berkadia Credit Agreement (after deducting for
items (i), (ii) and (iii) above);
(v) FIFTH, until the principal of and Fixed Interest on
the Notes are each paid in full, to (A) pay to the Company, when due,
principal on the Intercompany Notes in an amount equal to the amount
of cash and Cash Equivalents of the Company and its Subsidiaries,
after deducting for items (i) through (iv) above, at any date (as
determined by the Company) on or after the applicable Reference Date,
which amounts the Company shall use together with any other cash or
Cash Equivalents the Company has available for such purpose on such
date to repay principal of the Notes until the principal and accrued
and unpaid Fixed Interest have been paid in full, and, at the
Company's option, to make prepayments at any time of principal and
accrued and unpaid interest on the Intercompany Notes, which amounts
the Company shall use together
29
with any other cash or Cash Equivalents the Company has available for
such purpose on such date to prepay all or part of the principal and
accrued and unpaid Fixed Interest on the Notes pursuant to Section
3.07, and (B) to make distributions in respect of FINOVA Capital's
Equity Interests held by the Company, which amounts the Company shall
use together with any other cash the Company has available for such
purposes to make Restricted Payments unless either (x) the making of
any such Restricted Payment would be an Impermissible Restricted
Payment, in which event the Company shall retain such amounts and any
such retained amounts shall accumulate and shall be used to make
Restricted Payments at such time or from time to time when such
Restricted Payments are not Impermissible Restricted Payments, or (y)
a Default or Event of Default has occurred and is continuing, in which
event the Company shall retain such amounts and any such retained
amounts shall accumulate and shall, subject to Article 6 hereof, be
used to make such Restricted Payments at such time or from time to
time when such Default or Event of Default is no longer continuing;
provided, however, that each incremental payment of $0.95 pursuant to
clause (A) shall require a distribution or retention pursuant to
clause (B) of $0.05;
(vi) SIXTH, until an amount equal to 5.263% of the
aggregate principal amount of the Notes issued under this Indenture in
accordance with the Plan (whether on the Issue Date or thereafter) has
been used either to (A) make Restricted Payments to the Company's
holders of Common Stock under Section 4.06(a)(v)(B) or (B) to make
Deemed Restricted Payments, and after deducting for items (i) through
(v) above, to make Deemed Restricted Payments, unless the making of
such Deemed Restricted Payments would be an Impermissible Deemed
Restricted Payment, in which event, for so long as it would be an
Impermissible Deemed Restricted Payment, the Company shall retain all
such amounts as collateral under the Security Agreements or the
Intercompany Notes Pledge Agreement and any such retained amounts
shall accumulate and shall be used to make Deemed Restricted Payments
at such time, or from time to time, as such payments are not
Impermissible Deemed Restricted Payments; provided, however, that no
payments shall be made under this item (vi) until repayment in full of
principal and accrued and unpaid Fixed Interest on the Notes; and
(vii) SEVENTH, until an aggregate of up to $100,000,000 (as
such amount may be reduced to reflect a decrease in the principal
amount of Notes Outstanding as a result of purchases by the Company of
Notes in accordance with Section 4.06(a)(iii) (but not as a result of
prepayments or repayments made by the Company in accordance with
Section 4.06(a)(v)(A) or Article 3 hereof)) has been paid as
Contingent Interest to make distributions on each applicable Interest
30
Payment Date to the Company in an amount equal to cash and Cash
Equivalents of the Company and its Subsidiaries, after deducting for
uses of cash and Cash Equivalents pursuant to clauses (i) through (vi)
above, at any date (as determined by the Company) on or after the
applicable Reference Date (A) 95% of which the Company shall use to
pay Contingent Interest on each applicable Interest Payment Date pro
rata to Holders of Outstanding Notes and (B) 5% of which the Company
will use to make Deemed Restricted Payments on each applicable
Interest Payment Date (unless the making of such Deemed Restricted
Payments would be an Impermissible Deemed Restricted Payment, in which
event, for so long as it would be an Impermissible Deemed Restricted
Payment, the Company shall retain such amounts as collateral under the
Security Agreements or the Intercompany Notes Pledge Agreement, and
any retained amounts shall accumulate and shall be used to make Deemed
Restricted Payments at such time or from time to time as such payments
are not Impermissible Deemed Restricted Payments); provided, further,
however, that the Company shall not be required to pay, nor shall it
be a Default or Event of Default not to pay, Contingent Interest after
the Contingent Interest Maturity Date, other than Contingent Interest
that is due and payable as of the Contingent Interest Payment Date.
(b) Funding and payments in respect of any Refinancing Indebtedness
shall have the same priority in this Section 4.06 as corresponds to the
Indebtedness so refinanced.
(c) The Company shall make contributions to its Subsidiaries and shall
cause its Subsidiaries to make distributions or contributions, as applicable, to
permit the application of cash and Cash Equivalents as set forth in Section
4.06(a); provided, however, that, notwithstanding the foregoing, it shall not be
a default of this Section 4.06 if a Subsidiary does not make distributions to
its parent entity as set forth in Sections 4.06(a)(i)- (vii) above or if
interest or principal payments are not made on the Intercompany Notes as set
forth in Sections 4.06(a)(ii) and (v) above, or if the Company does not make an
interest payment on the Notes as set forth in Section 4.06(a)(ii) above if such
dividends, distributions or payments would be Impermissible Restricted Payments
or Impermissible Deemed Restricted Payments or would be prohibited by or would
result in a default or an event of default under the Berkadia Credit Agreement
as in effect on the Issue Date or as amended from time to time for bona fide
business purposes (it being understood that the purpose of deferring payments on
the Notes is not a bona fide business purpose for amending the Berkadia Credit
Agreement).
(d) The Company and its Subsidiaries shall hold only those cash
equivalents that meet the definition of Cash Equivalents herein. Cash and Cash
Equivalents held by the Company and its Subsidiaries in trust, as bailee or
otherwise for the benefit of Persons other than the Company or its Subsidiaries
shall not be available for application pursuant to Section 4.06.
31
(e) After the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceedings, relating to
the Company, unpaid principal and Interest on the Notes shall continue to
include interest accruing at the rate provided in the Notes, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding.
Section 4.07. Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payments, except
such Restricted Payments that are permitted or required by Section 4.06 or
Section 4.07(b) hereof.
(b) The preceding paragraph will not prohibit:
(i) the repurchase of Capital Interests to eliminate
fractional Capital Interests or odd-lots, whether pursuant to a
reverse stock-split, odd-lot tender offer or otherwise;
(ii) cash payments in lieu of issuance of fractional
Capital Interests in connection with the exercise of any warrants,
rights, options or other securities convertible into or exchangeable
for Equity Interests of the Company;
(iii) the deemed repurchase of the Company's Equity
Interests by the Company on the cashless exercise of stock options, if
such Equity Interests represent a portion of the exercise price
thereof;
(iv) payments or distributions to dissenting holders of
Equity Interests pursuant to applicable law, pursuant to or in
connection with a consolidation, merger or transfer of assets which
such consolidation, merger or transfer or assets complies with the
provisions of this Indenture; or
(v) repurchases, redemptions, acquisitions or retirements
of Equity Interests of the Company from employees, directors or
officers of the Company and its Subsidiaries;
provided that the aggregate of all payments in clauses (i), (ii), (iv)
and (v) above shall not exceed $5.0 million in any calendar year.
Section 4.08. Incurrence of Indebtedness.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness other than Permitted Indebtedness or
Permitted Nonrecourse Indebtedness.
32
Section 4.09. 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
existence and the existence of FINOVA Capital in accordance with their
respective organizational documents (as the same may be amended from time to
time) and (ii) the rights (charter and statutory), licenses and franchises of
the Company and FINOVA Capital.
Section 4.10. Limitations on Issuance of Capital Interests of
Subsidiaries.
The Company shall not permit FINOVA Capital to issue or sell any
Capital Interests (other than to the Company) and shall not permit any of its
other Subsidiaries to issue any preferred Equity Interests to any Person (other
than the Company or a wholly owned Subsidiary of the Company); provided,
however, that such Subsidiaries may issue preferred Equity Interests such that
the liquidation preference of such preferred Equity Interests does not exceed
the amount of Indebtedness that would be permitted to be incurred under Section
4.08 hereof if the liquidation preference of such preferred Equity Interest were
treated as Indebtedness for purposes of Section 4.08.
Section 4.11. Dividend and Other Payment Restrictions Affecting
Subsidiaries
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
restriction on the ability of any Subsidiary to (a) make any Restricted Payment,
(b) make loans or advances to the Company or any of its Subsidiaries or (c)
transfer any of its properties or assets to the Company or any of its
Subsidiaries.
The preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(a) the Notes;
(b) this Indenture;
(c) the Berkadia Loan;
(d) the Intercompany Notes and the Intercompany Notes Guarantees;
(e) the contracts or agreements to which the Company and its
Subsidiaries were parties as of February 26, 2001, and which remain in effect,
restricting special purpose Subsidiaries;
(f) applicable law;
33
(g) Refinancing Indebtedness containing restrictions no more
restrictive, taken as a whole, than those contained in the Indebtedness so
refinanced;
(h) Permitted Indebtedness described in clause (c) or (d) of the
definition of "Permitted Indebtedness;" provided, however, that restrictions
contained therein are no more restrictive, taken as a whole, than those
contained in any Permitted Indebtedness; or
(i) Permitted Nonrecourse Indebtedness incurred by any special purpose
Subsidiary; provided that the restrictions therein apply only to such special
purpose Subsidiary.
Section 4.12. Limitation on Affiliate Transactions.
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, enter into or conduct any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company other than a Subsidiary (an
"Affiliate Transaction") unless the terms of such Affiliate Transaction are no
less favorable to the Company or such Subsidiary, as the case may be, than those
that would be obtained at the time of such transaction in arm's- length dealings
with a Person who is not an Affiliate of the Company.
(b) The provisions of Section 4.12(a) shall not prohibit (i) any
Restricted Payment or Deemed Restricted Payment permitted to be made pursuant to
Sections 4.06 or 4.07, (ii) any issuance of securities, or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans approved by
the Board of Directors of the Company or such Subsidiary, (iii) loans or
advances to employees in the ordinary course of business of the Company or any
of its Subsidiaries, (iv) any transaction between the Company and any Wholly
Owned Subsidiary or between Wholly Owned Subsidiaries, (v) indemnification
agreements with, and the payment of fees and indemnities to, directors, officers
and employees of the Company and its Subsidiaries, in each case in the ordinary
course of business, (vi) transactions contemplated by agreements between the
Company and any Affiliates in existence on the Issue Date or entered into in
accordance with the Plan, including the Management Agreement, the Berkadia
Credit Agreement, the Security Agreements and the security and other agreements
with respect to the Berkadia Credit Agreement, (vii) any employment,
compensation, non-competition, confidentiality, severance or consulting
agreements entered into by the Company or any of its Subsidiaries with its
employees in the ordinary course of business, (viii) payments made in connection
with the consummation of the Plan, and (ix) the issuance of Capital Interests of
the Company.
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Section 4.13. Amendments to Intercompany Notes and Security
Agreement.
Except as otherwise provided in Section 9.02 hereof, the Company shall
not enter into any amendment or supplement to, nor waive compliance with any
provision of, the Intercompany Notes or the Security Agreements, except
amendments, supplements or waivers to cure ambiguities, defects or
inconsistencies, or make changes that do not materially adversely affect the
rights of any Holder of the Notes.
Section 4.14. Further Instruments and Acts.
Upon the request of the Trustee, the Company will execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this Indenture.
Section 4.15. Payment of Taxes and Other Claims.
The Company shall, and shall cause each of its Subsidiaries, to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (i) all material taxes, assessments and governmental charges levied
or imposed upon (a) the Company or any such Subsidiary, (b) the income or
profits of any such Subsidiary which is taxed as a corporation under the Code or
(c) the property of the Company or any such Subsidiary and (ii) all material,
lawful claims for labor, materials and supplies that, if unpaid, might by law
become a Lien upon the property of the Company or any such Subsidiary; provided,
however, that there shall not be required to be paid or discharged any such tax,
assessment, charge or claim if the amount, applicability or validity thereof is
being contested in good faith by appropriate proceedings and adequate provision
therefor has been made.
Section 4.16. Maintenance of Insurance.
The Company will provide or cause to be provided, for itself and its
Subsidiaries, insurance against loss or damage of the kinds customarily insured
against by entities similarly situated and owning like properties, with
reputable insurers or with the government of the United States of America, or an
agency or instrumentality thereof, in such amounts, with such deductibles and by
such methods as shall be customary for entities similarly situated in the
industry in which the Company or such Subsidiary, as the case may be, is then
conducting business.
Section 4.17. Additional Intercompany Notes Guarantees.
In the event the Company or any of its Subsidiaries acquire or create
another U.S. Subsidiary after the Issue Date, or if any of the Company's
Subsidiaries becomes a U.S. Subsidiary after the Issue Date, and that newly
acquired or created U.S. Subsidiary guarantees the Berkadia Loan, such U.S.
Subsidiary will guarantee the payment of the Intercompany Notes on a senior
basis by that U.S. Subsidiary pursuant to
35
a form of Guarantee substantially identical to the corresponding Guarantee in
favor of the Berkadia Loan and shall take any and all actions reasonably
required to cause the Security Agreements to create and maintain, as security
for the Obligations of such Subsidiary under the Intercompany Notes Guarantee, a
valid and enforceable perfected Lien in and on all the assets of such Subsidiary
to the same extent as a Lien is created and maintained on such assets with
respect to the Berkadia Loan, in favor of the Collateral Trustee for the benefit
of the Company, superior to and prior to the rights of all third Persons other
than the Collateral Trustee and the Lenders under the Berkadia Loan, and subject
to no Liens (other than Liens permitted by the Security Agreements).
Notwithstanding the foregoing, any Intercompany Notes Guarantee will provide by
its terms that it will automatically and unconditionally be released and
discharged under the circumstances described in such Intercompany Notes
Guarantee.
Section 4.18. Fall-Away Provision.
The Company's and its Subsidiaries' obligations to comply with
Sections 4.07, 4.08, 4.10, 4.11, 4.12, 4.13 (with respect to Security Agreements
only), 4.15, 4.16 and 4.17 and Article 10 will be terminated upon the payment in
full in accordance with the provisions of this Indenture, or the provision for
payment in full in accordance with the terms of this Indenture, including
Article 8, of the principal and accrued and unpaid Fixed Interest on all
Outstanding Notes and such provisions shall thereafter cease to be of any
further effect.
ARTICLE 5.
SUCCESSORS
Section 5.01. Mergers and Consolidation.
The Company shall not, directly or indirectly, consolidate or merge
with or into (whether or not the Company is the surviving corporation) another
Person, unless:
(i) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) 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;
(ii) immediately after such consolidation or merger there
is no default or event that, with the passage of time or notice or
both, would be a Default or Event of Default under this Indenture; and
(iii) the Credit Rating immediately following the merger or
consolidation would not be lower than the Credit Rating immediately
prior to the effectiveness of the merger or consolidation or, if there
is no Credit Rating, the rating, if any, assigned to the most senior
long-term indebtedness of the surviving entity on a pro forma basis
for the merger or
36
consolidation by ▇▇▇▇▇'▇ is B3 (or its then current equivalent) or
better or by Standard & Poor's is B- (or its then current equivalent)
or better.
Notwithstanding the foregoing provisions of this Section 5.01, the
Company shall not merge or consolidate with and into FINOVA Capital.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger of the Company in accordance with
Section 5.01 hereof, the successor Person formed by such consolidation or into
or with which the Company is merged shall succeed to, and be substituted for (so
that from and after the date of such consolidation or merger, the provisions of
this Indenture referring to the "Company" shall refer instead to the successor
Person 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.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
Each of the following constitutes an "Event of Default":
(i) the failure of the Company to pay all or any part of
the unpaid principal on the Notes when and as the same becomes due and
payable at the Principal Maturity Date, upon prepayment in accordance
with Section 3.07 or by acceleration;
(ii) failure by the Company to pay installments of Fixed
Interest in full on the Notes for two consecutive Interest Payment
Dates whether or not required to be paid pursuant to Section 4.06
hereof, provided that both of such installments remain unpaid after
such second consecutive Interest Payment Date;
(iii) failure by the Company or any of its Subsidiaries to
observe or perform the provisions of Sections 4.01 or 4.06 if such
failure is not remedied within 30 days;
(iv) failure by the Company to observe or perform in all
material respects any other covenant or agreement on the part of the
Company contained in the Notes or this Indenture, if such failure is
not remedied within 60 days after written notice is given to the
Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes
then Outstanding, in either case specifying such default, requiring
that such default be remedied and stating that such notice is a
"Notice of Default;"
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(v) from and after the payment in full of the obligations
under the Berkadia Credit Agreement, failure by the Company or any
Significant Subsidiary to observe or perform in all material respects
any covenant or agreement on the part of the Company or such
Significant Subsidiary contained in the Security Agreements, the
Intercompany Notes, the Intercompany Notes Guarantee or the
Intercompany Notes Pledge Agreement, if such failure is not remedied
within 60 days after written notice is given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Notes then Outstanding, in
either case specifying such default, requiring that such default be
remedied and stating that such notice is a "Notice of Default;"
(vi) the transfer or other disposition by the Company of
the Intercompany Notes, other than a transfer or other disposition (a)
to a Subsidiary of the Company where such transfer or other
disposition does not result in any adverse impact on the rights of any
Holder, or (b) to the surviving entity in a merger or consolidation
permitted by Section 5.01;
(vii) any of the Security Agreements shall cease, for any
reason, to be in full force and effect with respect to any of the
Collateral, or the Company shall so assert with respect to any
Security Agreements, or any Lien created by any of the Security
Agreements with respect to any of the Collateral shall cease to be
enforceable and of the same effect and priority purported to be
created thereby, in each case, except with respect to any such event
that is immaterial to the rights of the Holders;
(viii) a default occurs under the Berkadia Loan, if such
default results in the acceleration of the Berkadia Loan prior to its
express maturity;
(ix) any Intercompany Notes Guarantee issued by an
Intercompany Notes Guarantor that is a Significant Subsidiary shall
cease, for any reason, to be in full force and effect, or such
Guarantor shall so assert with respect to such Intercompany Notes
Guarantee, or the Intercompany Notes Pledge Agreement with respect to
a Guarantor that is a Significant Subsidiary shall cease, for any
reason, to be in full force and effect with respect to any of the
underlying collateral (as defined in the Intercompany Notes Pledge
Agreement (the "Intercompany Collateral")) of such Guarantor, or such
Guarantor shall so assert with respect to such Intercompany Notes
Pledge Agreement, or any lien created by the Intercompany Notes Pledge
Agreement with respect to the Intercompany Collateral of such a
Guarantor shall cease to be enforceable and of the same effect and
priority purported to be created thereby, in each case, except with
respect to any such event that is immaterial to the rights of the
Company under the Intercompany Notes;
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(x) any of the Company, FINOVA Capital or any
Intercompany Notes Guarantor that is a Significant Subsidiary of the
Company, pursuant to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order
for relief against it in an involuntary case,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of
its property, or
(D) makes a general assignment for the
benefit of its creditors; or
(xi) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against any of the
Company, FINOVA Capital or any Intercompany Notes
Guarantor that is a Significant Subsidiary of the
Company in an involuntary case;
(B) appoints a Custodian of any of the
Company, FINOVA Capital or any Intercompany Notes
Guarantor that is a Significant Subsidiary of the
Company, or for all or substantially all of the
property of any of the Company, FINOVA Capital or
any Intercompany Notes Guarantor that is a
Significant Subsidiary of the Company; or
(C) orders the liquidation of any of the
Company, FINOVA Capital or any Intercompany Notes
Guarantor that is a Significant Subsidiary of the
Company;
and the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clauses (ii) or (iii) of this Section 6.01.
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Section 6.02. Acceleration.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then
Outstanding, by written notice to the Company (and to the Trustee if such notice
is given by the Holders), may, and the Trustee at the request of such Holders
shall, declare the principal of and accrued Interest on the Outstanding Notes to
be immediately due and payable. Upon a declaration of acceleration, such
principal of and accrued Interest shall be immediately due and payable.
Notwithstanding the foregoing, in the case of an Event of Default as described
in (x) and (xi) of Section 6.01 hereof, the Notes shall become due and payable
without further action or notice. Holders of the Notes may not enforce this
Indenture or the Notes except as provided in this Indenture.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy (under this Indenture, or otherwise) to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes, this Indenture or the Security Agreements.
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 6.04. Waiver of Past Defaults.
Subject to Section 9.02, 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 past Default or Event of
Default and its consequences under this Indenture (including any acceleration
other than an automatic acceleration resulting from an Event of Default under
clause (x) or (xi) of Section 6.01 hereof) except a continuing Default or Event
of Default in the payment of Interest on, or the principal of, the Notes or in
respect of a covenant or provision of this Indenture which cannot be modified or
amended without the consent of the Holder of each outstanding Note affected;
provided, however, that in determining whether the Holders of the required
principal amount of Notes have concurred in any such waiver, Notes owned by the
Company or by any Affiliate of the Company shall be disregarded, except that for
the purposes of determining whether the Trustee shall be protected in relying on
any such direction, only Notes which such Trustee knows are so owned shall be
disregarded. 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; provided, however, that no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
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Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the then Outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Notes; provided, however that in
determining whether the Holders of the required principal amount of Notes have
concurred in any such direction, Notes owned by the Company or by any Affiliate
of the Company shall be disregarded, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, only
Notes which such Trustee knows are so owned shall be disregarded. However, (i)
the Trustee may refuse to follow any direction that, in the reasonable opinion
of counsel to the Trustee, conflicts with law or this Indenture, that the
Trustee reasonably determines may be unduly prejudicial to the rights of other
Holders of Notes or that may involve the Trustee in personal liability, and (ii)
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. In case an Event of Default shall occur (which
shall not be cured), the Trustee will be required, in the exercise of its power,
to use the degree of care of a prudent person in the conduct of its own affairs.
Notwithstanding any provision to the contrary in this Indenture, the Trustee is
under no obligation to exercise any of its rights or powers under this Indenture
at the request of any Holder of Notes, unless such Holder shall offer to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(i) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default or the Trustee receives such notice
from the Company;
(ii) the Holders of at least 25% in aggregate principal
amount of the then Outstanding Notes make a written request to the
Trustee to pursue the remedy;
(iii) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense to be incurred in
compliance with such request;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
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(v) during such 60-day period the Holders of a majority in
aggregate principal amount of the then Outstanding Notes do not give
the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal and Interest on such
Holder's Notes, on or after the respective due dates expressed in such Notes, 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; provided, however, that a Holder shall not have the right to institute
any such suit for the enforcement of payment if and to the extent that the
institution or prosecution thereof or the entering of judgment therein would,
under applicable law, result in the surrender, impairment, waiver or loss of the
lien of this Indenture upon any property subject to such Lien.
Section 6.08. Collection Suit.
If an Event of Default specified in Section 6.01(i) or (ii) hereof
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, and Interest remaining unpaid on, the Notes and interest
on overdue principal, Interest and such further amount as shall be sufficient to
cover the costs and expenses of collection and to the extent lawful, with
interest on overdue principal and installments of Interest at the rate specified
in the Notes in each case, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, and its agents and counsel.
Section 6.09. 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, and its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the
Company, the Company's creditors or the Company's property, to participate as a
member, voting or otherwise, of any official committee of creditors appointed in
such manner and shall be entitled and empowered to collect, receive and
distribute any money or other securities or property payable or deliverable upon
the conversion or exchange of the Notes or on any such claims and any Custodian
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee,
42
and its agents and counsel, and any other amounts due the Trustee under Section
7.07 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 7.07 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 6, it shall
pay out the money in the following order:
First: to the Trustee, the Collateral Trustee, and its agents and
attorneys for amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by the
Trustee and the Collateral Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal and Interest ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes first for principal, then
for Fixed Interest and then for Contingent Interest, respectively;
Third: without duplication, to the Holders for any other Obligations
owing to the Holders under this Indenture, the Notes or the Security Agreements;
and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then, and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Company, the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
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Section 6.12. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or wrongfully taken Notes, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.13. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article Six or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 6.14. 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 and expenses, 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 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then Outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing of which a
Responsible Officer of the Trustee has knowledge, 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 person would exercise or
use under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
44
(i) the duties of the Trustee shall be determined solely
by the express provisions of this Indenture or the TIA and the Trustee
need perform only those duties that are specifically set forth in this
Indenture or the TIA and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(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, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(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 7.01;
(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 6.05 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 7.01.
(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 of Notes, including without limitation the provisions of
Section 6.05 hereof, unless such Holder shall have offered to the Trustee,
security and indemnity satisfactory to it against any loss, liability or expense
that might be incurred by it in complying with such request.
(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
45
by the Trustee need not be segregated from other funds except to the extent
required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely on the truth of the statements
and correctness of the opinions contained in, and shall be protected from acting
or refraining from acting 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.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's 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 Officer's Certificate or Opinion of Counsel. Prior to taking, suffering or
admitting any action, the Trustee may consult with counsel of the Trustee's own
choosing and the 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
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.
(g) The Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Notes unless either (1) a Responsible
Officer of the Trustee shall have actual knowledge of such Default or Event of
Default or (2) written notice of such Default or Event of Default shall have
been given to the Trustee by the Company or by any Holder of the Notes.
(h) The rights, privileges, protections, immunities and benefits given
to the Trustee, including without limitation, its right to be indemnified, are
extended to,
46
and shall be enforceable by, the Trustee in each of its capacities hereunder and
each agent, custodian and other Person employed to act hereunder.
(i) The Trustee may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officer's Certificate may be signed by any Person authorized to sign an
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superceded.
Section 7.03. Individual Rights of Trustee.
The Trustee, in its individual or any other capacity may become the
owner of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission 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 7.04. 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 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 itself; and
it shall not be responsible for any statement or recital 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 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of 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 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 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 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
47
Trustee also shall comply with TIA (S)313(b). 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 Commission and each
stock exchange on which the Company has informed the Trustee in writing the
Notes are listed in accordance with TIA (S)313(d). The Company shall promptly
notify the Trustee when the Notes are listed on any stock exchange and of any
delisting thereof.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time compensation as
shall be agreed in writing between the Company and the Trustee for its
acceptance of this Indenture and services hereunder. To the extent permitted by
law, 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 actual out
of pocket 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, but shall not
include expenses incurred as a result of the Trustee's negligence or willful
misconduct.
The Company shall indemnify each of the Trustee and any predecessor
Trustee against any and all losses, liabilities, damages, claims or expenses,
including taxes (other than taxes based on or measured by the income or gross
receipts of the Trustee) 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 7.07) 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, except to
the extent of actual prejudice to the Company resulting from such failure. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and, if required due to conflicts, 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 may be
withheld in its reasonable discretion.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by
48
the Trustee, except that held in trust to pay principal and Interest on
particular Notes redeemed, defeased, repurchased or otherwise satisfied and
discharged. 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 6.01(v) or (vi) 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.
Section 7.08. 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 7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then Outstanding Notes may remove the Trustee by so
notifying the Trustee, as applicable, and the Company in writing. The Company
may remove the Trustee, as applicable, if:
(a) the Trustee, as applicable, fails to comply with Section 7.10
hereof;
(b) the Trustee, as applicable, is adjudged a bankrupt or an insolvent
or an order for relief is entered with respect to the Trustee, as applicable,
under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee, as
applicable, or its property; or
(d) the Trustee, as applicable, 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 at least 10% in principal amount of the then Outstanding Notes
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.
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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 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee, as applicable, 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 the duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee provided
that all sums owing to the retiring Trustee have been paid and subject to the
Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.
Section 7.09. 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.
Section 7.10. Eligibility; Disqualification.
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 shall at all times have a combined capital surplus of at least
$150.0 million as set forth in its most recent annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)(S)310(a)(1), (2) and (5). The Trustee is subject to TIA
(S)310(b).
Section 7.11. Preferential Collection of Claims against the
Company.
The Trustee is subject to TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). A Trustee who has resigned or been removed
shall be subject to TIA (S)311(a) to the extent indicated therein.
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ARTICLE 8.
[RESERVED]
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of the Notes.
Notwithstanding Section 9.02 of this Indenture, without the consent of
any Holder of Notes, the Company and the Trustee may amend or supplement this
Indenture or the Notes:
(i) to cure any ambiguity, defect or inconsistency which,
in the good faith opinion of the Board of Directors of the Company
evidenced by a Board Resolution, exists;
(ii) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(iii) to comply with Article 5 hereof;
(iv) to make any change that would provide any additional
rights or benefits to the Holders of the Notes;
(v) to execute and deliver any documents necessary or
appropriate to release Liens on any Collateral as permitted by Section
10.03 or 10.04(b) hereof;
(vi) to comply with requirements of the Commission in
connection with the qualification of this Indenture under the TIA; or
(vii) to substitute a new Trustee pursuant to Sections 7.08
or 7.09.
Upon the written request of the Company accompanied by resolutions of
the Board of Directors or other governing body of the Company authorizing the
execution of any such amended or supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.06 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 affects its own rights, duties or immunities under this Indenture
or otherwise.
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Section 9.02. With Consent of Holders of Notes.
Except as provided in the next sentence and the next two succeeding
paragraphs, this Indenture 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 voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for Notes), and, in such case,
without prior written notice to the Holders and subject to Sections 6.04 and
6.07 hereof, any existing Default or Event of Default or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then Outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for Notes). Subject to the requirements of the TIA, the Security Agreements,
the Intercompany Notes, the Intercompany Notes Guarantees and the provisions of
Section 4.06, including any definition used therein, and Section 4.13 may be
amended or supplemented, or compliance with provisions contained therein or in
any such definition waived, with the consent of the Holders of at least 75% in
principal amount of the Notes then Outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for Notes); provided, however, that the amendment of (a) the definition of
"Principal Maturity Date" or "Contingent Interest Maturity Date", (b) the order
of payments provided for in Section 4.06(a) hereof, (c) the $0.95 and $0.05
figures contained in clause (v) of Section 4.06(a) hereof, (d) the 5.263% figure
contained in clause (vi) of Section 4.06(a) hereof, and (e) the $100,000,000
amount and 95% and 5% figures set forth in clause (vii) of Section 4.06(a)
hereof, shall require the consent of each Holder affected by such amendment.
Upon the written request of the Company accompanied by resolutions of
the Board of Directors or other governing body of the Company 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 9.06 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, 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 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Note affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure or delay 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.
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Without the consent of each Holder affected, an amendment or waiver,
including a waiver pursuant to Section 6.04, may not:
(i) reduce the percentage or principal amount of Notes
whose Holders must consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the Principal
Maturity Date of any Note;
(iii) reduce the rate of or change the time for payment of
Interest on any Note;
(iv) waive a Default or Event of Default in the payment
of principal of or 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);
(v) make any Note payable in money other than that
stated in the Notes; or
(vi) change the place or currency of payment of principal
of or Interest on, any Note;
(vii) impair the right to institute suit for the
enforcement of any payment on or after the Principal Maturity Date of
any Note; or
(viii) make any change in the foregoing amendment and waiver
provisions.
Section 9.03. 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 9.04. 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 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. However, any such Holder 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 Trustee receives notice evidencing the taking of action by
the Holders of the specified percentage in aggregate principal amount specified
in this Indenture with respect to such waiver, supplement or
53
amendment. When an amendment, supplement or waiver becomes effective in
accordance with its terms, it thereafter binds every Holder.
Section 9.05. 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 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental indenture or
amended Security Agreements authorized pursuant to this Article 9 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 signing
or refusing to sign any amended or supplemental indenture the Trustee shall be
entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
12.04 hereof, 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, that it is not inconsistent herewith and therewith,
and that it will be valid and binding upon the Company in accordance with its
terms.
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01. Security Agreements.
The due and punctual payment of the principal of and Fixed Interest,
but not Contingent Interest, on the Notes when and as the same shall be due and
payable, whether on an Interest Payment Date, at the Principal Maturity Date ,
by acceleration or by prepayment in accordance with Section 3.07, and interest
on the overdue principal of the Notes and performance of all other obligations
of the Company (excluding any and all obligations with respect to any Contingent
Interest) to the Holders of Notes, the Trustee or the Collateral Trustee under
this Indenture, the Security Agreements and the Notes, according to the terms
hereunder or thereunder, shall be secured as provided in the Security Agreements
which the Company has entered into simultaneously with the execution of this
Indenture. Each Holder of Notes, by its acceptance thereof, consents and agrees
to the terms of the Security Agreements (including, without limitation, the
provisions providing for foreclosure and release of Collateral) as the same may
be in effect or may be amended from time to time in accordance with its terms,
appoints the Collateral Trustee to act as the "Collateral Trustee" thereunder
and authorizes and directs
54
the Collateral Trustee to enter into the Security Agreements and to perform its
obligations and exercise its rights thereunder in accordance therewith. The
Company shall do or cause to be done all such acts and things as may be
necessary or proper, or as may be required by the provisions of the Security
Agreements, to assure and confirm to the Trustee and the Collateral Trustee the
security interest in the Collateral contemplated hereby, by the Security
Agreements or any part thereof, as from time to time constituted, so as to
render the same available for the security and benefit of this Indenture and of
the Notes secured hereby, according to the intent and purposes herein expressed.
The Company shall take, or shall cause its Subsidiaries to take any and all
actions reasonably required to cause the Security Agreements to create and
maintain, as security for the Obligations of the Company hereunder, a valid and
enforceable perfected Lien in and on all the Collateral, in favor of the
Collateral Trustee for the ratable benefit of the Holders of Notes, superior to
and prior to the rights of all third Persons other than the Collateral Trustee
and those Persons holding First Lien Debt, and subject to no Liens (other than
Liens permitted by the Security Agreements).
Section 10.02. Recording and Opinions.
(a) The Company shall furnish to the Collateral Trustee and the
Trustee promptly following the execution and delivery of this Indenture, an
Opinion of Counsel, either (i) stating that, in the opinion of such counsel,
action has been taken with respect to the recording, registering, filing, re-
recording, re-registering and re-filing of all supplemental indentures,
financing statements, continuation statements or other instruments of further
assurance as is necessary to maintain the Lien of the Security Agreements and
reciting with respect to the security interests in the Collateral the details of
such action or referring to prior Opinions of Counsel in which such details are
given or (ii) stating that, in the opinion of such counsel, no such action is
necessary to make such Lien effective.
(b) The Company shall furnish to the Collateral Trustee and the
Trustee within three months after each anniversary of the Issue Date an Opinion
of Counsel, dated as of such date, either (i) (A) stating that, in the opinion
of such counsel, action has been taken with respect to the recording,
registering, filing, re-recording, re-registering and re-filing of all
supplemental indentures, financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain the Lien of the
Security Agreements and reciting with respect to the security interests in the
Collateral the details of such action or referring to prior Opinions of Counsel
in which such details are given and (B) stating that, based on relevant laws as
in effect on the date of such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are necessary as of
such date and during the succeeding 12 months fully to preserve and protect, to
the extent such protection and preservation are possible by filing, the rights
of the Holders of Notes and the Collateral Trustee and the Trustee hereunder and
under the Security Agreements with respect to the security interests in the
Collateral, or (ii) stating that, in the opinion of such counsel, no such action
is necessary to maintain such Lien and assignment.
55
Section 10.03. Release of Collateral.
(a) Subject to subsection (b) of this Section 10.03, Collateral may be
released from the Lien and security interest created by the Security Agreements
at any time or from time to time in accordance with the provisions of the
Security Agreements and as provided hereby. The Collateral will be automatically
released from the Lien at such time as (i) the Company has paid in full or
otherwise provided for the payment in full in accordance with this Indenture of
the principal amount and Fixed Interest due on all of the Notes; (ii) the
Collateral is foreclosed upon in accordance with the Security Agreements; or
(iii) with the consent of the Holders of 75% in principal amount of Notes then
Outstanding voting as a single class (including consents obtained in connection
with a tender offer or exchange offer for Notes). Upon the request of the
Company pursuant to an Officer's Certificate certifying that all conditions
precedent to such release hereunder and under the Security Agreements have been
met, if the Trustee is not the Collateral Trustee, the Trustee shall thereafter
deliver a certificate to the Collateral Trustee stating that such conditions
have been satisfied, and instruct the Collateral Trustee to release the Liens
pursuant to this Indenture and the Security Agreements. Upon receipt of such
Officer's Certificate, the Collateral Trustee shall (at the sole cost and
expense of the Company) execute, deliver or acknowledge any necessary or proper
instruments of termination, satisfaction or release to evidence the release of
any Collateral permitted to be released pursuant to this Indenture or the
Security Agreements.
(b) The release of any Collateral from the terms of this Indenture and
the Security Agreements shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of the Security Agreements. To the
extent applicable, the Company shall cause TIA (S)313(b), relating to reports,
and TIA (S)314(d), relating to the release of property or securities from the
Lien and security interest of the Security Agreements and relating to the
substitution therefor of any property or securities to be subjected to the Lien
and security interest of the Security Agreements, to be satisfied. Any
certificate or opinion required by TIA (S)314(d) may be made by an Officer of
the Company except in cases where TIA (S)314(d) requires that such certificate
or opinion be made by an independent Person, which Person shall be an
independent engineer, appraiser or other expert selected or approved by the
Company.
Section 10.04. Certificates of the Company.
The Company shall furnish to the Trustee and the Collateral Trustee, prior
to each proposed release of Collateral pursuant to the Security Agreements, (i)
all documents, if any, required by TIA (S)314(d) and (ii) an Opinion of Counsel,
which may be rendered by internal counsel to the Company, to the effect that
such accompanying documents constitute all documents required by TIA (S)314(d).
The Trustee and the Collateral Trustee may, to the extent permitted by Sections
7.01 and 7.02 hereof, accept as conclusive evidence of compliance with the
foregoing provisions the appropriate statements contained in such documents and
such Opinion of Counsel.
56
Section 10.05. Certificates of the Trustee.
In the event that the Company wishes to release Collateral in
accordance with the Security Agreements and has delivered the certificates and
documents required by the Security Agreements and Sections 10.03 and 10.04
hereof, the Trustee shall determine whether it has received all documentation
required by TIA (S)314(d) in connection with such release and, based on such
determination and the Opinion of Counsel delivered pursuant to Section 10.02,
shall deliver a certificate to the Collateral Trustee setting forth such
determination; provided, however, that so long as the Trustee is the Collateral
Trustee, the requirement that the Trustee deliver a certificate to the
Collateral Trustee shall not be applicable.
Section 10.06. Authorization of Actions to Be Taken by the Trustee
and the Collateral Trustee Under the Security
Agreements.
Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee
shall, in its sole discretion and without the consent of the Holders of Notes,
direct, on behalf of the Holders of Notes, the Collateral Trustee to take all
actions it deems necessary or appropriate in order to (a) enforce any of the
terms of the Security Agreements and (b) collect, receive and distribute any and
all amounts payable in respect of the Obligations of the Company hereunder or
under the Security Agreements. The Trustee and the Collateral Trustee shall have
power to institute and maintain such suits and proceedings as either may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Security Agreements or this Indenture, and such
suits and proceedings as the Trustee or the Collateral Trustee may deem
expedient to preserve or protect its interests and the interests of the Holders
of Notes in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Notes or of the Trustee or the Collateral
Trustee).
Section 10.07. Authorization of Receipt of Funds by the Trustee
Under the Security Agreements.
The Collateral Trustee shall deliver to the Trustee and the Trustee is
authorized to receive any funds for the benefit of the Holders of Notes
distributed under the Security Agreements, and to make further distributions of
such funds to the Holders of Notes according to the provisions of this Indenture
and the Security Agreements.
57
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose payment
money has theretofore been deposited in trust and thereafter repaid to the
Company) have been delivered to the Trustee for cancellation; or
(b) the Company has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for the benefit of the Holders,
cash in U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire indebtedness on the
Notes not delivered to the Trustee for cancellation for principal on, accrued
and unpaid Fixed Interest to the Principal Maturity Date or, if prepaid in
accordance with Section 3.07, to the prepayment date set forth in the notice
contemplated by Section 3.01 and the maximum remaining amount of Contingent
Interest payable on all Outstanding Notes;
(2) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other material instrument to which the Company
is a party or by which the Company is bound;
(3) the Company has paid or caused to be paid all sums payable by it
under this Indenture; and
(4) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
the Notes at maturity or the prepayment date, as the case may be.
In addition, the Company must deliver an Officer's Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money shall have been deposited with the Trustee pursuant to subclause (b) of
clause (1) of this Section, the provisions of Section 12.02 and Section 8.06
shall survive.
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Section 11.02. Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with
the Trustee pursuant to Section 11.01 shall be held in trust and applied by it,
in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and Interest, for whose
payment such money has been deposited with the Trustee; provided, however, such
money need not be segregated from other funds except to the extent required by
law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's Obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 11.01;
provided, however, that if the Company has made any payment of principal of
Interest on any Notes because of 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 or Government Securities held by the Trustee
or Paying Agent.
ARTICLE 12.
MISCELLANEOUS
Section 12.01. 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 12.02. Notices.
Any notice or communication by the Company, the Trustee or the
Collateral 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), telecopier or overnight air courier guaranteeing next day delivery,
to the others' address:
59
If to the Company:
The FINOVA Group Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
If to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
If to the Collateral Trustee, at the address provided in the Security
Agreements for notices to be sent.
The Company or the Trustee, by notice to the other 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 receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier promising next Business Day delivery, except that notices and
communications to the Trustee or the Collateral Trustee shall be deemed duly
given and effective only upon receipt.
Any notice or communication to a Holder shall be mailed by first class
mail or by overnight air courier promising next Business 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 at the same time.
60
Section 12.03. Communication by Holders of Notes with Other Holders
of Notes.
Holders may communicate pursuant to TIA (S)312(b) with other Holders
with respect to their rights under this Indenture, the Notes and the Security
Agreements. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S)312(c).
Section 12.04. 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, upon
request:
(a) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee, as applicable (which shall include the statements
set forth in Section 12.05 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 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 12.05. 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 or she 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.
61
Section 12.06. 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 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes, this Indenture, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of 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 12.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09. No Adverse Interpretation of Other Agreements.
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 12.10. Successors.
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 12.11. 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 12.12. 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.
62
Section 12.13. 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.
[Signatures on following page]
63
SIGNATURES
Dated as of , 2001
THE FINOVA GROUP INC.
By:_________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:_________________________
Name:
Title:
64
EXHIBIT A
[Face of Note]
7.5% Senior Secured Note Maturing 2009 with Contingent Interest due 2016
CUSIP No. __________
No.___ $____________
THE FINOVA GROUP INC. promises to pay to ________________________ or
its registered assigns the principal sum of _______________________ Dollars on
November 15, 2009.
Interest Payment Dates: May 15 and November 15, commencing November
15, 2001.
Reference Dates: The fifth Business Day immediately preceding each
Interest Payment Date.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated: ________
THE FINOVA GROUP INC.
By:___________________________
Name:
Title:
TRUSTEE'S CERTIFICATION OF AUTHENTICATION:
This is one of the Notes
referred to in the within
mentioned Indenture:
THE BANK OF NEW YORK, as Trustee
By:________________________________
Authorized Signatory
A-1
[Back of Note]
7.5% Senior Secured Note Maturing 2009 with Contingent Interest due 2016
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. Interest and Principal. (A) The FINOVA Group Inc., a Delaware
corporation (the "Issuer"), promises to pay Interest on the principal amount of
this Note at the rate and in the manner specified below. Principal will be
paid, (i) if and to the extent the Issuer is permitted to make such payments
pursuant to the terms of the Indenture (as defined below), semi-annually on each
May 15 and November 15, commencing November 15, 2001 or if any such day is not a
Business Day on the next succeeding Business Day (each a "Principal Payment
Date") and (ii) in any event, on November 15, 2009 (the "Principal Maturity
Date").
(B) Fixed interest ("Fixed Interest") will accrue at 7.5% per annum
and will be payable, if and to the extent the Issuer is permitted to make such
payments pursuant to the terms of the Indenture, semi-annually on each May 15
and November 15, commencing November 15, 2001 or if any such day is not a
Business Day on the next succeeding Business Day (each an "Interest Payment
Date"). Interest shall be paid in accordance with the provisions of Section
4.06 hereof; provided, however, that to the extent Fixed Interest is not paid on
an Interest Payment Date, such amount of unpaid Fixed Interest shall accrue
interest at the rate of 7.5% per annum until paid and shall be treated as Fixed
Interest for all purposes under this Indenture. Payments of Fixed Interest
shall be applied first to all accrued but previously unpaid Fixed Interest in
the order in which such Fixed Interest accrued. Fixed Interest will be computed
on the basis of a 360-day year consisting of twelve 30-day months. Fixed
Interest shall accrue from the most recent date to which Fixed Interest has been
paid or, if no interest has been paid, from the Issue Date. After the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceedings, relating to the Issuer, unpaid principal and
Interest on the Notes shall continue to include interest accruing at the rate
provided in the Notes, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding.
Principal and Fixed Interest shall be payable to the Holders of record
of the Notes at 5:00 p.m., New York City time, on the fifth Business Day
immediately preceding either a Principal Payment Date or an Interest Payment
Date (each such date, a "Reference Date").
(C) Each $1,000 principal amount of the Notes entitles the Holder
thereof to receive such Holder's pro rata share of an aggregate of up to
$100,000,000 of additional interest ("Contingent Interest") based on the
respective aggregate principal amount of each Holder's Notes. Contingent
Interest will be payable, if and to the extent the Issuer is permitted to make
such payments pursuant to the terms of the Indenture, on each Interest Payment
Date until the first to occur of (A) the payment of an aggregate of
A-2
$100,000,000 in Contingent Interest (as such amount may be reduced as provided
in Section 4.06 of the Indenture) or (B) the Contingent Interest Maturity Date.
2. Method of Payment. The Issuer will pay principal on the Notes to
the Persons who are registered Holders of Notes on the applicable Reference Date
next preceding the Principal Payment Date, even if such Notes are cancelled
after such Reference Date and on or before such Principal Payment Date. The
Issuer will pay Fixed Interest and Contingent Interest on the Notes to the
Persons who are registered Holders of Notes at the close of business on the
applicable Reference Date next preceding the Interest Payment Date, even if such
Notes are cancelled after such Reference Date and on or before such Interest
Payment Date. The Issuer will pay principal and Interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. The Notes will be payable both as to principal and Interest at
the office or agency of the Issuer maintained for such purpose within the City
and State of New York or, at the option of the Issuer, payment of Interest may
be made by check mailed to the Holders of Notes at their respective addresses
set forth in the register of Holders of Notes. Unless otherwise designated by
the Issuer, the Issuer's office or agency in New York will be the office or
agency of the Trustee maintained for such a purpose.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Issuer may change any Paying Agent, Registrar
or co-registrar without prior notice to any Holder of a Note. The Issuer may
act in any such capacity.
4. Indenture. The Issuer issued the Notes under an Indenture, dated
as of August , 2001 (the "Indenture"), between the Issuer 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 (15 U.S. Code
(S)(S) 77aaa-77bbbb), as in effect on the Issue Date. The Notes are subject to
all such terms, and Holders of Notes are referred to the Indenture and such act
for a statement of such terms. The terms of the Indenture shall govern any
inconsistencies between the Indenture and the Notes. The Notes are secured
obligations of the Issuer.
5. Optional Prepayment. Subject to compliance with Section 4.06 of
the Indenture, the Issuer shall have the option to prepay the Notes, in whole or
in part, upon not less than 10 nor more than 60 days' notice, at a prepayment
price equal to the principal amount of the Notes or portion thereof being
prepaid (subject to the right of Holders of record on the relevant record date
to receive Fixed Interest due on the related Interest Payment Date) but without
premium or penalty of any kind.
6. Sinking Fund Payments . The Issuer will not be required to make
sinking fund payments with respect to the Notes.
7. Notice of Prepayment. Notice of prepayment pursuant to Article 3
of the Indenture shall be mailed at least 10 days but not more than 60 days
before the prepayment date to each Holder whose Notes are to be prepaid at its
registered address.
A-3
Notes may be prepaid in part but only in whole multiples of $1,000, unless all
of the Notes held by a Holder of Notes are to be prepaid. On and after the
prepayment date, Fixed Interest ceases to accrue on Notes or portions of them
called for prepayment.
8. 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
of a Note, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not exchange or register the transfer of any Note
or portion of a Note selected for prepayment. 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 prepaid pursuant to Article 3 of the Indenture.
9. Persons Deemed Owners. Prior to due presentment to the Trustee
for registration of the transfer of this Note, the Trustee, any Agent and the
Issuer may deem and treat the Person in whose name this Note is registered as
its absolute owner for the purpose of receiving payment of principal of and
Interest on this Note and for all other purposes whatsoever, whether or not this
Note is overdue, and neither the Trustee, any Agent nor the Issuer shall be
affected by notice to the contrary. The Holder shall be treated as its owner
for all purposes.
10. Amendments, Supplement and Waivers. Subject to certain
exceptions, the Indenture and 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 noncompliance 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 and 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 comply with Article V of the
Indenture, to make any change that would provide any additional rights or
benefits to the Holders of the Notes, to execute and deliver any documents
necessary or appropriate to release Liens on any Collateral as permitted by the
Indenture; to comply with the requirements of the Commission in order to effect
or maintain the qualification of the Indenture under the Trust Indenture Act or
to substitute a new Trustee pursuant to Sections 7.08 or 7.09 of the Indenture.
11. Defaults and Remedies. Events of Default include, without
limitation: the failure of the Issuer to pay all or any part of the unpaid
principal on the Notes when and as the same becomes due and payable at the
Principal Maturity Date, upon prepayment in accordance with Section 3.07 of the
Indenture or by acceleration; failure by the Issuer to pay installments of Fixed
Interest in full on the Notes for two consecutive Interest Payment Dates whether
or not required to be paid pursuant to Section 4.06 of the Indenture, provided
that both of such installments remain unpaid after such second consecutive
Interest Payment Date; failure by the Issuer or any of its Subsidiaries to
observe or perform the provisions of Sections 4.01 or 4.06 of the Indenture, if
such
A-4
failure is not remedied within 30 days; failure by the Issuer to observe or
perform in all material respects any other covenant or agreement on the part of
the Issuer contained in the Notes or the Indenture, if such failure is not
remedied within 60 days after written notice is given to the Issuer by the
Trustee or to the Issuer and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Notes then Outstanding, in either case
specifying such default, requiring that such default be remedied and stating
that such notice is a "Notice of Default;" from and after the payment in full of
the obligations under the Berkadia Credit Agreement, failure by the Issuer or
any Significant Subsidiary to observe or perform in all material respects any
covenant or agreement on the part of the Issuer or such Significant Subsidiary
contained in the Security Agreements, the Intercompany Notes, the Intercompany
Notes Guarantee or the Intercompany Notes Pledge Agreement, if such failure is
not remedied within 60 days after written notice is given to the Issuer by the
Trustee or to the Issuer and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Notes then Outstanding, in either case
specifying such default, requiring that such default be remedied and stating
that such notice is a "Notice of Default;" the transfer or other disposition by
the Issuer of the Intercompany Notes, other than a transfer or other disposition
(a) to a Subsidiary of the Issuer where such transfer or other disposition does
not result in any adverse impact on the rights of any Holder, or (b) to the
surviving entity in a merger or consolidation permitted by Section 5.01 of the
Indenture; any of the Security Agreements shall cease, for any reason, to be in
full force and effect with respect to any of the Collateral, or the Issuer shall
so assert with respect to any Security Agreements, or any Lien created by any of
the Security Agreements with respect to any of the Collateral shall cease to be
enforceable and of the same effect and priority purported to be created thereby,
in each case, except with respect to any such event that is immaterial to the
rights of the Holders; a default occurs under the Berkadia Loan, if such default
results in the acceleration of the Berkadia Loan prior to its express maturity;
any Intercompany Notes Guarantee issued by an Intercompany Notes Guarantor that
is a Significant Subsidiary shall cease, for any reason, to be in full force and
effect, or such Guarantor shall so assert with respect to such Intercompany
Notes Guarantee, or the Intercompany Notes Pledge Agreement with respect to a
Guarantor that is a Significant Subsidiary shall cease, for any reason, to be in
full force and effect with respect to any of the Intercompany Collateral of such
Guarantor, or such Guarantor shall so assert with respect to such Intercompany
Notes Pledge Agreement, or any lien created by the Intercompany Notes Pledge
Agreement with respect to the Intercompany Collateral of such a Guarantor shall
cease to be enforceable and of the same effect and priority purported to be
created thereby, in each case, except with respect to any such event that is
immaterial to the rights of the Issuer under the Intercompany Notes; and certain
events of bankruptcy or insolvency with respect to the Issuer, FINOVA Capital or
any Intercompany Notes Guarantor that is a Significant Subsidiary of the Issuer.
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 immediately. Holders of the Notes 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;
provided, however, that
A-5
in determining whether the Holders of the required principal amount of Notes
have concurred in any such direction, Notes owned by any Affiliate of the Issuer
shall be disregarded, except that for purposes of determining whether the
Trustee shall be protected in relying on any such direction, only Notes which a
responsible officer of the Trustee actually knows are so owned shall be
disregarded. 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 past 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 principal of the Notes;
provided, however, that in determining whether the Holders of the required
principal amount of Notes have concurred in any such waiver, Notes owned by any
Affiliate of the Issuer shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, only Notes which a responsible officer of the Trustee actually knows
are so owned shall be disregarded.
12. Trustee Dealings with Issuer. The Trustee under the Indenture,
in its individual or other capacity, may make loans to, accept deposits from,
and perform services for the Issuer or its Affiliates, and may otherwise deal
with the Issuer or its Affiliates, as if it were not Trustee; however, if the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the Commission for permission to continue as Trustee or
resign.
13. No Personal Liabilities of Directors, Officers, Employees and
Stockholders. No director, officer, employee, incorporator or stockholder of
the Issuer, as such, shall have any liability for any obligations of the Issuer
under the Notes, the Indenture or the Pledge Agreement 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.
14. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
15. Abbreviations. Customary abbreviations may be used in the name
of a Holder of a Note 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).
16. CUSIP Number. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuer has caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders of Notes. No
representation is made
A-6
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.
17. Pledge Agreement. As provided in the Indenture and the Pledge
Agreement, and subject to certain limitations set forth therein, the Obligations
of the Issuer under the Indenture and the Pledge Agreement are secured by the
Collateral as provided in the Pledge Agreement. Each Holder, by accepting a
Note, agrees to be bound by all terms and provisions of the Pledge Agreement, as
the same may be amended from time to time. The Liens created under the Pledge
Agreement shall be released upon the terms and subject to the conditions set
forth in the Indenture and the Pledge Agreement.
18. Successor Corporation. When a successor Person assumes all the
obligations of its predecessor under the Indenture, such successor Person may
exercise every right and power of the Issuer under the Indenture with the same
effect as if such successor Person had been named as the Issuer therein.
The Issuer will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture or the Pledge Agreement. Request may
be made to:
The FINOVA Group Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(print or type assignee's name, address and zip code)
and irrevocably appoint ______________________ agent to transfer this
Note on the books of the Issuer. 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:
A-8
COLLATERAL TRUST AGREEMENT
Dated as of August __, 2001
among
FINOVA CAPITAL CORPORATION, THE FINOVA GROUP INC. and Each Other Grantor From
Time to Time Party Hereto,
BERKADIA LLC,
THE BANK OF NEW YORK,
as the Indenture Trustee,
and
WILMINGTON TRUST COMPANY,
as the Collateral Trustee
TABLE OF CONTENTS
Page
----
ARTICLE I. Defined Terms............................................ 2
Section 1.1 Definitions.............................................. 2
Section 1.2 Certain Other Terms...................................... 5
ARTICLE II. Certain Obligations and Duties of the Collateral Trustee. 6
Section 2.1 Authorization to Execute Certain Documents............... 6
Section 2.2 Certain Representations and Warranties................... 6
Section 2.3 Actions.................................................. 6
Section 2.4 Limitation on Duties..................................... 7
ARTICLE III. Actionable Defaults; Remedies............................ 7
Section 3.1 Actionable Default....................................... 7
Section 3.2 Control by Lender and Indenture Trustee.................. 8
Section 3.3 Remedies................................................. 8
Section 3.4 Right to Initiate Judicial Proceedings, etc.............. 10
Section 3.5 Appointment of a Receiver................................ 11
Section 3.6 Exercise of Powers....................................... 11
Section 3.7 Remedies Not Exclusive................................... 11
Section 3.8 Limitation by Law........................................ 11
Section 3.9 Absolute Rights of Secured Parties....................... 12
Section 3.10 Restatement of Rights.................................... 12
ARTICLE IV. Priority; Collateral Account; Application of Moneys...... 12
Section 4.1 Priority of Security Interests........................... 12
Section 4.2 The Collateral Account................................... 12
Section 4.3 Grant of Security Interest; Control of Collateral Account 13
Section 4.4 Investment of Funds Deposited in Collateral Account...... 13
Section 4.5 Application of Moneys.................................... 14
ARTICLE V. Agreement with Collateral Trustee........................ 15
Section 5.1 Delivery of Secured Debt Instruments..................... 15
Section 5.2 Compensation and Expenses................................ 15
Section 5.3 Stamp and Other Similar Taxes............................ 16
Section 5.4 Filing Fees, Excise Taxes, etc........................... 16
Section 5.5 Indemnification.......................................... 16
Section 5.6 Further Assurances....................................... 17
ARTICLE VI. Collateral Trustee....................................... 17
Section 6.1 Appointment of Collateral Trustee and Acceptance of Trust 17
Section 6.2 Exculpatory Provisions................................... 17
Section 6.3 Delegation of Duties..................................... 18
Section 6.4 Reliance by Trustee...................................... 19
Section 6.5 Limitations on Duties of Trustee......................... 19
Section 6.6 Moneys to be Held in Trust............................... 20
Section 6.7 Resignation and Removal of the Collateral Trustee........ 20
Section 6.8 Status of Successors to the Collateral Trustee........... 21
Section 6.9 Merger of the Collateral Trustee......................... 21
Section 6.10 Additional Co-Trustees; Separate Trustees................ 22
i
TABLE OF CONTENTS
(continued)
Page
----
ARTICLE VII. Release of Collateral.................................... 23
Section 7.1 Conditions to Release.................................... 23
Section 7.2 Procedure for Release.................................... 24
Section 7.3 Effective Time of Release................................ 24
Section 7.4 Release of Specified Collateral.......................... 25
ARTICLE VIII. Miscellaneous............................................ 25
Section 8.1 Amendments, Supplements and Waivers...................... 25
Section 8.2 Notices.................................................. 27
Section 8.3 Dealings with Grantors................................... 28
Section 8.4 Claims Against the Collateral Trustee.................... 28
Section 8.5 Successors and Assigns................................... 28
Section 8.6 Counterparts............................................. 28
Section 8.7 Severability............................................. 28
Section 8.8 Section Headings......................................... 28
Section 8.9 Conflict with other Agreements........................... 29
Section 8.10 Governing Law............................................ 29
Section 8.11 Consent to Jurisdiction; Waiver of Jury Trial............ 29
ii
COLLATERAL TRUST AGREEMENT
Collateral Trust Agreement, dated as of August __, 2001 (this
"Agreement"), by FINOVA CAPITAL CORPORATION ("FNV Capital"), THE FINOVA GROUP
INC. (the "Parent") and each of the other entities listed on the signature pages
hereof or which becomes a party hereto pursuant to Section 6.10 of the
Subsidiary Security Agreement (collectively with FNV Capital and the Parent, the
"Grantors"), BERKADIA LLC ("Berkadia" or the "Lender"), THE BANK OF NEW YORK,
acting not in its individual capacity but solely as trustee under the Indenture
(in such capacity, the "Indenture Trustee"), and WILMINGTON TRUST COMPANY,
acting, except to the extent expressly stated otherwise in Section 2.2 and
Section 6.2, not in its individual capacity but solely as Collateral Trustee
under this Agreement for the Secured Parties (in such capacity, the "Collateral
Trustee").
W i t n e s s e t h:
Whereas, (i) FNV Capital and Berkadia entered into the Credit
Agreement, dated as of August __, 2001 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), pursuant to which
Berkadia extended to FNV Capital a term loan in the principal amount of
$6,000,000,000, (ii) FNV Capital issued the Intercompany Note to the Parent,
(iii) the Parent entered into the Parent Guaranty, pursuant to which the Parent
has guaranteed the Credit Agreement Obligations, (iv) each Grantor, other than
the Parent and FNV Capital, entered into the Subsidiary Guaranty, pursuant to
which each such Grantor has guaranteed the Credit Agreement Obligations, (v)
each Grantor, other than the Parent, entered into the Pledge and Security
Agreement, dated as of August __, 2001 (as amended, restated, supplemented or
otherwise modified from time to time, the "Subsidiary Security Agreement"), in
favor of the Collateral Trustee, (vi) the Parent issued the Senior Notes
pursuant to the Indenture, dated as of August __, 2001 (as amended, restated,
supplemented or otherwise modified from time to time, the "Indenture"), between
the Parent and the Indenture Trustee, and (vii) the Parent entered into the
Pledge and Security Agreement, dated as of August __, 2001, in favor of the
Collateral Trustee (as amended, restated, supplemented or otherwise modified
from time to time, the "Parent Security Agreement"); and
DECLARATION OF TRUST:
Now, therefore, to secure, in accordance with the provisions of the
Secured Debt Instruments and the Collateral Documents, the payment, observance
and performance of the Secured Debt and in consideration of the premises and the
mutual agreements set forth herein, the Collateral Trustee does hereby declare
that it holds or will hold as the Collateral Trustee in trust under this
Agreement all of its right, title and interest in, to and under all the
following (and each Grantor hereby consents thereto) for the benefit of the
Secured Parties:
(A) each Collateral Document and the Collateral granted to the
Collateral Trustee thereunder;
(B) the Pledged Collateral delivered to, and accepted in writing
by, the Collateral Trustee and the accompanying endorsements or instruments
of transfer duly executed in blank;
(C) each agreement or other document entered into and/or
delivered, from time to time, pursuant to Section 5.6, Section 8.1(a),
Section 8.1(b) or Section 8.1(c)
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of this Agreement or pursuant to the terms of the Credit Agreement or the
Collateral Documents and in each case accepted by the Collateral Trustee in
writing, and the Collateral granted to the Collateral Trustee thereunder;
and
(D) the Proceeds of each of the foregoing (collectively with
clauses (A), (B) and (C) above, the "Trust Estate").
TO HAVE AND TO HOLD the Trust Estate unto the Collateral Trustee and
its successors in trust under this Agreement and its assigns and the assigns of
its successors in trust forever.
IN TRUST NEVERTHELESS, under and subject to the terms and conditions
set forth herein and in the other Collateral Documents, and for the benefit of
the Secured Parties and for the enforcement of the payment of all Secured Debt,
and for the performance of and compliance with the covenants and conditions of
the Secured Debt Instruments and each of the Collateral Documents.
PROVIDED, HOWEVER, that these presents are upon the condition that if
all of the conditions set forth in Article VII of this Agreement are satisfied
with respect to all of the Collateral, then this Agreement, and the estates and
rights assigned in the Collateral Documents, shall cease, terminate and be void;
otherwise they shall remain and be in full force and effect.
IT IS HEREBY FURTHER COVENANTED AND DECLARED that the Trust Estate is
to be held and applied by the Collateral Trustee, subject to the further
covenants, conditions and trust hereinafter set forth.
ARTICLE I. Defined Terms
Section 1.1 Definitions.
-----------
(a) Unless otherwise defined herein, terms defined in the Credit
Agreement, the Subsidiary Security Agreement or the Parent Security Agreement
and used herein have the meanings given to them in the Credit Agreement, the
Subsidiary Security Agreement or the Parent Security Agreement, as the case may
be.
(b) The following terms shall have the following meanings:
"Actionable Default" means a Collateral Event of Default which shall
have occurred and be continuing.
"Bankruptcy Code" means Title 11 of the United States Code, 11 U.S.C.
et seq., as the same may be amended from time to time, and any successor statute
thereto.
"Business Day" means a day which is not a Saturday, Sunday or any
other day on which the Collateral Trustee, the Lender or the Indenture Trustee
is not open for business.
"Collateral" means, collectively, "Collateral" as defined in each of
the Collateral Documents and any other property in which the Collateral Trustee
has, or purportedly has, an interest (including, without limitation, a Lien)
from time to time under this Agreement or one or more of the other Collateral
Documents.
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"Collateral Documents" means this Agreement, the Security Documents,
the Mortgages and all other security agreements, pledge agreements, mortgages
(including leasehold mortgages), guaranties and other collateral or related
documents executed and/or delivered by the Grantors and executed and/or
delivered by the Collateral Trustee or accepted by the Collateral Trustee in
writing, as the same may be amended, supplemented or otherwise modified in
accordance with their respective terms and with the terms hereof.
"Collateral Event of Default" means (i) until the payment in full of
the Credit Agreement Obligations, an "Event of Default" as defined in the Credit
Agreement and (ii) from and after the payment in full of the Credit Agreement
Obligations, an "Event of Default" as defined in the Indenture; provided,
however, that any required notice thereof has been given and any grace periods
provided for therein have expired.
"Collateral Trustee" has the meaning given in the introduction to this
Agreement and shall include the Collateral Trustee's successors and assigns
hereunder.
"Collateral Trustee's Fees" means all fees, costs, expenses and other
claims of the Collateral Trustee of the types described in Sections 5.2, 5.3,
5.4 and 5.5 of this Agreement.
"Credit Agreement Obligations" means "Obligations" as defined in the
Credit Agreement.
"Discharge Notice" means a written notice, signed by a Responsible
Officer of the Parent, which requests a discharge of the Collateral Documents in
accordance with the provisions of Section 7.2 of this Agreement and which
certifies to the Collateral Trustee and the Secured Parties that:
(i) One of the events enumerated in Section 7.l(a)(i) or 7.1(a)(ii) of
this Agreement has occurred (specifying which event); and
(ii) No Grantor Default shall exist after, or as a result of, the
release of the Collateral.
"Distribution Dates" means the Business Days fixed by the Collateral
Trustee for the distribution of all moneys held by the Collateral Trustee in the
Collateral Account, the first of which shall occur within thirty (30) days after
the giving of a Notice of Actionable Default which has not theretofore been
withdrawn and the balance of which shall, so long as such Notice of Actionable
Default shall not have been withdrawn, be on the corresponding day in each
calendar week thereafter.
"FNV Capital Collateral" means all Property of FNV Capital, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Collateral Document.
"FNV Capital Stock" means all of the Capital Stock or other equity
interests of FNV Capital.
"Grantor Default" means a default, event of default or unmatured event
of default as defined in any Secured Debt Instrument or any Collateral Document.
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"Indenture Collateral" means the Parent Collateral, except for the
Indenture Excluded Collateral.
"Indenture Excluded Collateral" mean any Property of the Parent
acquired from capital contributions to the Parent, any Proceeds of such Property
and any Property acquired upon the sale, exchange or other dispositions of such
Property or Proceeds.
"Indenture Obligations" means any principal, interest and all other
obligations and liabilities of the Parent (including interest accruing at the
then applicable rate provided in the Indenture after the maturity of the Senior
Notes and interest accruing at the then applicable rate provided in the
Indenture after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Parent,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with the Indenture, the Senior Notes, the Parent Security Agreement or any other
document made, delivered or given in connection therewith, in each case whether
on account of principal, interest, guarantee obligations, fees, indemnities,
costs, expenses or otherwise; provided, however, that "Indenture Obligations"
shall not include the Contingent Interest (as defined in the Indenture).
"Intercompany Note Collateral" means, collectively, the FNV Capital
Collateral and the Subsidiary Collateral.
"Intercompany Note Obligations" means any principal, interest and all
other obligations and liabilities of FNV Capital (including interest accruing at
the then applicable rate provided in the Intercompany Note after the maturity
thereof and interest accruing at the then applicable rate provided in the
Intercompany Note after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
FNV Capital, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), whether absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with the Intercompany Note, the Subsidiary Security Agreement or any
other document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, guarantee obligations, fees,
indemnities, costs, expenses or otherwise.
"Notice of Actionable Default" means a written certification, (i)
until the payment in full of the Credit Agreement Obligations, from the Lender
and (ii) from and after the payment in full of the Credit Agreement, from the
Indenture Trustee, addressed to the Collateral Trustee certifying that an
Actionable Default has occurred with respect to the Secured Debt.
"Parent Collateral" means all Property of the Parent, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Collateral Document.
"Pledged Collateral" means, collectively, "Pledged Collateral" as
defined in each of the Collateral Documents.
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"Release Certificate" means:
(a) with respect to all Collateral (other than the Intercompany Note,
the FNV Capital Stock and the Indenture Excluded Collateral), a certificate, in
form reasonably satisfactory to the Collateral Trustee, executed by (i) until
the payment in full of the Credit Agreement Obligations, a Responsible Officer
of the Lender, and (ii) from and after the payment in full of the Credit
Agreement Obligations, a Responsible Officer of the Parent, which directs or
requests the release of all or a specified portion of the Collateral in
accordance with the provisions of Section 7.4 and which certifies to the
Collateral Trustee that the release is in connection with:
(i) a sale, transfer or disposition of such Collateral to a Person
other than the Parent or a Subsidiary Guarantor for fair market value;
(ii) an incurrence of "Permitted Nonrecourse Indebtedness" (as defined
in the Indenture);
(iii) an incurrence of Indebtedness described in clause (f) of the
definition of "Permitted Indebtedness" (as defined in the Indenture);
(iv) a restructuring, repayment or termination of any Financing
Transactions (as defined in the Indenture) constituting such Collateral;
(v) a use of such Collateral as security for or otherwise in
connection with any Financing Transactions, the terms of which require such
release;
(vi) a lease or sublease of such Collateral to a third party, the
terms of which lease or sublease require such release;
(vii) a settlement of claims against a Grantor;
(viii) if the release is with respect to any Capital Stock or other
equity interests of any Grantor, a merger or consolidation of such Grantor
with or into another Grantor; or
(ix) any transaction determined in good faith by the Board of
Directors of the Parent to be in furtherance of maximizing the ultimate
recovery from the Grantors' asset portfolio; and
(b) with respect to the FNV Capital Stock, a certificate, in form
reasonably satisfactory to the Collateral Trustee, executed by (i) until the
payment in full of the Credit Agreement Obligations, a Responsible Officer of
the Lender, and (ii) from and after the payment in full of the Credit Agreement
Obligations, a Responsible Officer of the Parent, which directs or requests the
release of all or a specified portion of the FNV Capital Stock in accordance
with the provisions of Section 7.4 and which certifies to the Collateral Trustee
that the release is in connection with a sale, transfer or disposition of such
Collateral for fair market value; and
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(c) with respect to the Indenture Excluded Collateral, a certificate,
in form reasonably satisfactory to the Collateral Trustee, executed by a
Responsible Officer of the Lender, which directs the release of all or a
specified portion of the Indenture Excluded Collateral in accordance with the
provisions of Section 7.4 and which certifies to the Collateral Trustee that the
Collateral subject to the release constitutes all or a portion of the Indenture
Excluded Collateral.
Any Release Certificate delivered by the Parent shall also certify
that, as of the date of such release, no Actionable Default has occurred and is
continuing.
"Responsible Officer" means the chief executive officer, president or
chief financial officer.
"Secured Debt" means, collectively, the Credit Agreement Obligations,
the Indenture Obligations, the Intercompany Note Obligations and the Collateral
Trustee's Fees.
"Secured Debt Instruments" means (i) the Loan Documents, (ii) the
Intercompany Note and any other documents and instruments executed in connection
therewith, (iii) the Indenture, the Senior Notes and any other documents and
instruments executed in connection therewith and (iv) [the Collateral Trustee's
Fee Agreement].
"Secured Party" means each of the Lender, the Parent and, on behalf of
each holder of the Notes, the Indenture Trustee.
"Subsidiary Collateral" means all Property of the Subsidiary
Guarantors, now owned or hereafter acquired, upon which a Lien is purported to
be created by any Collateral Document.
Section 1.2 Certain Other Terms.
-------------------
(a) The words "herein," "hereof," "hereto" and "hereunder" and similar
words refer to this Agreement as a whole and not to any particular Article,
Section, subsection or clause in this Agreement.
(b) References herein to an Annex, Schedule, Article, Section,
subsection or clause refer to the appropriate Annex or Schedule to, or Article,
Section, subsection or clause in this Agreement.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) Where the context requires, provisions relating to the Collateral
or any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
(e) Any reference in this Agreement to a Secured Debt Instrument or
Collateral Document shall include all appendices, exhibits and schedules
thereto, and, unless specifically stated otherwise all amendments, restatements,
supplements or other modifications thereto, and as the same may be in effect at
any and all times such reference becomes operative.
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(f) The term "including" means "including without limitation" except
when used in the computation of time periods.
(g) The terms "Berkadia," "Lender," "Indenture Trustee," "Parent,"
"Collateral Trustee" and "Secured Party" include their respective successors.
(h) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect from time to time.
ARTICLE II. Certain Obligations and Duties of the Collateral Trustee
Section 2.1 Authorization to Execute Certain Documents. Each Secured
------------------------------------------
Party hereby authorizes the Collateral Trustee to, and the Collateral Trustee
shall, execute and deliver each of the Collateral Documents requiring execution
and delivery by it, and the Collateral Trustee shall accept delivery from the
Grantors in writing of those Collateral Documents which do not require the
Collateral Trustee's execution; provided, however, that the Collateral Trustee
shall have no duty to execute and deliver, or to accept delivery of, any
Collateral Document that is not satisfactory to it.
Section 2.2 Certain Representations and Warranties. The Collateral
--------------------------------------
Trustee represents and warrants to the Secured Parties as follows:
(a) The Collateral Trustee is a Delaware banking corporation and has
all required corporate power and authority to enter into and perform its
obligations under this Agreement and any other Collateral Document to which it
is or may become a party.
(b) The execution, delivery and performance by the Collateral Trustee
of this Agreement and any other Collateral Document to which it (i) is a party
have been duly authorized by all necessary corporate action on the part of the
Collateral Trustee and (ii) becomes a party will be duly authorized by all
necessary corporate action on the part of the Collateral Trustee.
(c) There are no actions or proceedings pending or, to its knowledge,
threatened against it before any Governmental Authority (A) which question the
validity or enforceability of this Agreement or any other Collateral Document to
which it is a party; or (B) which relate to the banking or trust powers of the
Collateral Trustee and which, if determined adversely to the position of the
Collateral Trustee, would materially and adversely affect the ability of the
Collateral Trustee to perform its obligations under this Agreement or any of the
other Collateral Documents to which it is a party.
(d) This Agreement and all of the other Collateral Documents to which
the Collateral Trustee is a party have been duly executed and delivered by it.
Section 2.3 Actions.
-------
(a) Until the payment in full of the Credit Agreement Obligations and (i) prior
to the Collateral Trustee's receipt of a Notice of Actionable Default or (ii)
after the withdrawal of all pending Notices of Actionable Default in accordance
with the terms of Section 3.1(b) and prior to the Collateral Trustee's receipt
of any additional Notice of Actionable Default, the Collateral Trustee (A) shall
take any action (other than the release of any portion of the
7
Collateral) with respect to the Collateral and the Collateral Documents
requested in writing by the Lender and (B) shall, pursuant to Section 7.4,
release any portion of the Collateral from the Liens created under the
Collateral Documents and take requested actions in connection therewith;
provided, however, that the Collateral Trustee shall not be obligated to take
any such action which is in conflict with the provisions of law or the
Collateral Documents, is prohibited by order of any court or Governmental
Authority or with respect to which the Collateral Trustee has not received
adequate security or indemnity as provided in Section 6.4(d).
(b) From and after the payment in full of the Credit Agreement
Obligations until the payment in full of the Indenture Obligations and (i) prior
to the Collateral Trustee's receipt of a Notice of Actionable Default or (ii)
after the withdrawal of all pending Notices of Actionable Default in accordance
with the terms of Section 3.1(b) and prior to the Collateral Trustee's receipt
of any additional Notice of Actionable Default, the Collateral Trustee (A) shall
take any action (other than the release of any portion of the Collateral) with
respect to the Collateral and the Collateral Documents requested in writing by
the Indenture Trustee and (B) shall, at the request of the Indenture Trustee or
pursuant to Section 7.4, release any portion of the Collateral from the Liens
created under the Collateral Documents and take requested actions in connection
therewith; provided, however, that the Collateral Trustee shall not be obligated
to take any such action which is in conflict with the provisions of law or the
Collateral Documents, is prohibited by order of any court or Governmental
Authority or with respect to which the Collateral Trustee has not received
adequate security or indemnity as provided in Section 6.4(d).
Section 2.4 Limitation on Duties. The Collateral Trustee's sole duty
--------------------
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession shall be to deal with it in the same manner as the
Collateral Trustee deals with similar property for its own account. Neither the
Collateral Trustee, any other Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person (except pursuant to Section
2.3, Article III or Article VII) or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the
Collateral Trustee hereunder are solely to protect the Collateral Trustee's
interest in the Collateral and shall not impose any duty upon the Collateral
Trustee or any other Secured Party to exercise any such powers. The Collateral
Trustee and the other Secured Parties shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
ARTICLE III. Actionable Defaults; Remedies
Section 3.1 Actionable Default.
------------------
(a) Upon receipt of a Notice of Actionable Default, the Collateral
Trustee shall, within five (5) Business Days thereafter, notify each Secured
Party and each Grantor in the manner provided in Section 8.2 of this Agreement
that a Notice of Actionable Default has been received. Upon receipt of any
written directions pursuant to Section 3.2(a) of this Agreement, the Collateral
Trustee shall, within five (5) Business Days thereafter, send a copy thereof to
each Secured Party and each Grantor in the manner provided in Section 8.2 of
this Agreement.
8
(b) The party (or successors in interest thereto) giving a Notice of
Actionable Default shall be entitled, or required if the Actionable Default
shall no longer be continuing, to withdraw it by delivering written notice of
withdrawal to the Collateral Trustee (i) before the Collateral Trustee takes any
action to exercise any remedy with respect to the Collateral or (ii) thereafter
if the Grantors otherwise indemnify the Collateral Trustee and the Secured
Parties (in a manner satisfactory to the Collateral Trustee and the Secured
Parties in their sole discretion) with respect to all costs and expenses
incurred by the Collateral Trustee and the Secured Parties in connection with
reversing all actions the Collateral Trustee or any Secured Party has taken to
exercise any remedy or remedies with respect to the Collateral. The Collateral
Trustee shall immediately notify each Grantor as to the receipt and contents of
any such notice of withdrawal and shall promptly notify each Secured Party, in
the manner provided in Section 8.2 of this Agreement, of the withdrawal of any
Notice of Actionable Default. The failure of the Collateral Trustee to send a
copy or notice required pursuant to this Section 3.1 shall not impair any of the
rights, powers and remedies of the Collateral Trustee under any Collateral
Document.
(c) To the extent that any Notice of Actionable Default shall give
rise to any of the rights and remedies provided in this Agreement or any other
Collateral Document or shall prohibit any Grantor from taking certain actions as
specified herein or therein, such rights and remedies shall be suspended, any
exercise thereof by the Collateral Trustee shall cease, and such prohibition on
the Grantors shall not remain in effect upon receipt by the Collateral Trustee
of written notice of withdrawal of such Notice of Actionable Default pursuant to
the terms and provisions of Section 3.1(b); provided, however, that such rights
and remedies, and such prohibitions, shall be reinstated upon the giving of any
later Notice of Actionable Default.
Section 3.2 Control by Lender and Indenture Trustee.
---------------------------------------
(a) Subject to Section 3.2(b), if the Collateral Trustee shall have
received a Notice of Actionable Default and so long as such Notice of Actionable
Default has not been withdrawn in accordance with the provisions of Section
3.1(b), (i) until the payment in full of the Credit Agreement Obligations, the
Lender, and (ii) from and after the payment in full of the Credit Agreement
Obligations until the payment in full of the Indenture Obligations, the
Indenture Trustee, shall have the right, by an instrument in writing executed
and delivered to the Collateral Trustee, to direct the Collateral Trustee to
exercise, or to refrain from exercising, any right, remedy, trust or power
available to or conferred upon the Collateral Trustee hereunder or under any
Collateral Document and in connection therewith, to direct the time, method and
place of conducting any proceeding for any right or remedy available to the
Collateral Trustee, or of exercising any trust or power conferred on the
Collateral Trustee, or for the appointment of a receiver, or for the taking of
any other action authorized by this Agreement or any Collateral Document;
provided, however, that the Collateral Trustee shall have received adequate
security or indemnity as provided in Section 6.4(d) of this Agreement.
(b) The Collateral Trustee shall not be obligated to follow any
written directions received pursuant to Section 3.2(a) or Section 3.4 of this
Agreement to the extent the Collateral Trustee has received a written opinion of
its counsel, which counsel shall be Strook & Stroock & ▇▇▇▇▇ or shall be other
counsel reasonably satisfactory to the Lender or the Indenture Trustee, as the
case may be, to the effect that such directions are in conflict with any
provisions of law or any applicable Collateral Document or any order of any
court or Governmental Authority; provided, however, under no circumstances shall
the Collateral Trustee be liable for following such written directions of the
Lender or the Indenture Trustee, as the case may be.
9
(c) Nothing in this Section 3.2 shall impair the right of the
Collateral Trustee in its discretion to take or omit to take any action which is
deemed proper by the Collateral Trustee and which it believes in good faith is
not inconsistent with any direction of the Lender or the Indenture Trustee, as
the case may be, delivered pursuant to this Section 3.2; provided, however, the
Collateral Trustee shall not be under any obligation, as a result of this
Section 3.2 or any other provision of this Agreement, to take any action which
is discretionary with the Collateral Trustee under the provisions hereof or
under any other Collateral Document unless so directed by the Lender or the
Indenture Trustee, as the case may be.
Section 3.3 Remedies.
--------
(a) If and only if the Collateral Trustee shall have received a Notice
of Actionable Default and during such time as such Notice of Actionable Default
shall not have been withdrawn in accordance with the provisions of Section
3.1(b), the Collateral Trustee may, and upon the written direction of the Lender
or the Indenture Trustee, as the case may be, pursuant to Section 3.2(a) shall,
exercise the rights and remedies provided in this Agreement and in any other
Collateral Document or under the UCC or other applicable law.
(b) Each Grantor hereby waives presentment, demand, protest or any
notice (to the extent permitted by applicable law and except as otherwise
expressly provided in this Agreement or any other Collateral Document) of any
kind in connection with this Agreement, any other Collateral Document, any
Secured Debt Instrument or any Collateral.
(c) Each Grantor hereby irrevocably constitutes and appoints the
Collateral Trustee and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement or other Collateral Documents, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement and other
Collateral Documents, and, without limiting the generality of the foregoing,
each Grantor hereby gives the Collateral Trustee the power and right, on behalf
of such Grantor, without notice to or assent by such Grantor, to do any or all
of the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Account or General Intangible or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law
or equity or otherwise deemed appropriate by the Collateral Trustee for the
purpose of collecting any and all such moneys due under any Account or
General Intangible or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Collateral Trustee may request to evidence the Collateral
Trustee's security interest in such Intellectual Property and the goodwill
and General Intangibles of such Grantor relating thereto or represented
thereby;
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(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 5.1
of the Subsidiary Security Agreement or Section ___ of the Parent Security
Agreement, any endorsements, assignments or other instruments of conveyance
or transfer with respect to the Collateral; and
(v) (A) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Trustee or as the Collateral Trustee
shall direct; (B) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any Collateral; (C) sign
and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (D) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (E) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (F) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Collateral Trustee may deem
appropriate; (G) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Trademark pertains), throughout
the world for such term or terms, on such conditions, and in such manner,
as the Collateral Trustee may in its sole discretion determine, including
without limitation the execution and filing of any documents necessary to
effectuate and/or record such assignment; and (H) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Collateral
Trustee were the absolute owner thereof for all purposes, and do, at the
Collateral Trustee's option and such Grantor's expense, at any time, or
from time to time, all acts and things which the Collateral Trustee deems
necessary to protect, preserve or realize upon the Collateral and the
Collateral Trustee's and the other Secured Parties' security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. Anything in this Section 3.3(c) to the contrary
notwithstanding, the Collateral Trustee agrees that it will not exercise any
rights under the power of attorney provided for in this Section 3.3(c) unless
the Collateral Trustee has received a Notice of Actionable Default and such
Notice of Actionable Default has not been withdrawn in accordance with the
provisions of Section 3.1(b).
(d) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Trustee, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.
(e) All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created by the Collateral Documents are
released.
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Section 3.4 Right to Initiate Judicial Proceedings, etc. If and only
--------------------------------------------
if the Collateral Trustee shall have received a Notice of Actionable Default and
during such time as such Notice of Actionable Default shall not have been
withdrawn in accordance with the provisions of Section 3.1(b), (i) the
Collateral Trustee shall have the right and power to institute and maintain such
suits and proceedings as it may be directed in writing by the Lender or the
Indenture Trustee pursuant to Section 3.2(a) and (ii) the Collateral Trustee
may, either after entry or without entry, proceed by suit or suits at law or in
equity to enforce such rights to foreclose upon the Collateral and to sell all
or, from time to time, any of the Trust Estate under the judgment or decree of a
court of competent jurisdiction.
Section 3.5 Appointment of a Receiver. If a receiver of the Trust
-------------------------
Estate shall be appointed in judicial proceedings, the Lender or the Indenture
Trustee may be appointed as such receiver. Notwithstanding the appointment of a
receiver, the Collateral Trustee shall, to the extent permitted by law, be
entitled to retain possession and control of all cash held by or deposited with
it or its agents or co-trustees pursuant to any provision of any Collateral
Document.
Section 3.6 Exercise of Powers. All of the powers, remedies and rights
------------------
of the Collateral Trustee as set forth in this Agreement may be exercised by the
Collateral Trustee in respect of any Collateral Document as though set forth at
length therein and all the powers, remedies and rights of the Collateral Trustee
as set forth in any Collateral Document may be exercised from time to time as
herein and therein provided and the indemnities and protections in favor of the
Collateral Trustee provided for herein shall apply to the Collateral Trustee
acting pursuant to any such Collateral Document as if set forth in full therein.
Section 3.7 Remedies Not Exclusive.
----------------------
(a) No remedy conferred upon or reserved to the Collateral Trustee
herein or in the other Collateral Documents is intended to be exclusive of any
other remedy or remedies of the Collateral Trustee, the Lender, the Indenture
Trustee, the holders of the Notes or any other Secured Party, but every such
remedy shall be cumulative and shall be in addition to every other remedy
conferred in any of the Collateral Documents or now or hereafter existing at law
or in equity or by statute.
(b) No delay or omission by the Collateral Trustee in the exercise of
any right, remedy or power accruing upon an Actionable Default shall impair any
such right, remedy or power or shall be construed to be a waiver of any
Actionable Default or an acquiescence therein; and every right, power and remedy
given by any Collateral Document to the Collateral Trustee may be exercised from
time to time and as often as may be deemed expedient by the Collateral Trustee.
(c) In case the Collateral Trustee shall have proceeded to enforce any
right, remedy or power under any Collateral Document and the proceeding for the
enforcement thereof shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Trustee, then and in
every such case the Grantors, the Collateral Trustee and the Secured Parties
shall, subject to any effect of or determination in such proceeding, severally
and respectively be restored to their former positions and rights under the
Collateral Documents with respect to the Trust Estate and in all other respects,
and thereafter all rights, remedies and powers of the Collateral Trustee shall
continue as though no such proceeding had been taken.
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(d) All rights of action and rights to assert claims upon or under the
Collateral Documents may be enforced by the Collateral Trustee without the
possession of any Secured Debt Instrument or the production thereof in any trial
or other proceeding relative thereto, and any such suit or proceeding instituted
by the Collateral Trustee shall be brought in its name as the Collateral Trustee
and any recovery of judgment shall be held as part of the Trust Estate.
Section 3.8 Limitation by Law. All the provisions of this Article III
-----------------
are intended to be subject to all applicable mandatory provisions of law which
may be controlling in the premises and to be limited to the extent necessary so
that they will not render this Agreement invalid or unenforceable in whole or in
part.
Section 3.9 Absolute Rights of Secured Parties. Notwithstanding any
----------------------------------
other provision of any Collateral Document, but subject in all cases to the
rights of the Lender and the Indenture Trustee under Section 3.2, neither (i)
the right of each Secured Party, which is absolute and unconditional, to receive
payments of the Secured Debt held by such Secured Party on or after the due date
thereof as expressed in the Secured Debt Instruments, to institute suit for the
enforcement of such payment on or after such due date, or to assert its position
and views as a secured creditor in, and to otherwise exercise any right (other
than the right to enforce any Lien on the Collateral, which shall in all
circumstances be exercisable only by the Collateral Trustee) it may have in
connection with, a case under the Bankruptcy Code in which a Grantor is a
debtor, nor (ii) the obligation of each Grantor, which is also absolute and
unconditional, to pay the Secured Debt owing by such Grantor to each Secured
Party at the time and place expressed in the Secured Debt Instruments, shall be
impaired or affected without the written consent of such Secured Party.
Section 3.10 Restatement of Rights. The provisions of this Agreement
---------------------
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of Secured Debt is rescinded or must otherwise be returned by
the Collateral Trustee or any Secured Party upon the insolvency, bankruptcy or
reorganization of a Grantor or otherwise, all as though such payment had not
been made.
ARTICLE IV. Priority; Collateral Account; Application of Moneys
Section 4.1 Priority of Security Interests. Notwithstanding (i) the
------------------------------
time, order, manner or method of creation, attachment or perfection of the
respective security interests and/or liens granted to any Secured Party in or on
any or all of the property or assets of the Grantors, (ii) the time or manner of
the filing of the financing statements reflecting such security interests, (iii)
whether any Secured Party or any bailee or agent thereof holds possession of any
or all of the property or assets of the Grantors, (iv) the dating, execution or
delivery of any agreement, document or instrument granting any Secured Party
security interests and/or liens in or on any or all of the property or assets of
the Grantors and (v) any provision of the UCC or any other applicable law to the
contrary, any and all security interests, liens, rights and interests of the
Parent, Indenture Trustee and/or holders of the Senior Notes, whether now or
hereafter arising and howsoever existing, in or on any or all of the Collateral,
shall be and hereby are subordinated to any and all security interests, liens,
rights and interests of the Lender in and to the Collateral. For purposes of the
foregoing allocation of priorities, any claim of a right of setoff shall be
treated in all respects as a security interest and no claimed right of setoff
shall be asserted to defeat or diminish the rights or priorities provided for
herein.
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Section 4.2 The Collateral Account. There has been established by the
----------------------
Collateral Trustee and, at all times hereafter until the trusts created by this
Agreement shall have terminated, there shall be maintained with the Collateral
Trustee at its offices in Wilmington Trust Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, an account which is entitled
the "Collateral Account" (herein called the "Collateral Account"). All moneys
received by the Collateral Trustee with respect to all or any part of the
Collateral between the receipt by the Collateral Trustee of any Notice of
Actionable Default and the withdrawal of all pending Notices of Actionable
Default in accordance with the terms of Section 3.1(b) shall be deposited in the
Collateral Account and thereafter shall be held, applied and/or disbursed by the
Collateral Trustee in accordance with the terms of Section 4.5 of this
Agreement. To the extent not distributed pursuant to the terms of Section 4.5
of this Agreement, all moneys received by the Collateral Trustee with respect to
all or any part of the Collateral between the receipt by the Collateral Trustee
of any Notice of Actionable Default and the withdrawal of all pending Notices of
Actionable Default in accordance with the terms of Section 3.1(b) shall be
delivered to FNV Capital following the withdrawal, if any, of all pending
Notices of Actionable Default in accordance with the terms of Section 3.1(b).
All moneys received by the Collateral Trustee with respect to all or any part of
the Collateral either (i) prior to the Collateral Trustee's receipt of a Notice
of Actionable Default or (ii) after the withdrawal of all pending Notices of
Actionable Default in accordance with the terms of Section 3.1(b) and prior to
the Collateral Trustee's receipt of any additional Notice of Actionable Default,
shall be delivered to FNV Capital.
Section 4.3 Grant of Security Interest; Control of Collateral Account.
---------------------------------------------------------
(a) To secure the prompt and complete payment, when due, of all
amounts owing to the Secured Parties and the Collateral Trustee hereunder and
under the Collateral Documents and the Secured Debt, and the performance by each
Grantor of its covenants and obligations to be performed by it pursuant to the
Secured Debt Instruments and the Collateral Documents, each Grantor hereby
assigns and pledges to the Collateral Trustee for itself hereunder and for the
benefit of the Secured Parties, and grants to the Collateral Trustee for itself
hereunder and for the benefit of the Secured Parties, a security interest in all
of the right, title and interest of such Grantor in and to the following,
whether presently existing or hereafter arising or acquired (the "Trust
Agreement Collateral"): (i) the Collateral Account, all cash deposited therein,
all certificates and instruments, if any, from time to time representing the
Collateral Account, (ii) all investments from time to time made pursuant to
Section 4.4, (iii) all notes, certificates of deposit and other instruments from
time to time hereafter delivered to or otherwise possessed by the Collateral
Trustee in substitution for, or in addition to, any or all of the then existing
Trust Agreement Collateral, (iv) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the then existing Trust Agreement
Collateral and (v) to the extent not covered above, all Proceeds of any and all
collections, earnings and accruals with respect to any or all of the foregoing
(whether the same are acquired before or after the commencement of a case under
the Bankruptcy Code by or against such Grantor, as debtor).
(b) All right, title and interest in and to the Collateral Account
shall vest in the Collateral Trustee, and funds on deposit in the Collateral
Account and other Trust Agreement Collateral shall constitute part of the Trust
Estate. The Collateral Account shall be subject to the exclusive dominion and
control of the Collateral Trustee.
14
Section 4.4 Investment of Funds Deposited in Collateral Account. The
---------------------------------------------------
Collateral Trustee shall invest and reinvest moneys on deposit in the Collateral
Account at any time in one or more Cash Equivalents, in its sole discretion;
provided, however, that in order to provide the Secured Parties and the
Collateral Trustee with a perfected security interest therein:
(a) each such investment shall be evidenced, or deemed under
applicable federal regulations to be evidenced, by negotiable certificates or
instruments or nonnegotiable certificates or instruments issued in the name of
the Collateral Trustee, which (together with any appropriate instruments of
transfer) are delivered to, and held by, the Collateral Trustee or an agent
thereof (which shall not be any Grantor or any of its affiliates); or
(b) each such investment shall be held in the Collateral Account or
other Securities Accounts in the name of the Collateral Trustee, with respect to
which accounts the Collateral Trustee shall be the sole entitlement holder and
the only person authorized to give entitlement orders;
and provided, further, that the maximum amount of the funds held in
the Collateral Account which may be invested in obligations of the types
described in clauses (b), (c) and (d) of the definition of "Cash Equivalents" in
the Credit Agreement of any one issuer shall not exceed the lesser of five
percent (5%) of such funds or $5,000,000. All such investments and the interest
and income received thereon and therefrom and the net proceeds realized on the
sale hereof shall be held in the Collateral Account as part of the Trust Estate.
Section 4.5 Application of Moneys.
---------------------
(a) Subject to Section 4.2, all moneys held by the Collateral Trustee
in the Collateral Account with respect to all of the Indenture Excluded
Collateral shall, to the extent available for distribution, be distributed by
the Collateral Trustee on the first and each succeeding Distribution Date until
the payment in full of the Credit Agreement Obligations as follows:
FIRST: To the Collateral Trustee in an amount equal to the
Collateral Trustee's Fees which are unpaid as of such Distribution Date, and to
any Secured Party which has theretofore advanced or paid any such Collateral
Trustee's Fees in an amount equal to the amount thereof so advanced or paid by
such Secured Party prior to such Distribution Date; provided, however, that
nothing herein is intended to relieve any Grantor of its obligation to pay such
costs, fees, expenses and liabilities from funds outside of the Collateral
Account;
SECOND: To the Lender up to an amount equal to any outstanding Credit
Agreement Obligations; and
THIRD: Any surplus then remaining shall be paid to the Grantors or
their successors or assigns, or to whomever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct; provided, however,
that if any Secured Party with rights in the Indenture Excluded Collateral shall
have notified the Collateral Trustee in writing that such Secured Party is
entitled to the benefits of an indemnification, reimbursement or similar
provision under which amounts are not yet due but with respect to which any
Grantor continues to be contingently liable, and amounts payable by such Grantor
with respect thereto are secured by the Trust Estate, the Collateral Trustee
shall continue to hold the amount specified in such notice in the Collateral
Account until such Grantor's liability with respect thereto is discharged or
released to the satisfaction of such Secured Party.
15
(b) Subject to Section 4.2, all moneys held by the Collateral Trustee
in the Collateral Account with respect to all of the Collateral (except for any
Indenture Excluded Collateral) shall, to the extent available for distribution,
be distributed by the Collateral Trustee on the first and each succeeding
Distribution Date until the payment in full of the Secured Debt as follows:
FIRST: To the Collateral Trustee in an amount equal to the
Collateral Trustee's Fees which are unpaid as of such Distribution Date, and to
any Secured Party which has theretofore advanced or paid any such Collateral
Trustee's Fees in an amount equal to the amount thereof so advanced or paid by
such Secured Party prior to such Distribution Date; provided, however, that
nothing herein is intended to relieve any Grantor of its obligation to pay such
costs, fees, expenses and liabilities from funds outside of the Collateral
Account;
SECOND: To the Lender up to an amount equal to any outstanding Credit
Agreement Obligations;
THIRD: To the Indenture Trustee up to an amount equal to any
outstanding Indenture Obligations; and
FOURTH: Any surplus then remaining shall be paid to the Grantors or
their successors or assigns, or to whomever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct; provided, however,
that if any Secured Party with rights in the Collateral (other than the
Indenture Excluded Collateral) shall have notified the Collateral Trustee in
writing that such Secured Party is entitled to the benefits of an
indemnification, reimbursement or similar provision under which amounts are not
yet due but with respect to which any Grantor continues to be contingently
liable, and amounts payable by such Grantor with respect thereto are secured by
the Trust Estate, the Collateral Trustee shall continue to hold the amount
specified in such notice in the Collateral Account until such Grantor's
liability with respect thereto is discharged or released to the satisfaction of
such Secured Party.
(c) The Secured Parties have agreed and acknowledged that the
provisions of this Section 4.5 are for their benefit and that if any Secured
Party shall receive any moneys contrary to the provisions of this Agreement,
such Secured Party shall forthwith turn such moneys over to the Collateral
Trustee to be distributed in accordance with the provisions of this Agreement.
ARTICLE V. Agreement with Collateral Trustee
Section 5.1 Delivery of Secured Debt Instruments. On the date of this
------------------------------------
Agreement, the Grantors shall deliver to the Collateral Trustee a true and
complete copy of the Credit Agreement, the Indenture, the Intercompany Note, an
executed counterpart of any Collateral Documents and any Pledged Collateral and
other Collateral to be delivered pursuant thereto. Each Grantor agrees that it
will deliver to the Collateral Trustee (i) promptly upon the execution thereof,
a true and complete copy of any and all Secured Debt Instruments, Collateral
Documents and all amendments, modifications or supplements to any Secured Debt
Instrument or Collateral Documents entered into by such Grantor subsequent to
the date of this Agreement and (ii) when required by the Collateral Documents,
any Pledged Collateral or other Collateral to be delivered pursuant thereto.
16
Section 5.2 Compensation and Expenses. The Grantors agree to pay to
-------------------------
the Collateral Trustee (i) the Collateral Trustee's Fees as compensation for the
Collateral Trustee's services hereunder and under the other Collateral Documents
and for administering the Trust Estate as shall be mutually agreed by the
Grantors and the Collateral Trustee and (ii) from time to time, upon demand, all
of the fees, costs and expenses of the Collateral Trustee (including, without
limitation, the reasonable fees and disbursements of its counsel and such
special counsel as the Collateral Trustee elects to retain) (A) arising in
connection with the preparation, execution, delivery, modification, restatement,
amendment or termination of this Agreement and each other Collateral Document or
the enforcement (whether in the context of a civil action, adversary proceeding,
workout or otherwise) of any of the provisions hereof or thereof, or (B)
incurred or required to be advanced in connection with the administration of the
Trust Estate, the sale or other disposition or the custody, preservation or
protection of Collateral pursuant to any Collateral Document (including, without
limitation, in connection with actions taken by the Collateral Trustee pursuant
to Section 3.3) and the exercise or enforcement of the Collateral Trustee's
rights under any Collateral Document and in and to the Collateral and the Trust
Estate. As security for such payment and the payment of the obligations set
forth in Sections 5.3 and 5.4, the Collateral Trustee shall have a Lien prior to
the Secured Debt upon all Collateral and other property and funds held or
collected by the Collateral Trustee as part of the Trust Estate. The obligations
of the Grantors to pay amounts due under this Section 5.2 shall survive the
termination of this Agreement.
Section 5.3 Stamp and Other Similar Taxes. The Grantors agree to
-----------------------------
indemnify and hold harmless the Collateral Trustee and each Secured Party from,
and shall reimburse the Collateral Trustee and each Secured Party for, any
present or future claim for liability for any stamp or other similar tax and any
penalties or interest with respect thereto which may be assessed, levied or
collected by any jurisdiction in connection with any Collateral Document, the
Trust Estate or the attachment or perfection of the security interest granted to
the Collateral Trustee in any Collateral. The obligations of the Grantors under
this Section 5.3 shall survive the termination of the other provisions of this
Agreement.
Section 5.4 Filing Fees, Excise Taxes, etc. The Grantors agree to pay
-------------------------------
or to reimburse the Collateral Trustee for any and all amounts in respect of all
search, filing, recording and registration fees, taxes, excise taxes and other
similar imposts which may be payable or determined to be payable in respect of
the execution, delivery, performance and enforcement of each Collateral Document
and agree to save the Collateral Trustee harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees. The obligations of the Grantors under this Section 5.4
shall survive the termination of the other provisions of this Agreement.
Section 5.5 Indemnification.
---------------
(a) The Grantors agree to pay, and indemnify and hold harmless the
Collateral Trustee and each of its employees and agents from and against, any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, amounts paid in settlements, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of the Collateral Documents, the
Collateral and the Trust Estate, except to the extent arising from the gross
negligence or willful misconduct of the Collateral Trustee or its employees or
such agents as are seeking indemnification. As security for such payment, the
Collateral Trustee shall have a Lien prior to
17
the Secured Debt upon all Collateral and other property and funds held or
collected by the Collateral Trustee as part of the Trust Estate.
(b) In any suit, proceeding or action brought by the Collateral
Trustee under or with respect to the Collateral for any sum owing thereunder, or
to enforce any provisions thereof, or of any of the Collateral Documents, the
Grantors will save, indemnify and keep the Collateral Trustee and the Secured
Parties harmless from and against all expense, loss or damage suffered by reason
of any defense, set-off, counterclaim, recoupment or reduction of liability
whatsoever of the obligee thereunder, arising out of a breach by the Grantors of
any of their respective obligations thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
obligee or its successors from the Grantors, and all such obligations of the
Grantors shall be and remain enforceable against and only against the Grantors
and shall not be enforceable against the Collateral Trustee or any Secured
Party.
(c) If and to the extent that the obligations of the Grantors under
this Section 5.5 are unenforceable for any reason, each Grantor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
(d) The agreements in this Section 5.5 shall survive the termination
of the other provisions of this Agreement.
Section 5.6 Further Assurances. At any time and from time to time,
------------------
upon the written request of the Collateral Trustee, and at the expense of the
Grantors, each Grantor will promptly execute and deliver any and all such
further instruments and documents and take such further action as the Collateral
Trustee may reasonably deem necessary or desirable to obtain the full benefits
of the Collateral Documents and the rights and powers therein granted,
including, without limitation, the filing of any financing or continuation
statements or other instruments to perfect the Liens and security interests
granted thereby. Each Grantor shall, not later than thirty (30) days after the
Collateral Trustee's request therefor, deliver to the Collateral Trustee an
opinion of independent counsel, which counsel shall be reasonably satisfactory
to the Lender and the Indenture Trustee, addressed to the Collateral Trustee for
the benefit of the Secured Parties, concerning the continued perfection of the
Liens and security interests created by the Collateral Documents (excluding,
however, those Liens and security interests which, in accordance with the terms
of the Collateral Documents, have been released); provided, however, that the
Collateral Trustee shall have no obligation at any time to request such opinion
from any Grantor. Each Grantor shall, in all of its published financial
statements customarily prepared with footnotes or filed with the Securities and
Exchange Commission, indicate by footnote or otherwise that the Secured Debt is
secured pursuant to the Collateral Documents.
ARTICLE VI. Collateral Trustee
Section 6.1 Appointment of Collateral Trustee and Acceptance of Trust.
---------------------------------------------------------
The Lender, the Parent and, on behalf of the holders of the Senior Notes, the
Indenture Trustee hereby appoint the Collateral Trustee under the terms and
conditions of this Agreement, and the Collateral Trustee, for itself and its
successors, hereby accepts the trusts created by this Agreement upon the terms
and conditions hereof, including those contained in this Article VI.
18
Section 6.2 Exculpatory Provisions.
----------------------
(a) The Collateral Trustee shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties contained in any of the Collateral Documents, except for those made
by the Collateral Trustee. The Collateral Trustee makes no representations as to
the value or condition of the Trust Estate or any part thereof, or as to the
title of any of the Grantors thereto or as to the security afforded by the
Collateral Documents or, except as expressly set forth in Section 2.2 of this
Agreement, as to the validity, execution, enforceability, legality, perfection,
priority or sufficiency of any Collateral Document or of the Secured Debt
secured thereby, and the Collateral Trustee shall incur no liability or
responsibility in respect of any such matters. The Collateral Trustee shall not
be responsible for insuring, or monitoring or maintaining the insurance on, the
Trust Estate or for the payment of taxes, charges, assessments or Liens upon the
Trust Estate or otherwise as to the maintenance of the Trust Estate, except that
(i) in the event the Collateral Trustee enters into possession of a part or all
of the Trust Estate, the Collateral Trustee shall preserve the part in its
possession, and (ii) the Collateral Trustee will promptly, and at its own
expense, take such action as may be necessary duly to remove and discharge (by
bonding or otherwise) any Lien on any part of the Trust Estate resulting from
claims against it (whether individually or as Collateral Trustee) not related to
the administration of the Trust Estate or (if so related) resulting from gross
negligence or willful misconduct on its part. Notwithstanding anything to the
contrary contained in this Agreement and in furtherance of the immediately
preceding sentence, the Collateral Trustee shall not be responsible for the
attachment, perfection, priority or enforceability of any Lien created or
purported to be created by any Collateral Document, the adequacy, sufficiency or
effectiveness of any Collateral Document or the value of any Collateral granted
pursuant to any Collateral Document from time to time. The Collateral Trustee
shall not be responsible for the filing or recording of any financing statement,
mortgage, security agreement or any other Collateral Document in any public
office or for the maintaining of any records of any such filings or recordings,
nor shall the Collateral Trustee have any duty to file or record, or to advise
the Secured Parties of the need to file or record, any continuation statements
or other public notices relating to the perfection or continued perfection of
any Collateral.
(b) The Collateral Trustee shall not be required to ascertain or
inquire as to the performance by any Grantor of any of the covenants or
agreements contained in any Collateral Document or in any Secured Debt
Instrument. Without limiting the foregoing, the Collateral Trustee shall have no
duty to (i) enforce any obligations of the Grantors to deliver any agreement,
instrument, document, certificate, schedule, list, opinion of counsel or other
items required to be delivered to the Collateral Trustee hereunder, (ii) advise
any Secured Party of the failure of any Grantor to deliver the same or (iii) to
monitor compliance by the Grantors of any requirement to maintain insurance on
any of the Collateral. Whenever it is necessary, or in the opinion of the
Collateral Trustee advisable, for the Collateral Trustee to ascertain the
identity of any Secured Party or the amount of Secured Debt then held by a
Secured Party, the Collateral Trustee may rely on a certificate of such Secured
Party.
(c) Subject to the provisions of applicable law concerning the
Collateral Trustee's duty of care with respect to certificates and notes
evidencing the Pledged Collateral in the Collateral Trustee's possession, the
Collateral Trustee shall not be personally liable for any acts, omissions,
errors of judgment or mistakes of fact or law made, taken or omitted to be made
or taken by it in accordance with any Collateral Document (including, without
limitation, acts,
19
omissions, errors or mistakes with respect to the Collateral), except for those
arising out of or in connection with the Collateral Trustee's gross negligence
or willful misconduct.
Section 6.3 Delegation of Duties. The Collateral Trustee may execute
--------------------
any of the trusts or powers hereof and perform any duty hereunder either
directly or by or through agents, nominees or attorneys-in-fact, which may
include employees or officers of any Grantor, provided that the Collateral
Trustee shall obtain a written acknowledgment from such agents, nominees or
attorneys-in-fact that they shall be liable to the Secured Parties for losses or
damages incurred by any Secured Party as a result of such agent's nominee's or
attorneys-in-fact gross negligence or willful misconduct as and to the extent
the Collateral Trustee would be liable for such losses or damages if the actions
or omissions of such agents, nominees or attorneys-in-fact constituting such
gross negligence or willful misconduct had been actions or omissions of the
Collateral Trustee. The Collateral Trustee shall be entitled to rely on advice
of counsel concerning all matters pertaining to such trusts, powers and duties.
The Collateral Trustee shall not be responsible for any negligence or misconduct
of any agents, nominees or attorneys-in-fact selected by it without gross
negligence or willful misconduct.
Section 6.4 Reliance by Trustee.
-------------------
(a) Whenever in the administration of the trusts of this Agreement the
Collateral Trustee shall deem it necessary or desirable that a matter be proved
or established with respect to any Grantor in connection with the taking,
suffering or omitting of any action hereunder by the Collateral Trustee, such
matter (unless other evidence in respect thereof is herein specifically
prescribed) may be deemed to be conclusively proved or established by a
certificate of a Responsible Officer of such Grantor delivered to the Collateral
Trustee, and such Certificate shall be full warranty to the Collateral Trustee
for any action taken, suffered or omitted in reliance thereon; subject, however,
to the provisions of Section 6.5(b) of this Agreement.
(b) The Collateral Trustee may consult with its counsel, which counsel
shall be Strook & Stroock & ▇▇▇▇▇ or shall be counsel reasonably satisfactory to
the Lender and the Indenture Trustee, accountants or other experts in connection
with the fulfillment of its duties hereunder, and the Collateral Trustee shall
be entitled to rely on, and shall be fully protected in acting upon, the opinion
of such counsel, accountants or other experts in connection with any action
taken, omitted to be taken or suffered by Trustee in fulfillment of its duties
hereunder. The Collateral Trustee shall have the right at any time to seek
instructions concerning the administration of the Trust Estate from any court of
competent jurisdiction.
(c) The Collateral Trustee may rely, and shall be fully protected in
acting, upon any resolution, statement, certificate, instrument, opinion,
report, notice, request consent, order, bond or other paper or document which it
does not in good faith believe to be other than genuine and to have been signed
or presented by the proper party or parties or, in the case of cables,
telecopies and telexes, to have been sent by the proper party or parties in the
absence of its gross negligence or willful misconduct, the Collateral Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Collateral Trustee and conforming to the requirements of any Collateral
Document.
(d) If the Collateral Trustee has been requested or is otherwise
required hereby to take any action pursuant to this Agreement, the Collateral
Trustee shall not be under
20
any obligation to exercise any of the rights or powers vested in the Collateral
Trustee by this Agreement or any Collateral Document or to otherwise take such
action unless the Collateral Trustee shall have been provided adequate security
and indemnity against the costs, expenses and liabilities which may be incurred
by it in compliance with such request or direction or in taking such action,
including such reasonable advances as may be requested by the Collateral
Trustee.
Section 6.5 Limitations on Duties of Trustee.
--------------------------------
(a) The Collateral Trustee shall be obliged to perform only such
duties as are specifically set forth in any Collateral Document, and no implied
covenants or obligations shall be read into any Collateral Document against the
Collateral Trustee. The Collateral Trustee shall, upon receipt of a Notice of
Actionable Default and during such time as such Notice of Actionable Default
shall not have been withdrawn in accordance with the provisions of Section
3.1(b) and unless prevented from doing so by applicable law or by order of a
court or other Governmental Authority, exercise the rights and powers vested in
it by any Collateral Document, and the Collateral Trustee shall not be liable
with respect to any action taken or omitted by it in accordance with the
direction of the Lender or the Indenture Trustee pursuant to Section 3.2 of this
Agreement. If at any time the Collateral Trustee shall seek directions of the
Lender or the Indenture Trustee with respect to any such action to be taken or
omitted by it under any of the Collateral Documents, the Collateral Trustee
shall not be required to take or omit such action until it shall have received
such direction.
(b) Except as herein otherwise expressly provided, including, without
limitation, upon the written direction of the Lender or the Indenture Trustee
pursuant to Section 3.2 of this Agreement, the Collateral Trustee shall not be
under any obligation to take any action which is discretionary with the
Collateral Trustee under the provisions of any Collateral Document. The
Collateral Trustee shall furnish to (i) until the payment in full of the Credit
Agreement Obligations, the Lender and (ii) from and after the payment in full of
the Credit Agreement Obligations, the Indenture Trustee, promptly upon receipt
thereof a copy of each certificate or other paper furnished to the Collateral
Trustee by any Grantor under or in respect of any Collateral Document or any of
the Trust Estate, unless by the express terms of any Collateral Document a copy
of the same is required to be furnished by some other Person directly to the
Lender or the Indenture Trustee, as applicable, or the Collateral Trustee shall
have determined that the same has already been so furnished; provided, however,
that the Collateral Trustee shall have no liability for its inadvertent failure
to furnish any such Person with any such copies.
Section 6.6 Moneys to be Held in Trust. All moneys received by the
--------------------------
Collateral Trustee under or pursuant to any provision of any Collateral Document
shall be held in trust for the purposes for which they were paid or are held.
Section 6.7 Resignation and Removal of the Collateral Trustee.
-------------------------------------------------
(a) The Collateral Trustee may at any time by giving sixty (60) days'
prior written notice to the Grantors and the Secured Parties, resign and be
discharged of the responsibilities hereby created, such resignation to become
effective upon the appointment of a successor Collateral Trustee. The Collateral
Trustee may be removed at any time and a successor Collateral Trustee appointed
by (i) until the payment in full of the Credit Agreement Obligations, the Lender
and (ii) from and after the payment in full of the Credit Agreement Obligations,
the Indenture Trustee; provided, however, that the Collateral Trustee shall be
entitled to its fees and expenses to the date of removal; and, provided,
further, that the Collateral Trustee's rights
21
pursuant to Section 8.5 shall survive with respect to any transaction or
occurrence prior to the effective date of such resignation or removal. If no
successor Collateral Trustee shall be appointed and approved within sixty (60)
days from the date of the giving of the aforesaid notice of resignation or
within sixty (60) days from the date of such removal, the Collateral Trustee
shall, or any Secured Party may, apply to any court of competent jurisdiction to
appoint a successor Collateral Trustee to act until such time, if any, as a
successor Collateral Trustee shall have been appointed as above provided. Any
successor Collateral Trustee so appointed by such court shall immediately and
without further act be superseded by any successor Collateral Trustee approved
by the Lender and the Indenture Trustee as above provided.
(b) If at any time the Collateral Trustee shall resign, be removed or
otherwise become incapable of acting, or if at any time a vacancy shall occur in
the office of the Collateral Trustee for any other cause, a successor Collateral
Trustee may be appointed by (i) until the payment in full of the Credit
Agreement Obligations, the Lender and (ii) from and after the payment in full of
the Credit Agreement Obligations, the Indenture Trustee, and the powers, duties,
authority and title of the predecessor Collateral Trustee terminated and
canceled without procuring the resignation of such predecessor Collateral
Trustee, and without any other formality (except as may be required by
applicable law) than the appointment and designation of a successor Collateral
Trustee in writing, duly acknowledged, delivered to the predecessor Collateral
Trustee and the Grantors, and filed for record in each applicable office, if
any, in which this Agreement is required to be filed. Any successor Collateral
Trustee appointed pursuant to this Section 6.7(b) must be reasonably acceptable
to the Grantors unless at the time of such appointment a Collateral Event of
Default exists.
(c) The appointment and designation referred to in Section 6.7(b) of
this Agreement shall, after any required filing, be full evidence of the right
and authority to make the same and all of the facts therein recited, and this
Agreement shall vest in such successor Collateral Trustee, without any further
act, deed or conveyance, all of the estate and title of its predecessors, and,
upon any required filing for record, the successor Collateral Trustee shall
become fully vested with all the estates, properties, rights, powers, trusts,
duties, authority and title of its predecessors; but any of such predecessors
shall, nevertheless, on the written request of the Lender, the Indenture
Trustee, any Grantor or any successor Collateral Trustee, execute and deliver an
instrument transferring to such successor Collateral Trustee all the estates,
properties, rights, powers, trusts, duties, authority and title of such
predecessor hereunder and shall deliver all securities and moneys held by it to
such successor Collateral Trustee. Should any deed, conveyance or other
instrument in writing from any Grantor be required by any successor Collateral
Trustee for more fully and certainly vesting in such successor Collateral
Trustee the estates, properties, rights, powers, trusts, duties, authority and
title vested or intended to be vested in the predecessor Collateral Trustee, any
and all such deeds, conveyances and other instruments in writing shall, on
request of such successor Collateral Trustee, be so executed, acknowledged and
delivered.
(d) Any required filing for record of the instrument appointing a
successor Collateral Trustee as hereinabove provided shall be at the expense of
the Grantors. The resignation of any Collateral Trustee and the instrument or
instrument removing any Collateral Trustee, together with all other instruments,
deeds and conveyances provided for in this Agreement shall, if required by law,
be forthwith recorded, registered and filed by and at the expense of the
Grantors, wherever this Agreement is recorded, registered and filed.
22
Section 6.8 Status of Successors to the Collateral Trustee. Every
----------------------------------------------
successor to the Collateral Trustee appointed pursuant to Section 6.7 of this
Agreement and every corporation resulting from a merger or consolidation
referred to in Section 6.9 of this Agreement shall be a bank or trust company in
good standing and having power so to act, incorporated under the laws of the
United States or any state thereof or the District of Columbia, and having its
principal corporate trust office within the forty-eight (48) contiguous States,
and shall also have capital, surplus and undivided profits of not less than
$100,000,000.
Section 6.9 Merger of the Collateral Trustee. Any corporation into
--------------------------------
which the Collateral Trustee shall be merged, or with which it shall be
consolidated, or any corporation resulting from any merger or consolidation to
which the Collateral Trustee shall be a party, shall be the Collateral Trustee
under this Agreement without the execution or filing of any paper or any further
act on the part of the parties hereto.
Section 6.10 Additional Co-Trustees; Separate Trustees.
-----------------------------------------
(a) If at any time or times it shall be necessary or prudent in order
to conform to any law of any jurisdiction in which any of the Collateral shall
be located, or the Collateral Trustee shall be advised by counsel, satisfactory
to it, that it is so necessary or prudent in the interest of the Secured
Parties, or the Lender or, from and after the payment in full of the Credit
Agreement Obligations, the Indenture Trustee shall in writing so request, or the
Collateral Trustee shall deem it desirable for its own protection in the
performance of its duties hereunder, the Collateral Trustee and the Grantors
shall execute and deliver all instruments and agreements necessary or proper to
constitute another bank or trust company, or one or more Persons approved by the
Collateral Trustee and the Grantors either to act as co-trustee or co-trustees
of all or any of the Collateral, jointly with the Collateral Trustee originally
named herein or any successor or successors, or to act as separate trustee or
trustees of any such property. Notwithstanding the foregoing sentence, the
Collateral Trustee shall not be responsible for ascertaining whether or not it
is at any time necessary or prudent to constitute another bank or trust company
or any other Person(s) to act as co-trustee or a separate trustee. In the event
the Grantors shall not have joined in the execution of such instruments and
agreements within ten (10) days after the receipt of a written request from the
Collateral Trustee so to do, or in case a Notice of Actionable Default shall
have been given and not withdrawn, the Collateral Trustee may act under the
foregoing provisions of this Section 6.10 without the concurrence of the
Grantors and each Grantor hereby irrevocably appoints the Collateral Trustee as
its agent and attorney to act for it under the foregoing provisions of this
Section 6.10 in either of such contingencies.
(b) Every separate trustee and every co-trustee, other than any
trustee which may be appointed as successor to Wilmington Trust Company, as
Collateral Trustee, shall, to the extent permitted by law, be appointed and act
and be such, subject to the following provisions and conditions, namely:
(i) all rights, powers, duties and obligations conferred upon the
Collateral Trustee in respect of the custody, control and management of
moneys, papers or securities shall be exercised solely by Wilmington Trust
Company, as Collateral Trustee, or its successors as the Collateral Trustee
hereunder,
(ii) all rights, powers, duties and obligations conferred or imposed
upon the Collateral Trustee hereunder shall be conferred or imposed and
exercised or performed by the Collateral Trustee and such separate trustee
or separate trustees or co-trustee or co-trustees,
23
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Collateral Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations shall be exercised and performed by
such separate trustee or separate trustees or co-trustee or co-trustees;
(iii) no power (i) given hereby to any co-trustee, co-trustees or
separate trustees, or (ii) which is provided hereby to any co-trustee,
co-trustees or separate trustees, may be exercised by any such co-trustee
or co-trustees or separate trustees, except jointly with, or with the
consent in writing of, the Collateral Trustee, anything herein contained in
the contrary notwithstanding;
(iv) no trustee or co-trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee or co-trustee hereunder;
and
(v) the Grantors and the Collateral Trustee, at any time by an
instrument in writing, executed by them jointly, may accept the resignation
of or remove any such separate trustee or co-trustee, and in that case, by
an instrument in writing executed by the Grantors and the Collateral
Trustee jointly, may appoint a successor to such separate trustee or
co-trustee, as the case may be, anything herein contained to the contrary
notwithstanding. In the event that the Grantors shall not have joined in
the execution of any such instrument within ten (10) days after the receipt
of a written request from the Collateral Trustee so to do, or in case a
Notice of Actionable Default shall have been given and not withdrawn, the
Collateral Trustee shall have the power to accept the resignation of or
remove any such separate trustee or co-trustee and to appoint a successor
without the concurrence of the Grantors, each of the Grantors hereby
irrevocably appointing the Collateral Trustee, its agent and attorney to
act for it in such connection in either of such contingencies. In the event
that the Collateral Trustee shall have appointed a separate trustee or
separate trustees or co-trustee or co- trustees as above provided, it may
at any time, by an instrument in writing, accept the resignation of or
remove any such separate trustee or co-trustee, the successor to any such
separate trustee or co-trustee to be appointed by the Grantors and the
Collateral Trustee, or by the Collateral Trustee alone, as hereinabove
provided in this Section 6.10.
ARTICLE VII. Release of Collateral
Section 7.1 Conditions to Release.
---------------------
(a) Subject to Section 7.1(c), all of the Indenture Excluded
Collateral shall be released upon the earlier of the dates set forth in clauses
(i) and (ii) below:
(i) the date on which (A) all of the Credit Agreement Obligations
shall have been paid in full and (B) accrued and unpaid Collateral
Trustee's Fees shall have been paid in full; or
(ii) the date on which (A) the Collateral Trustee shall have received
written instructions from the Lender instructing the Collateral Trustee to
release the Collateral and (B) accrued and unpaid Collateral Trustee's Fees
shall have been paid in full.
24
(b) Subject to Section 7.1(c), from and after the payment in full of
the Credit Agreement Obligations, all of the Collateral, to the extent not
already released pursuant to this Agreement, shall be released upon the earlier
of the dates set forth in clauses (i) and (ii) below:
(i) the date on which (A) all of the Indenture Obligations shall have
been paid in full and (B) accrued and unpaid Collateral Trustee's Fees
shall have been paid in full; or
(ii) the date on which (A) the Collateral Trustee shall have received
written instructions from the Indenture Trustee instructing the Collateral
Trustee to release the Collateral and (B) accrued and unpaid Collateral
Trustee's Fees shall have been paid in full.
(c) On the dates referred to in Section 7.1(a) or Section 7.1(b)
above, no Collateral shall be released unless and until no Grantor Default would
exist after, or as a result of, the release of such Collateral. For purposes of
this Section 7.l(c), the Collateral Trustee may conclusively presume that the
release of the Collateral complies with the requirement of this Section 7.1(c)
if the Collateral Trustee has received a written confirmation of the type
described in Section 7.2(a).
(d) Notwithstanding anything to the contrary contained herein, the
Collateral Trustee shall take any action, including the release of all or any
portion of the Collateral, required pursuant to Section 2.3 or Section 7.4.
Section 7.2 Procedure for Release.
---------------------
(a) Upon the occurrence of the events specified in either Section
7.1(a) or Section 7.1(b), the Grantors shall deliver a Discharge Notice to the
Collateral Trustee (with a copy thereof given pursuant to Section 8.2 of this
Agreement to each Secured Party). Upon receipt by the Collateral Trustee of a
Discharge Notice certifying that events set forth in Section 7.1(a)(i) above
have occurred, the Collateral Trustee shall forthwith request the Lender to
confirm in writing that the events described in Section 7.l(a)(i)(A) have
occurred. Upon receipt by the Collateral Trustee of a Discharge Notice
certifying that events set forth in Section 7.1(b)(i) above have occurred, the
Collateral Trustee shall forthwith request the Indenture Trustee to confirm in
writing that the events described in Section 7.l(b)(i)(A) have occurred.
(b) Upon receipt of the written confirmation from the Lender or the
Indenture Trustee required by Section 7.2(a) or a Discharge Notice stating that
the events described in Section 7.1(a)(ii) or Section 7.1(b)(ii) have occurred,
the Collateral Trustee shall, to the extent requested by the Grantors, take the
actions set forth in Section 7.3 of this Agreement.
(c) Until the Collateral Trustee receives (i) the written confirmation
from the Lender or the Indenture Trustee required by Section 7.2(a) and confirms
that the events described in Section 7.1(a)(i)(B) or Section 7.1(b)(i)(B) have
occurred or (ii) confirms that the events described in Section 7.1(a)(ii) or
Section 7.1(b)(ii) have occurred, the Collateral will not be released unless the
Collateral Trustee shall have received a final order of a court of competent
jurisdiction directing it to release the Collateral because the conditions to
the release of the Collateral, specified in Section 7.l(a) or Section 7.1(b) of
this Agreement, have been satisfied.
25
Section 7.3 Effective Time of Release.
-------------------------
(a) The release of Collateral (i) in connection with the events
specified in Section 7.l(a)(i) of this Agreement shall be effective upon the
receipt by the Collateral Trustee of the written confirmation from the Lender
and the Indenture Trustee required by Section 7.2(a) or upon the occurrence of
the events set forth in Section 7.2(c) of this Agreement and (ii) in connection
with the events specified in Section 7.l(a)(ii) of this Agreement shall be
effective upon confirmation by the Collateral Trustee of the Discharge Notice or
upon the occurrence of the events set forth in Section 7.2(c) of this Agreement.
The Collateral Trustee shall promptly notify the Grantors and the Secured
Parties, in the manner specified in Section 8.2 of this Agreement, when the
release of the Collateral is effective.
(b) When the release of all of the Collateral is effective, all right,
title and interest of the Collateral Trustee in, to and under the Trust Estate
shall terminate and shall revert to the Grantors or their respective successors
and assigns, and the estate, right, title and interest of the Collateral Trustee
therein shall thereupon cease, terminate and become void except with respect to
those provisions of this Agreement that expressly survive. In such case, each
Grantor at its sole cost and expense shall deliver to the Collateral Trustee one
or more instruments of discharge, satisfaction and release in form reasonably
satisfactory to the Collateral Trustee, and, upon the written request of a
Grantor or its successors or assigns, and at the cost and expense of such
Grantor or its successors or assigns, the Collateral Trustee shall execute a
satisfaction of the Collateral Documents and such instruments as are necessary
or desirable to terminate and remove of record any documents constituting public
notice of the Collateral Documents and the Liens and assignments granted
thereunder and shall assign and transfer, or cause to be assigned and
transferred, and shall deliver or cause to be delivered to the Grantors, all
property, including all moneys, instruments and securities of the Grantors, then
held by the Collateral Trustee. The cancellation and satisfaction of the
Collateral Documents shall be without prejudice to the rights of the Collateral
Trustee or any successor Collateral Trustee to charge and be reimbursed for any
expenditures which it may thereafter incur in connection therewith.
Section 7.4 Release of Specified Collateral. Prior to the Collateral
-------------------------------
Trustee's receipt of a Notice of Actionable Default or after the withdrawal of
all pending Notices of Actionable Default in accordance with the terms of
Section 3.1(b) and prior to the Collateral Trustee's receipt of any additional
Notice of Actionable Default, to the extent that the Collateral Trustee receives
a Release Certificate with respect to all or specified portions of the
Collateral, all right, title and interest of the Collateral Trustee in, to and
under such Collateral and the security interest of the Collateral Trustee
therein shall terminate and shall revert to the appropriate Grantor or its
successors and assigns, and the estate, right, title and interest of the
Collateral Trustee therein shall thereupon cease, terminate and become void.
Upon receipt of such direction or certificate, the Collateral Trustee shall, at
the Grantors' sole cost and expense, execute such instruments and take such
other actions as are necessary or desirable to terminate any such security
interest and otherwise effectuate the release of the specified portions of the
Collateral from the Lien of such security interest. Such termination and
release shall be without prejudice to the rights of the Collateral Trustee or
any successor Collateral Trustee to charge and be reimbursed for any
expenditures which it may thereafter incur in connection therewith. Upon
receipt of a Release Certificate, the Collateral Trustee shall, within five (5)
days thereafter, notify the Indenture Trustee in the manner provided in Section
8.2 of this Agreement.
26
ARTICLE VIII. Miscellaneous
Section 8.1 Amendments, Supplements and Waivers.
-----------------------------------
(a) Subject to Sections 8.1(b) and 8.1(c), with the prior written
consent of (x) until the payment in full of the Credit Agreement Obligations,
the Lender and (y) from and after the payment in full of the Credit Agreement
Obligations, the Indenture Trustee, the Collateral Trustee and the Grantors may,
from time to time, enter into written agreements supplemental hereto for the
purpose of adding to or waiving any provisions of any of the Collateral
Documents or amending the definition of any capitalized term used herein or
therein, as such capitalized term is used herein or therein, or changing in any
manner the rights of the Collateral Trustee, the Secured Parties or the Grantor
hereunder or thereunder; provided, however, that no such supplemental agreement
shall:
(i) amend, modify or waive any provision of this Section 8.1 without
the written consent of (A) until the payment in full of the Credit
Agreement Obligations, each of the Lender and the Indenture Trustee and (B)
from and after the payment in full of the Credit Agreement Obligations, the
Indenture Trustee;
(ii) amend, modify or waive any provision of this Section 8.1(a)(ii),
Section 2.3, Section 4.5, Article VII or the definition of the terms
"Indenture Collateral," "Indenture Excluded Collateral," "Intercompany Note
Collateral," "Release Certificate" or "Secured Debt" without the written
consent of any Secured Party whose rights would be adversely affected
thereby; provided, however, that this clause (ii) shall not apply to any
such amendment or modification which only adds to the definition of Secured
Debt additional obligations of the Grantors subordinated to the rights of
the Parent, Indenture Trustee and/or holders of the Senior Notes at least
to the same extent the Parent, Indenture Trustee and/or holders of the
Senior Notes are subordinated to the rights of the Lender pursuant to this
Agreement; or
(iii) amend, modify or waive any provision of any Collateral Document
so as to adversely affect any of the Collateral Trustee's rights,
immunities or indemnities hereunder or thereunder or enlarge its duties
hereunder or thereunder, without the prior written consent of the
Collateral Trustee.
Any such supplemental agreement shall be binding upon the Grantors,
the Secured Parties and the Collateral Trustee and their respective successors
and assigns. The Collateral Trustee shall not enter into any such supplemental
agreement unless it shall have received a certificate signed by a Responsible
Officer of the Grantors to the effect that such supplemental agreement will not
result in a breach of any provision or covenant contained in the Credit
Agreement or the Indenture. Prior to executing any amendment or waiver pursuant
to the terms of this Section 8.1(a), the Collateral Trustee shall be entitled to
receive an opinion of counsel to the effect that the execution of such document
is authorized hereunder.
(b) Without the consent of the Lender, the Indenture Trustee or any
Secured Party, the Grantors and the Collateral Trustee, at any time and from
time to time, may enter into additional Collateral Documents or one or more
agreements supplemental hereto or to any other Collateral Document, in form
satisfactory to the Collateral Trustee:
27
(i) to add to the covenants of the Grantors for the benefit of the
Secured Parties;
(ii) to mortgage, pledge or grant a security interest in favor of the
Collateral Trustee, for itself hereunder and for the ratable benefit of the
Secured Parties, as additional security for the Secured Debt pursuant to
any Collateral Document; or
(iii) to cure any ambiguity, or to correct or supplement any provision
herein or in any other Collateral Document which may be defective or
inconsistent with any other provision herein or therein; provided, however,
that any such action contemplated in this clause (iii) shall not adversely
affect the interests of the Secured Parties in any manner whatsoever.
(c) Without the consent of the Lender, the Indenture Trustee or any
Secured Party, the Grantors and the Collateral Trustee may, at any time and from
time to time add the Additional Grantors or other Persons as Grantors to this
Agreement or any of the other Collateral Documents, and such additional
provisions hereto and thereto as may be necessary or appropriate to effect the
grant by such Additional Grantors and Persons of Liens on any assets of such
Additional Grantors or Persons as additional security for the Secured Debt.
(d) All such amendments, supplemental agreements, modifications and
waivers shall be in writing and executed by the parties required to consent
thereto. Any such amendment. supplemental agreement, modification or waiver
shall be effective only in the specific instance and for the specific purpose
for which made or given.
(e) Notwithstanding anything in this Agreement to the contrary, no
provisions of this Agreement and no other Collateral Documents may be modified,
amended, supplemented or waived if such modification, amendment supplement or
waiver shall result in the release of any Collateral, except in accordance with
Section 2.3 and Article VII of this Agreement as in effect of the date hereof.
Section 8.2 Notices.
-------
(a) All notices, requests, demands and other communications provided
for or permitted hereunder shall be in writing (including telecopy
communication), shall be sent by mail, telecopier or hand delivery and, except
as otherwise provided in this Agreement the cost thereof shall be for the sole
account of the Grantors and shall be added to the Secured Debt:
(i) if to any Grantor, c/o the Parent, at:
The FINOVA Group Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Telecopy: ____________________
(ii) if to the Collateral Trustee, at:
Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to Berkadia, at:
Berkadia LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(iv) if to the Indenture Trustee, at:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) All such notices, requests, demands and communications, shall, to
be effective hereunder, be in writing or by a telecommunications device capable
of creating a written record and shall be deemed to have been given or made when
delivered by hand or five (5) days after its deposit in the mail, first class or
air postage prepaid (except that any notice to the Grantors by mail that an
Actionable Default has occurred or given by the Grantors pursuant to Section 7.2
shall be sent by registered or certified mail) or in the case of notice by such
a telecommunication device, when properly transmitted; provided, however, that
any notice, request, demand or other communication to the Collateral Trustee
shall not be effective until received.
Section 8.3 Dealings with Grantors.
----------------------
(a) Upon any application or demand by any Grantor to the Collateral
Trustee to take or permit any action under any of the provisions of any
Collateral Document, such Grantor shall furnish to the Collateral Trustee a
certificate signed by a Responsible Officer of such Grantor and, if requested by
the Collateral Trustee, an opinion of counsel to the Grantor stating that all
conditions precedent, if any, provided for in any Collateral Document relating
to the proposed action have been complied with, except that in the case of any
such application or demand as to which the furnishing of such documents is
specifically required by any provision of any Collateral Document, relating to
such particular application or demand no additional certificate or opinion need
be furnished.
(b) Any opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate of Responsible Officers of any Grantor
delivered to the Collateral Trustee.
Section 8.4 Claims Against the Collateral Trustee. Any claims or
-------------------------------------
causes of action which the Secured Parties or the Grantors shall have against
the Collateral Trustee shall survive the termination of this Agreement and the
release of the Collateral hereunder.
29
Section 8.5 Successors and Assigns. This Agreement shall be binding
----------------------
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Collateral Trustee and each Secured Party and their successors and
assigns, and nothing herein or in any other Collateral Document is intended or
shall be construed to give any other Person any right, remedy or claim under, to
or in respect of any Collateral Documents, the Collateral or the Trust Estate;
provided, however, that no Grantor may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the Collateral Trustee.
Section 8.6 Counterparts. This Agreement may be executed by one or
------------
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same agreement.
Section 8.7 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 8.8 Section Headings. The Article and Section titles contained
----------------
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not part of the agreement of the parties hereto.
Section 8.9 Conflict with other Agreements. The parties agree that in
------------------------------
the event of any conflict between the provisions of this Agreement and the
provisions of any of the other Collateral Documents the provisions of this
Agreement shall control.
Section 8.10 Governing Law. THE PROVISIONS OF THIS AGREEMENT CREATING
-------------
A TRUST FOR THE BENEFIT OF THE SECURED PARTIES AND SETTING FORTH THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE COLLATERAL TRUSTEE HEREUNDER AND
ALL OTHER PROVISIONS HEREOF SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK, EXCEPT WITH RESPECT TO THE PERFECTION AND
ENFORCEMENT OF SECURITY INTERESTS AND LIENS IN OTHER JURISDICTIONS, WHICH SHALL
BE GOVERNED BY THE LAWS OF THOSE JURISDICTIONS.
Section 8.11 Consent to Jurisdiction; Waiver of Jury Trial. Each
---------------------------------------------
Grantor hereby irrevocably submits to the nonexclusive jurisdiction of any
United States Federal or New York State court sitting in New York City in any
action or proceeding arising out of or relating to this Agreement or any other
Collateral Document, and each Grantor hereby irrevocably agrees that all claims
in respect of such action or proceeding may be heard and determined in any such
United States Federal or New York State court and each Grantor irrevocably
waives any objection, including, without limitation, any objection to the laying
of venue or based on the grounds of forum non conveniens which it may now or
hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions. As a method of service, each Grantor also irrevocably
consents to the service of any and all process in any such actions or proceeding
brought in any court in or of the State of New York by the delivery of copies of
such process to such Grantor, at its address specified in Section 8.2 or by
certified mail direct to such address, such service to be effective upon such
delivery or 5 days after such mailing. EACH GRANTOR AND THE COLLATERAL TRUSTEE
HEREBY WAIVES ALL RIGHT TO A JURY TRIAL
30
IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
COLLATERAL DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
31
In witness whereof, each of the undersigned has caused this Collateral
Trust Agreement to be duly executed and delivered as of the date first above
written.
[Grantors]
By:________________________________
Name:
Title:
BERKADIA LLC
By:________________________________
Name:
Title:
THE BANK OF NEW YORK, as the Indenture Trustee
By:________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as the Collateral
Trustee
By:________________________________
Name:
Title:
32
PLEDGE AND SECURITY AGREEMENT
Dated as of _____________ __, 2001
among
FINOVA Capital Corporation and Each Other Grantor
From Time to Time Party Hereto
and
______________________
as Collateral Agent
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
TABLE OF CONTENTS
Page
----
ARTICLE I. Defined Terms...................................... 2
Section 1.1 Definitions........................................ 2
Section 1.2 Certain Other Terms................................ 7
ARTICLE II. Grant of Security Interest......................... 8
Section 2.1 Collateral......................................... 8
Section 2.2 Grant of Security Interest in Collateral........... 9
Section 2.3 Cash Collateral Accounts........................... 9
ARTICLE III. Representations And Warranties..................... 10
Section 3.1 Title; No Other Liens.............................. 10
Section 3.2 Perfection and Priority............................ 10
Section 3.3 State of Incorporation; Chief Executive Office..... 10
Section 3.4 Inventory and Equipment............................ 10
Section 3.5 Pledged Collateral................................. 10
Section 3.6 Accounts........................................... 11
Section 3.7 No Other Names..................................... 11
Section 3.8 Intellectual Property.............................. 11
Section 3.9 Deposit Accounts; Control Accounts................. 12
ARTICLE IV. Covenants.......................................... 2
Section 4.1 Generally.......................................... 12
Section 4.2 Maintenance of Perfected Security Interest; Further
Documentation...................................... 12
Section 4.3 Changes in Locations, Name, Etc.................... 13
Section 4.4 Pledged Collateral................................. 13
Section 4.5 Control Accounts; Deposit Accounts................. 14
Section 4.6 Delivery of Instruments and Chattel Paper.......... 15
Section 4.7 Intellectual Property.............................. 15
Section 4.8 Vehicles........................................... 17
Section 4.9 Insurance.......................................... 17
Section 4.10 Special Property................................... 17
ARTICLE V. Remedial Provisions................................ 17
Section 5.1 Code and Other Remedies............................ 17
Section 5.2 Accounts and Payments in Respect of General
Intangibles........................................ 18
i
TABLE OF CONTENTS
(continued)
Page
----
Section 5.3 Pledged Collateral................................. 19
Section 5.4 Proceeds to be Turned Over To Collateral Agent..... 20
Section 5.5 Deficiency......................................... 20
Section 5.6 Execution of Financing Statements.................. 20
ARTICLE VI. Miscellaneous...................................... 20
Section 6.1 Amendments in Writing.............................. 20
Section 6.2 Notices............................................ 20
Section 6.3 No Waiver by Course of Conduct; Cumulative Remedies 20
Section 6.4 Successors and Assigns............................. 20
Section 6.5 Counterparts....................................... 21
Section 6.6 Severability....................................... 21
Section 6.7 Section Headings................................... 21
Section 6.8 Entire Agreement................................... 21
Section 6.9 Governing Law...................................... 21
Section 6.10 Additional Grantors................................ 21
Section 6.11 Reinstatement...................................... 21
Section 6.12 Security Interest Absolute......................... 21
ii
PLEDGE AND SECURITY AGREEMENT
Pledge and Security Agreement, dated as of August __, 2001 (this
"Agreement"), by FINOVA CAPITAL CORPORATION (the "Borrower") and each of the
other entities listed on the signature pages hereof or which becomes a party
hereto pursuant to Section 6.10 (each of such entities and the Borrower a
"Grantor" and, collectively, the "Grantors"), in favor of _____________, as
collateral agent for the Secured Parties (in such capacity, the "Collateral
Agent").
W i t n e s s e t h:
Whereas, pursuant to the Credit Agreement, dated as of August __, 2001
(as the same may be amended, restated, supplemented or otherwise modified from
time t o time, the "Credit Agreement") between Berkadia LLC (the "Lender") and
the Borrower, the Lender has agreed to make a single term loan in the principal
amount of up to $6 billion dollars to the Borrower upon the terms and subject to
the conditions set forth therein; and
Whereas, the Borrower has issued a promissory note, of even date
herewith (the "Parent Intercompany Note") to The FINOVA Group Inc. (the
"Parent"); and
Whereas, the Borrower, the Lender, the Parent, the Trustee (as defined
below) and the Collateral Agent are parties to a Collateral Trust Agreement; and
Whereas, the Grantors other than the Borrower are party to the
Subsidiary Guaranty, pursuant to which they have guaranteed the Secured
Obligations; and
Whereas, it is a condition precedent to the obligation of the Lender
to make the term loan to the Borrower under the Credit Agreement and the Parent
to accept the Parent Intercompany Note that each of the Grantors shall have
executed and delivered this Agreement to the Collateral Agent;
Now, therefore, in consideration of the premises each Grantor hereby
agrees with the Collateral Agent as follows:
ARTICLE I. Defined Terms
Section 1.1 Definitions.
-----------
(a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein have the meanings given to them in the Credit
Agreement.
(b) Terms used herein that are defined in the UCC have the meanings
given to them in the UCC, including the following which are capitalized herein:
"Account Debtor"
"Accounts"
"Chattel Paper"
["Commercial Tort Claim (if any)"]
"Commodity Account"
"Commodity Intermediary"
1
"Control"
"Deposit Accounts"
"Documents"
"Entitlement Holder"
"Entitlement Order"
"Equipment"
"Financial Asset"
"General Intangibles"
"Instruments"
"Inventory"
"Investment Property"
"Letter of Credit Rights"
"Payment Intangible"
"Proceeds"
"Security"
"Securities Account"
"Securities Intermediary"
"Security Entitlement"
(c) The following terms shall have the following meanings:
"Additional Pledged Collateral" means all shares of, limited and/or
general partnership interests in, and limited liability company interests in,
and all securities convertible into, and warrants, options and other rights to
purchase or otherwise acquire, stock of, or partnership interests in or limited
liability company interests in, either (i) any Person that, after the date of
this Agreement, as a result of any occurrence, becomes a direct Subsidiary of
any Grantor or (ii) any issuer of Pledged Stock, any Partnership or any LLC that
is acquired by any Grantor after the date hereof; all certificates or other
instruments representing any of the foregoing; all Security Entitlements of any
Grantor in respect of any of the foregoing; all additional indebtedness from
time to time owed to any Grantor by any obligor on the Pledged Notes and the
instruments evidencing such indebtedness; and all interest, cash, instruments
and other property or Proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
foregoing. Additional Pledged Collateral may be General Intangibles or
Investment Property.
"Agreement" means this Pledge and Security Agreement.
"Approved Deposit Account" means a Deposit Account maintained by any
Grantor with a Deposit Account Bank which account is the subject of an effective
Deposit Account Control Agreement, and includes all monies on deposit therein
and all certificates and instruments, if any, representing or evidencing such
Approved Deposit Account.
"Approved Securities Intermediary" means a Securities Intermediary or
Commodity Intermediary selected or approved by the Collateral Agent and with
respect to which a Grantor has delivered to the Collateral Agent an executed
Control Account Agreement.
"Cash Collateral Account" means any Deposit Account or Securities
Account established by the Collateral Agent as provided in Section 2.3 in which
cash and Cash Equivalents may from time to time be on deposit or held therein as
provided in Section 5.2 or 5.4.
2
"Collateral" has the meaning specified in Section 2.1.
"Control Account" means a Securities Account or Commodity Account
maintained by any Grantor with an Approved Securities Intermediary which account
is the subject of an effective Control Account Agreement, and includes all
Financial Assets held therein and all certificates and instruments, if any,
representing or evidencing the Financial Assets contained therein.
"Control Account Agreement" means a letter agreement, substantially in
the form of Annex 2 (with such changes as may be agreed to by the Collateral
Agent), executed by the relevant Grantor, the Collateral Agent and the relevant
Approved Securities Intermediary.
"Copyrights" means (a) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof and (b)
the right to obtain all renewals thereof.
"Copyright Licenses" means any written agreement naming any Grantor as
licensor or licensee granting any right under any Copyright, including the grant
of rights to copy, publicly perform, create derivative works, manufacture,
distribute, exploit and sell materials derived from any Copyright.
"Credit Agreement Obligations" means the Obligations.
"Deposit Account Bank" means a financial institution approved by the
Lender and with respect to which a Grantor has delivered to the Collateral Agent
an executed Deposit Account Control Agreement.
"Deposit Account Control Agreement" means a letter agreement,
substantially in the form of Annex 1 (with such changes as may be agreed to by
the Collateral Agent), executed by the relevant Grantor, the Collateral Agent
and the relevant Deposit Account Bank.
"Domestic Subsidiary" means any Subsidiary of any Grantor incorporated
or organized under the laws of the United States, any state thereof or the
District of Columbia.
"Excluded Property" means Special Property other than the following:
(a) the right to receive any payment of money (including, without
limitation, general intangibles for money due or to become due) or any
other rights referred to in Sections 9-406(f), 9-407(a) or 9-408(a) of the
UCC; and
(b) any proceeds, products, offspring, accessions, rents, profits,
income, benefits, substitutions or replacements of any Special Property
(unless such proceeds, products, offspring, accessions, rents, profits,
income, benefits, substitutions or replacements itself would constitute
Special Property).
"Guaranty Obligations" means the obligations of each Grantor other
than the Borrower under the Subsidiary Guaranty.
3
"Intellectual Property" means, collectively, all rights, priorities
and privileges of any Grantor relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and trade secrets, and all rights to ▇▇▇ at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
"Intercompany Note" means any promissory note evidencing loans made by
any Grantor to any of its Subsidiaries or another Grantor.
"LLC" means each limited liability company in which a Grantor has an
interest, including those set forth on Schedule 2.
"LLC Agreement" means each operating agreement with respect to an LLC,
as each agreement has heretofore been and may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Material Intellectual Property" means Intellectual Property owned by
or licensed to a Grantor which is material to its business.
"Parent Intercompany Note Borrower Obligations" means collectively,
the unpaid principal of and interest on the Parent Intercompany Note and all
other obligations and liabilities of the Borrower (including interest accruing
at the then applicable rate provided in the Parent Intercompany Note after the
maturity thereof and interest accruing at the then applicable rate provided
therein after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to the Parent, whether absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with the Parent Intercompany Note any other Loan Document, or any
other document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, guarantee obligations, fees,
indemnities, costs, expenses or otherwise (including all legal fees of the
Parent that are required to be paid by the Borrower pursuant to the terms of any
of the foregoing agreements).
"Partnership" means each partnership in which a Grantor has an
interest, including those set forth on Schedule 2.
"Partnership Agreement" means each partnership agreement governing a
Partnership, as each such agreement has heretofore been and may hereafter be
amended, restated, supplemented or otherwise modified.
"Patents" means (a) all letters patent of the United States, any other
country or any political subdivision thereof and all reissues and extensions
thereof, (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part
thereof, and (c) all rights to obtain any reissues or extensions of the
foregoing.
"Patent License" means all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, use,
import, sell or offer for sale any invention covered in whole or in part by a
Patent.
4
"Pledge Amendment" has the meaning specified in Section 4.4.
"Pledged Collateral" means, collectively, the Pledged Notes, the
Pledged Stock, the Pledged Partnership Interests, the Pledged LLC Interests, any
other Investment Property of any Grantor, all certificates or other instruments
representing any of the foregoing and all Security Entitlements of any Grantor
in respect of any of the foregoing included in the Collateral. Pledged
Collateral may be General Intangibles or Investment Property.
"Pledged LLC Interests" means all right, title and interest of any
Grantor as a member of any LLC and all of such Grantor's right, title and
interest in, to and under any LLC Agreement to which it is a party.
"Pledged Notes" means all right, title and interest of any Grantor in
the Instruments evidencing any Indebtedness owed to such Grantor, including all
Indebtedness described on Schedule 2, issued by the obligors named therein.
"Pledged Partnership Interests" means all of any Grantor's right,
title and interest as a limited and/or general partner in any Partnerships and
all of such Grantor's right, title and interest in, to and under any Partnership
Agreements to which it is a party.
"Pledged Stock" means all right, title and interest of any Grantor in
the shares of capital stock owned by each Grantor, including all shares of
capital stock listed on Schedule 2; provided, however, that only the
outstanding capital stock of a subsidiary of any Grantor created after the date
hereof that is not a Domestic Subsidiary possessing up to but not exceeding 65%
of the voting power of all classes of capital stock of such controlled foreign
corporation entitled to vote shall be deemed to be pledged hereunder.
"Related Contract" means each security agreement, lease and other
contract securing or otherwise relating to any Account.
"Secured Obligations" means the Credit Agreement Obligations, the
Guaranty Obligations and the Parent Intercompany Note Borrower Obligations.
"Secured Party" has the meaning set forth in the Collateral Trust
Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Property" means:
(a) any permit, lease or license held by any Grantor that validly
prohibits the creation by such Grantor of a security interest therein;
(b) any permit, lease or license held by any Grantor to the extent
that any Requirement of Law applicable thereto prohibits the creation of a
security interest therein; and
(c) Equipment owned by any Grantor on the date hereof that is subject
to a purchase money Lien or a Capital Lease Obligation if the contract or
other agreement in which such Lien is granted (or in the documentation
providing for such Capital Lease Obligation) validly prohibits the creation
of any other Lien on such Equipment;
5
(d) any LLC interests, Partnership interests or other equity interests
that are subject to contractual prohibitions against or limitations on the
transfer or pledging of such interests; and
(e) rights under any contract which prohibits collateral assignment;
in each case only to the extent, and for so long as, such permit, lease,
license, contract or other agreement, or Requirement of Law applicable thereto,
validly prohibits the creation of a Lien in such property in favor of the
Collateral Agent (and upon the termination of such prohibition (howsoever
occurring) such permit, lease, license or equipment shall cease to be "Special
Property").
"Trademarks" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, and (b) the right to obtain all renewals thereof.
"Trademark License" means any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark.
"Trustee" means Bank of New York.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the State of New York; provided, however, that in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of the Collateral Agent's and/or the Secured Parties' security interest
in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions; provided, further, that
if the UCC is amended after the date hereof, such amendment will not be given
effect for the purposes of this Agreement if and to the extent the result of
such amendment would be to limit or eliminate any item of Collateral.
"Vehicles" means all vehicles covered by a certificate of title law of
any state.
Section 1.2 Certain Other Terms.
-------------------
(a) The words "herein," "hereof," "hereto" and "hereunder" and similar
words refer to this Agreement as a whole and not to any particular Article,
Section, subsection or clause in this Agreement.
(b) References herein to an Annex, Schedule, Article, Section,
subsection or clause refer to the appropriate Annex or Schedule to, or Article,
Section, subsection or clause in this Agreement.
6
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) Where the context requires, provisions relating to the Collateral
or any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
(e) Any reference in this Agreement to a Loan Document shall include
all appendices, exhibits and schedules thereto, and, unless specifically stated
otherwise all amendments, restatements, supplements or other modifications
thereto, and as the same may be in effect at any and all times such reference
becomes operative.
(f) The term "including" means "including without limitation" except
when used in the computation of time periods.
(g) The terms "Lender," "Collateral Agent" and "Secured Party" include
their respective successors.
(h) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect from time to time.
ARTICLE II. Grant of Security Interest
Section 2.1 Collateral. For the purposes of this Agreement, all of the
----------
following property now owned or at any time hereafter acquired by a Grantor or
in which a Grantor now has or at any time in the future may acquire any right,
title or interests is collectively referred to as the "Collateral":
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Inventory;
(i) all Investment Property;
(j) all Letter of Credit Rights;
(k) all Vehicles;
7
(l) [the Commercial Tort Claims described on Schedule ______;]
(m) all books and records pertaining to the other property described
in this Section 2.1;
(n) all other goods and personal property of such Grantor whether
tangible or intangible wherever located;
(o) all property of any Grantor held by the Collateral Agent or any
Secured Party, including all property of every description, in the possession or
custody of or in transit to the Collateral Agent or such Secured Party for any
purpose, including safekeeping, collection or pledge, for the account of such
Grantor, or as to which such Grantor may have any right or power; and
(p) to the extent not otherwise included, all Proceeds.
Section 2.2 Grant of Security Interest in Collateral.
----------------------------------------
(a) The Borrower, as collateral security for the full, prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Credit Agreement Obligations and the Parent
Intercompany Note Borrower Obligations hereby collaterally assigns, mortgages,
pledges and hypothecates to the Collateral Agent for the benefit of the Secured
Parties, and grants to the Collateral Agent for the benefit of the Secured
Parties a lien on and security interest in, all of its right, title and interest
in, to and under the Collateral of the Borrower; provided, however, that the
foregoing grant of a security interest shall not include a security interest in
Excluded Property and provided, further, that if and when the prohibition which
prevents the granting by the Borrower to the Collateral Agent of a security
interest in such Excluded Property is removed or otherwise terminated, the
Collateral Agent will be deemed to have, and at all times from and after the
date hereof to have had, a security interest in such Excluded Property, as the
case may be.
(b) Each Grantor, other than the Borrower, as collateral security for
the full, prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Guaranty Obligations
hereby collaterally assigns, mortgages, pledges and hypothecates to the
Collateral Agent for the benefit of the Secured Parties a lien on and security
interest in, all of its right, title and interest in, to and under the
Collateral of such Grantor; provided, however, that the foregoing grant of a
security interest shall not include a security interest in Excluded Property and
provided, further, that if and when the prohibition which prevents the granting
by such Grantor to the Collateral Agent of a security interest in such Excluded
Property is removed or otherwise terminated, the Collateral Agent will be deemed
to have, and at all times from and after the date hereof to have had, a security
interest in such Excluded Property, as the case may be.
Section 2.3 Cash Collateral Accounts. The Collateral Agent may
------------------------
establish one or more Deposit Accounts and one or more Securities Accounts with
such depositaries and Securities Intermediaries as it in its sole discretion
shall determine. Each such account shall be in the name of the Collateral Agent
(but may also have words referring to a Grantor and the account's purpose). The
Collateral Agent shall be the entitlement holder with respect to each such
Securities Account and the only Person authorized to give entitlement orders
with respect thereto. Without limiting the foregoing, funds on deposit in any
Cash Collateral Account may be
8
invested in Cash Equivalents at the direction of the Collateral Agent; provided,
however, that the Collateral Agent shall not have any responsibility for, or
bear any risk of loss of, any such investment or income thereon. Neither any
Grantor nor any other Loan Party or Person claiming on behalf of or through the
such Grantor or any other Loan Party shall have any right to demand payment of
any of the funds held in any Cash Collateral Account at any time prior to the
payment in full of all then outstanding Secured Obligations. The Collateral
Agent shall apply all funds on deposit in a Cash Collateral Account as provided
in the Collateral Trust Agreement.
ARTICLE III. Representations And Warranties
Each Grantor hereby represents and warrants to the Collateral Agent
and the other Secured Parties that:
Section 3.1 Title; No Other Liens. Except for the Lien granted to the
---------------------
Collateral Agent pursuant to this Agreement and Permitted Liens, such Grantor is
the record and beneficial owner of the Pledged Collateral pledged by it
hereunder constituting Instruments or certificated securities, is the
entitlement holder of all Pledged Collateral constituting Investment Property
held in a Securities Account and has rights in or the power to transfer each
other item of Collateral in which a Lien is granted by it hereunder, free and
clear of any and all Liens.
Section 3.2 Perfection and Priority. The security interest granted
-----------------------
pursuant to this Agreement will constitute a valid and continuing perfected
security interest in favor of the Collateral Agent in the Collateral for which
perfection is governed by the UCC or filing with the United States Copyright
Office upon (i) the completion of the filings and other actions specified on
Schedule 3 (which, in the case of all filings and other documents referred to on
such schedule, have been delivered to the Collateral Agent in completed and duly
executed form), (ii) the delivery to the Collateral Agent of all Collateral
consisting of certificated securities, in each case properly endorsed for
transfer to the Collateral Agent or in blank, (iii) the execution of Control
Account Agreements with respect to Investment Property not in certificated form,
(iv) the execution of Deposit Account Control Agreements with respect to all
Deposit Accounts (other than any Cash Collateral Account) and (v) all
appropriate filings having been made with the United States Copyright Office.
Such security interest will be prior to all other Liens on the Collateral except
for Permitted Liens.
Section 3.3 State of Incorporation; Chief Executive Office. On the
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date hereof such Grantor's jurisdiction of organization, organizational
identification number, if any, and the location of such Grantor's chief
executive office or sole place of business is specified on Schedule 1.
Section 3.4 Inventory and Equipment. On the date hereof, such
-----------------------
Grantor's Inventory and Equipment (other than mobile goods and Inventory or
Equipment in transit) are kept at the locations listed on Schedule 4.
Section 3.5 Pledged Collateral.
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(a) The Pledged Stock, Pledged Partnership Interests and Pledged LLC
Interests pledged hereunder by such Grantor are listed on Schedule 2 and
constitute that percentage of the issued and outstanding equity of all classes
of each issuer thereof as set forth on Schedule 2.
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(b) All of the Pledged Stock, Pledged Partnership Interests and
Pledged LLC Interests have been duly authorized and validly issued and are fully
paid and, in the case of Pledged Stock, nonassessable.
(c) Each of the Pledged Notes has been duly authorized, issued and
delivered and where necessary authenticated, and constitutes the legal, valid
and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).
(d) All Pledged Collateral and any Additional Pledged Collateral
consisting of certificated securities has been delivered to the Collateral Agent
in accordance with Section 4.4(a).
(e) All Pledged Collateral held by a Securities Intermediary in a
Securities Account is in a Control Account.
(f) Other than the Pledged Partnership Interests and the Pledged LLC
Interests that constitute General Intangibles, there is no Pledged Collateral
other than that represented by certificated securities in the possession of the
Collateral Agent or that consisting of Financial Assets held in a Control
Account.
Section 3.6 Accounts. No amount payable to such Grantor under or in
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connection with any Account is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Collateral Agent, properly endorsed for
transfer, to the extent delivery is required by Section 4.4.
Section 3.7 No Other Names. Except as set forth on Schedule 1, such
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Grantor has not had, or operated in any jurisdiction within the five-year period
preceding the date hereof under, any trade name, fictitious name or other name
other than its legal name.
Section 3.8 Intellectual Property.
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(a) Schedule 5 lists all Material Intellectual Property of such
Grantor on the date hereof, separately identifying that owned by such Grantor
and that licensed to such Grantor. The Material Intellectual Property set forth
on Schedule 5 for such Grantor constitutes all of the intellectual property
rights necessary to conduct its business.
(b) On the date hereof, all Material Intellectual Property owned by
such Grantor is valid, subsisting, unexpired and enforceable, has not been
adjudged invalid and has not been abandoned and, to the Grantor's knowledge, the
use thereof in the business of such Grantor does not infringe the intellectual
property rights of any other Person.
(c) Except as set forth in Schedule 5, on the date hereof, none of the
Material Intellectual Property owned by such Grantor is the subject of any
licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor.
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(d) No holding, decision or judgment has been rendered by any
Governmental Authority that would limit, cancel or question the validity of, or
such Grantor's rights in, any Material Intellectual Property.
(e) No action or proceeding seeking to limit, cancel or question the
validity of any Material Intellectual Property owned by such Grantor or such
Grantor's ownership interest therein is on the date hereof pending or, to the
knowledge of such Grantor, threatened. There are no claims, judgments or
settlements to be paid by such Grantor relating to the Material Intellectual
Property.
Section 3.9 Deposit Accounts; Control Accounts. The only Deposit
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Accounts or Securities Accounts maintained by any Grantor on the date hereof are
those listed on Schedule 6, which sets forth such information separately for
each Grantor.
ARTICLE IV. Covenants
As long as any of the Secured Obligations remain outstanding, each
Grantor agrees with the Collateral Agent that:
Section 4.1 Generally. Such Grantor shall (a) except for the security
---------
interest created by this Agreement, not create or suffer to exist any Lien upon
or with respect to any of the Collateral, except Permitted Liens; (b) not use or
permit any Collateral to be used unlawfully or in violation of any provision of
this Agreement, any other Loan Document, any Requirement of Law or any policy of
insurance covering the Collateral; (c) not sell, transfer or assign (by
operation of law or otherwise) any Collateral except as permitted under the
Credit Agreement; and (d) not enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Collateral Agent to
sell, assign or transfer any of the Collateral, except as permitted by the
Credit Agreement.
Section 4.2 Maintenance of Perfected Security Interest; Further
---------------------------------------------------
Documentation.
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(a) Such Grantor will maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in Section 3.2 and shall defend such security interest against the
claims and demands of all Persons.
(b) Such Grantor will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Collateral Agent
may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further action as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including the filing of any financing or continuation statement under the UCC
(or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby, and the execution and delivery of Deposit
Account Control Agreements and Control Account Agreements.
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Section 4.3 Changes in Locations, Name, Etc.
--------------------------------
(a) Except upon 90 days' prior written notice to the Collateral Agent
and delivery to the Collateral Agent of (i) all additional executed financing
statements and other documents reasonably requested by the Collateral Agent to
maintain the validity, perfection and priority of the security interests
provided for herein and (ii) if applicable, a written supplement to Schedule 4
showing any additional location at which Inventory or Equipment shall be kept,
such Grantor will not:
(i) permit any of the Inventory, Equipment or Pledged Notes to be kept
at a location other than those listed on Schedule 4;
(ii) change its state of incorporation or the location of its chief
executive office or sole place of business from that referred to in Section
3.3; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed in connection with this Agreement
would become misleading.
(b) Such Grantor will keep and maintain at its own cost and expense
satisfactory and complete records of the Collateral, including a record of all
payments received and all credits granted with respect to the Collateral and all
other dealings with the Collateral. If requested by the Collateral Agent, the
security interest of the Collateral Agent shall be noted on the certificate of
title of each Vehicle.
Section 4.4 Pledged Collateral.
------------------
(a) Such Grantor will (i) deliver to the Collateral Agent all
certificates representing or evidencing any Pledged Collateral (including
Additional Pledged Collateral), and, at the Collateral Agent's request, all
Instruments, whether now existing or hereafter acquired, in suitable form for
transfer by delivery or, as applicable, accompanied by such Grantor's
endorsement, where necessary, or duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent, together, in respect of any Additional Pledged Collateral, with a Pledge
Amendment, duly executed by the Grantor, in substantially the form of Annex 3 (a
"Pledge Amendment") or such other documentation acceptable to the Collateral
Agent, (ii) authorize the Collateral Agent to attach each Pledge Amendment to
this Agreement and (iii) maintain all other Pledged Collateral constituting
Investment Property in a Control Account. The Collateral Agent shall have the
right, at any time in its discretion and without notice to the Grantor, to
transfer to or to register in its name or in the name of its nominees any or all
of the Pledged Collateral. The Collateral Agent shall have the right at any time
to exchange certificates or instruments representing or evidencing any of the
Pledged Collateral for certificates or instruments of smaller or larger
denominations.
(b) Except as provided in Article V, each Grantor shall be entitled to
receive all cash dividends paid in respect of the Pledged Collateral (other than
liquidating or distributing dividends) with respect to the Pledged Collateral.
Any sums paid upon or in respect of any of the Pledged Collateral upon the
liquidation or dissolution of any issuer of any of the Pledged Collateral, any
distribution of capital made on or in respect of any of the Pledged Collateral
or any property distributed upon or with respect to any of the Pledged
Collateral pursuant to the recapitalization or reclassification of the capital
of any issuer of Pledged Collateral or pursuant to the reorganization thereof
shall, unless otherwise subject to a perfected security interest in favor
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of the Collateral Agent, be delivered to the Collateral Agent to be held by it
hereunder as additional collateral security for the Secured Obligations. If any
sums of money or property so paid or distributed in respect of any of the
Pledged Collateral shall be received by such Grantor, such Grantor shall, until
such money or property is paid or delivered to the Collateral Agent, hold such
money or property in trust for the Collateral Agent, segregated from other funds
of such Grantor, as additional security for the Secured Obligations.
(c) Except as provided in Article V, such Grantor will be entitled to
exercise all voting, consent and corporate rights with respect to the Pledged
Collateral; provided, however, that no vote shall be cast, consent given or
right exercised or other action taken by such Grantor which would impair the
Collateral or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, the Parent Intercompany Note, this Agreement
or any other Loan Document or which would, without prior notice to the
Collateral Agent, enable or permit any issuer of Pledged Collateral that is a
Subsidiary of any Grantor to issue any stock or other equity securities of any
nature or to issue any other securities convertible into or granting the right
to purchase or exchange for any stock or other equity securities of any nature
of any issuer of Pledged Collateral, other than securities issued by FINOVA
Mezzanine Capital Inc. pursuant to the Reorganization Plan.
(d) Such Grantor shall not grant Control over any Investment Property
to any Person other than the Collateral Agent.
(e) In the case of each Grantor which is an issuer of Pledged
Collateral, such Grantor agrees to be bound by the terms of this Agreement
relating to the Pledged Collateral issued by it and will comply with such terms
insofar as such terms are applicable to it. In the case of each Grantor which is
a partner in a Partnership, such Grantor hereby consents to the extent required
by the applicable Partnership Agreement to the pledge by each other Grantor,
pursuant to the terms hereof, of the Pledged Partnership Interests in such
Partnership and to the transfer of such Pledged Partnership Interests to the
Collateral Agent or its nominee and to the substitution of the Collateral Agent
or its nominee as a substituted partner in such Partnership with all the rights,
powers and duties of a general partner or a limited partner, as the case may be.
In the case of each Grantor which is a member of an LLC, such Grantor hereby
consents to the extent required by the applicable LLC Agreement to the pledge by
each other Grantor, pursuant to the terms hereof, of the Pledged LLC Interests
in such LLC and to the transfer of such Pledged LLC Interests to the Collateral
Agent or its nominee and to the substitution of the Collateral Agent or its
nominee as a substituted member of the LLC with all the rights, powers and
duties of a member of the LLC in question.
(f) Such Grantor will not agree to any amendment of an LLC Agreement
or Partnership Agreement that in any way adversely affects the perfection of the
security interest of the Collateral Agent in the Pledged Partnership Interests
or Pledged LLC Interests pledged by such Grantor hereunder, including any
amendment that would cause the membership interest or partnership interest of
such Grantor to be a security under Section 8-103 of the UCC.
Section 4.5 Control Accounts; Deposit Accounts.
----------------------------------
(a) Such Grantor will (i) deposit in an Approved Deposit Account all
cash received by such Grantor, (ii) not establish or maintain any Securities
Account that is not a Control Account and (iii) not establish or maintain any
Deposit Account other than with an Approved Deposit Account Bank, provided,
however, that any Grantor may (i) maintain payroll,
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withholding tax and other fiduciary accounts and (ii) maintain other accounts so
long as the aggregate balance in all such accounts does not exceed
$_____________.
(b) Such Grantor shall instruct each Account Debtor or other Person
obligated to make a payment to such Grantor under a General Intangible to make
payment, or to continue to make payment, as the case may be, to an Approved
Deposit Account and will deposit in an Approved Deposit Account all Proceeds of
such Accounts and General Intangibles received by such Grantor from any other
Person immediately upon receipt.
(c) In the event (i) such Grantor or any Approved Securities
Intermediary or Approved Deposit Bank shall, after the date hereof, terminate an
agreement with respect to the maintenance of a Control Account or Approved
Deposit Account for any reason, (ii) the Collateral Agent shall demand such
termination as a result of the failure of an Approved Securities Intermediary or
Approved Deposit Account Bank to comply with the terms of the applicable Control
Account Agreement or Deposit Account Control Agreement, or (iii) the Collateral
Agent determines in its sole discretion that the financial condition of an
Approved Securities Intermediary or Approved Deposit Account Bank, as the case
may be, has materially deteriorated, such Grantor agrees to notify all of its
obligors that were making payments to such terminated Control Account or
Approved Deposit Account, as the case may be, to make all future payments to
another Control Account or Approved Deposit Account, as the case may be.
Section 4.6 Delivery of Instruments and Chattel Paper. If any amount
-----------------------------------------
payable under or in connection with any of the Collateral owned by such Grantor
shall be or become evidenced by an Instrument or Chattel Paper, such Grantor
shall immediately deliver such Instrument or Chattel Paper to the Collateral
Agent, duly indorsed in a manner satisfactory to the Collateral Agent, or, if
consented to by the Collateral Agent, shall ▇▇▇▇ all such Instruments and
Chattel Paper with the following legend: "This writing and the obligations
evidenced or secured hereby are subject to the security interest of __________,
as Collateral Agent".
Section 4.7 Intellectual Property.
---------------------
(a) Such Grantor (either itself or through licensees) will (i)
continue to use each Trademark that is Material Intellectual Property in order
to maintain such Trademark in full force and effect with respect to each class
of goods for which such Trademark is currently used, free from any claim of
abandonment for non-use, (ii) use such Trademark with any applicable and
appropriate notice of registration and all other notices and legends required by
applicable Requirements of Law, (iii) not adopt or use any ▇▇▇▇ which is
confusingly similar or a colorable imitation of such Trademark unless the
Collateral Agent shall obtain a perfected security interest in such ▇▇▇▇
pursuant to this Agreement and (iv) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any Patent which is Material Intellectual
Property may become forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will not
(and will not permit any licensee or sublicensee thereof to) do any act or omit
to do any act whereby any portion of the Copyrights which is Material
Intellectual Property may become invalidated or
14
otherwise impaired and (ii) will not (either itself or through licensees) do any
act whereby any portion of the Copyrights which is Material Intellectual
Property may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any trade secret which is Material
Intellectual Property may become publicly available or otherwise unprotectable.
(e) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any Material Intellectual Property to infringe the
intellectual property rights of any other Person.
(f) Such Grantor will notify the Collateral Agent immediately if it
knows, or has reason to know, that any application or registration relating to
any Material Intellectual Property may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in any country) regarding such Grantor's
ownership of, right to use, interest in, or the validity of, any Material
Intellectual Property or such Grantor's right to register the same or to own and
maintain the same.
(g) Whenever such Grantor, either by itself or through any agent,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency within or outside
the United States, such Grantor shall report such filing to the Collateral Agent
within five Business Days after the last day of the fiscal quarter in which such
filing occurs. Upon request of the Collateral Agent, such Grantor shall execute
and deliver, and have recorded, any and all agreements, instruments, documents,
and papers as the Collateral Agent may request to evidence the Collateral
Agent's security interest in any Copyright, Patent or Trademark and the goodwill
and general intangibles of such Grantor relating thereto or represented thereby.
(h) Such Grantor will take all reasonable actions necessary or
requested by the Collateral Agent, including in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency, to maintain and pursue each application (and to obtain
the relevant registration) and to maintain each registration of any Copyright,
Trademark or Patent that is Material Intellectual Property, including filing of
applications for renewal, affidavits of use, affidavits of incontestability and
opposition and interference and cancellation proceedings.
(i) In the event that any Material Intellectual Property is infringed
upon or misappropriated or diluted by a third party, such Grantor shall notify
the Collateral Agent promptly after such Grantor learns thereof. Such Grantor
shall take appropriate action in response to such infringement, misappropriation
of dilution, including promptly bringing suit for infringement, misappropriation
or dilution and to recover any and all damages for such infringement,
misappropriation of dilution, and shall take such other actions as may be
appropriate in its reasonable judgment under the circumstances to protect such
Material Intellectual Property.
(j) Unless otherwise agreed to by the Collateral Agent, such Grantor
will execute and deliver to the Collateral Agent for filing in (i) the United
States Copyright Office a
15
short-form copyright security agreement in the form attached hereto as Annex 5,
(ii) in the United States Patent and Trademark Office a short-form patent
security agreement in the form attached hereto as Annex 6 and (iii) the United
States Patent and Trademark Office a short-form trademark security agreement in
form attached hereto as Annex 7, with respect to all registered Copyrights and
Trademarks, and all of such Grantor's Patents.
Section 4.8 Vehicles. Upon the request of the Collateral Agent, within
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30 days after the date of such request and, with respect to any Vehicles
acquired by such Grantor subsequent to the date of any such request, within 30
days after the date of acquisition thereof, such Grantor shall file all
applications for certificates of title/ownership indicating the Collateral
Agent's first priority security interest in the Vehicle covered by such
certificate, and any other necessary documentation, in each office in each
jurisdiction which the Collateral Agent shall deem advisable to perfect its
security interests in the Vehicles.
Section 4.9 Insurance. Such Grantor shall (i) maintain all insurance
---------
required by the Credit Agreement and (ii) cause all such insurance to name the
Collateral Agent on behalf of the Secured Parties as additional insured, and to
provide that no cancellation, material addition in amount or material change in
coverage shall be effective until after 30 days' written notice thereof to the
Collateral Agent.
Section 4.10 Special Property. Each Grantor shall from time to time at
----------------
the request of the Collateral Agent give written notice to the Collateral Agent
identifying in reasonable detail the Special Property (and stating in such
notice the extent to which such Special Property constitutes Excluded Property)
and shall provide to the Collateral Agent such other information regarding the
Special Property as the Collateral Agent may reasonably request.
ARTICLE V. Remedial Provisions
Section 5.1 Code and Other Remedies. During the continuance of an
-----------------------
Event of Default, the Collateral Agent may exercise, in addition to all other
rights and remedies granted to it in this Agreement and in any other instrument
or agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the UCC or any other applicable
law. Without limiting the generality of the foregoing, the Collateral Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Collateral Agent or any Secured Party or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Collateral Agent shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Collateral
Agent's request, to assemble the Collateral and make it available to the
Collateral Agent at places which the Collateral Agent shall reasonably select,
whether at such Grantor's premises or elsewhere. The Collateral Agent shall
apply the net proceeds of any action taken by it pursuant to this Section 5.1 in
the manner set forth in the
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Collateral Trust Agreement. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands it may acquire against the
Collateral Agent or any other Secured Party arising out of the exercise by them
of any rights hereunder. If any notice of a proposed sale or other disposition
of Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.
Section 5.2 Accounts and Payments in Respect of General Intangibles.
-------------------------------------------------------
(a) If required by the Collateral Agent at any time during the
continuance of an Event of Default, any payments of Accounts or payments in
respect of General Intangibles, when collected by any Grantor, shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in a Cash Collateral Account. Until so turned
over, such payments shall be held by such Grantor in trust for the Collateral
Agent, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Accounts and payments in respect of General Intangibles shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.
(b) At the Collateral Agent's request, during the continuance of an
Event of Default, each Grantor shall deliver to the Collateral Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Accounts or payments in respect of General
Intangibles, including all original orders, invoices and shipping receipts.
(c) The Collateral Agent may, without notice, at any time during the
continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its Accounts or amounts due under General Intangibles or any
thereof.
(d) The Collateral Agent in its own name or in the name of others may
at any time during the continuance of an Event of Default communicate with
Account Debtors to verify with them to the Collateral Agent's satisfaction the
existence, amount and terms of any Accounts or amounts due under any General
Intangibles.
(e) Upon the request of the Collateral Agent at any time during the
continuance of an Event of Default, each Grantor shall notify Account Debtors
that the Accounts or General Intangibles have been collaterally assigned to the
Collateral Agent and that payments in respect thereof shall be made directly to
the Collateral Agent. In addition, the Collateral Agent may at any time during
the continuance of an Event of Default enforce such Grantor's rights against
such Account Debtors and obligors of General Intangibles.
(f) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Accounts and payments in respect of
General Intangibles to observe and perform all the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise thereto. Neither the Collateral Agent nor any other
Secured Party shall have any obligation or liability under any agreement giving
rise to an Account or a payment in respect of a General Intangible by reason of
or arising out of this Agreement or the receipt by the Collateral Agent nor any
other Secured Party of any payment relating thereto, nor shall the Collateral
Agent nor any other Secured Party be obligated in any manner to perform any of
the obligations of any Grantor under or pursuant to any agreement giving rise to
an Account or a payment in respect of a General Intangible, to make
17
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
Section 5.3 Pledged Collateral.
------------------
(a) During the continuance of an Event of Default, upon notice by the
Collateral Agent to the relevant Grantor or Grantors, (i) the Collateral Agent
shall have the right to receive any and all Proceeds of the Pledged Collateral
and make application thereof to the Obligations in the order set forth in the
Collateral Trust Agreement, and (ii) the Collateral Agent or its nominee may
exercise (A) all voting, consent, corporate and other rights pertaining to the
Pledged Collateral at any meeting of shareholders, partners or members, as the
case may be, of the relevant issuer or issuers of Pledged Collateral or
otherwise and (B) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to the Pledged Collateral
as if it were the absolute owner thereof (including the right to exchange at its
discretion any and all of the Pledged Collateral upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any issuer of Pledged Securities, the right to deposit and deliver
any and all of the Pledged Collateral with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
the Collateral Agent may determine), all without liability except to account for
property actually received by it, but the Collateral Agent shall have no duty to
any Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(b) In order to permit the Collateral Agent to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions which it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Collateral Agent all such proxies, dividend
payment orders and other instruments as the Collateral Agent may from time to
time reasonably request and (ii) without limiting the effect of clause (i)
above, such Grantor hereby grants to the Collateral Agent an irrevocable proxy
to vote all or any part of the Pledged Collateral and to exercise all other
rights, powers, privileges and remedies to which a holder of the Pledged
Collateral would be entitled (including giving or withholding written consents
of shareholders, partners or members, as the case may be, calling special
meetings of shareholders, partners or members, as the case may be, and voting at
such meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Collateral on the
record books of the issuer thereof) by any other person (including the issuer of
such Pledged Collateral or any officer or agent thereof) during the continuance
of an Event of Default and which proxy shall only terminate upon the payment in
full of the Secured Obligations.
(c) Each Grantor hereby expressly authorizes and instructs each issuer
of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with
any instruction received by it from the Collateral Agent in writing that (A)
states that an Event of Default has occurred and is continuing and (B) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that such issuer
shall be fully protected in so complying and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Collateral directly to the Collateral Agent.
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Section 5.4 Proceeds to be Turned Over To Collateral Agent. All
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Proceeds received by the Collateral Agent hereunder shall be held by the
Collateral Agent in a Cash Collateral Account. All Proceeds while held by the
Collateral Agent in a Cash Collateral Account (or by such Grantor in trust for
the Collateral Agent) shall continue to be held as collateral security for the
Secured Obligations and shall not constitute payment thereof until applied as
provided in the Collateral Trust Agreement.
Section 5.5 Deficiency. Each Grantor shall remain liable for any
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deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Secured Obligations and the fees and disbursements
of any attorneys employed by the Collateral Agent or any other Secured Party to
collect such deficiency.
Section 5.6 Execution of Financing Statements. Each Grantor authorizes
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the Collateral Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Collateral
Agent reasonably determines appropriate to perfect the security interests of the
Collateral Agent under this Agreement.
ARTICLE VI. Miscellaneous
Section 6.1 Amendments in Writing. None of the terms or provisions of
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this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with the Collateral Trust Agreement.
Section 6.2 Notices. All notices, requests and demands to or upon the
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Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in the Collateral Trust Agreement.
Section 6.3 No Waiver by Course of Conduct; Cumulative Remedies.
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Neither the Collateral Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 6.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of the Collateral Agent or any other
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Collateral Agent or any
other Secured Party of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Collateral Agent or
such other Secured Party would otherwise have on any future occasion. The rights
and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by
law.
Section 6.4 Successors and Assigns. This Agreement shall be binding
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upon the successors and assigns of each Grantor and shall inure to the benefit
of the Collateral Agent and each other Secured Party and their successors and
assigns; provided, however, that no Grantor may assign, transfer or delegate any
of its rights or obligations under this Agreement without the prior written
consent of the Collateral Agent, except as otherwise permitted under the Credit
Agreement and the Indenture.
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Section 6.5 Counterparts. This Agreement may be executed by one or
------------
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same agreement.
Section 6.6 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 6.7 Section Headings. The Article and Section titles contained
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in this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not part of the agreement of the parties hereto.
Section 6.8 Entire Agreement. This Agreement together with the other
----------------
Loan Documents represents the entire agreement of the parties and supersedes all
prior agreements and understandings relating to the subject matter hereof.
Section 6.9 Governing Law. This agreement and the rights and
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obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
Section 6.10 Additional Grantors. If, pursuant to the Credit
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Agreement, the Borrower shall be required to cause any Subsidiary that is not a
Grantor to become a Grantor hereunder, such Subsidiary shall execute and deliver
to the Collateral Agent a Joinder Agreement in the form of Annex 4 and shall
thereafter for all purposes be a party hereto and have the same rights, benefits
and obligations as a Grantor party hereto on the date hereof.
Section 6.11 Reinstatement. Each Grantor further agrees that, if any
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payment made by any Loan Party or other Person and applied to the Secured
Obligations is at any time annulled, avoided, set aside, rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required to be refunded
or repaid, or the proceeds of Collateral are required to be returned by any
Secured Party to such Loan Party, its estate, trustee, receiver or any other
party, including any Grantor, under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or repayment,
any Lien or other Collateral securing such liability shall be and remain in full
force and effect, as fully as if such payment had never been made or, if prior
thereto the Lien granted hereby or other Collateral securing such liability
hereunder shall have been released or terminated by virtue of such cancellation
or surrender), such Lien or other Collateral shall be reinstated in full force
and effect, and such prior cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect any Lien or other Collateral
securing the obligations of any Grantor in respect of the amount of such
payment.
Section 6.12 Security Interest Absolute. All rights of the Collateral
--------------------------
Agent hereunder and all obligations of each Grantor hereunder shall be absolute
and unconditional irrespective of:
(a) any lack of validity, regularity or enforceability, in whole or in
part, of any of the Loan Documents;
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(b) any change in the terms of any or all of the Secured Obligations
or any amendment or waiver of, or consent to any departure from, any provision
of any of the Loan Documents;
(c) any taking, exchange, release or nonperfection of any Collateral,
or any taking, release or amendment or waiver of, or consent to any departure
from, any guaranty, for any or all of the Secured Obligations;
(d) any manner of application of Collateral or Proceeds to any or all
of the Secured Obligations, or any manner of sale or other disposition of any
Collateral or any other assets of such Grantor or its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of such Grantor or any of its Subsidiaries; and
(f) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, such Grantor with respect to the security
interests granted hereunder.
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In witness whereof, each of the undersigned has caused this Pledge and
Security Agreement to be duly executed and delivered as of the date first above
written.
[Grantors]
By:_______________________________________
Name:
Title:
ACCEPTED AND AGREED:
______________, as Collateral Agent
By:______________________________________________
Name:
Title:
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