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IMPERIAL CREDIT INDUSTRIES, INC.
12% SENIOR SECURED NOTES DUE 2005
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INDENTURE
Dated as of _______ __, 2001
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The Chase Manhattan Bank and Trust Company, National Association
Trustee
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CROSS-REFERENCE TABLE
Trust Indenture
Act Section Indenture Section
310(a)(1)........................................................ 7.10
(a)(2)........................................................ 7.10
(a)(3)........................................................ N.A.
(a)(4)........................................................ N.A.
(a)(5)........................................................ 7.10
(b)........................................................... 7.10
(c)........................................................... N.A.
311(a)........................................................... 7.11
(b)........................................................... 7.11
(c)........................................................... N.A.
312(a)........................................................... 2.05
(b)........................................................... 12.03
(c)........................................................... 12.03
313(a)........................................................... 7.06
(b)(1)........................................................ N.A.
(b)(2)........................................................ 7.07
(c)........................................................... 7.06; 12.02
(d)........................................................... 7.06
314(a)........................................................... 4.03; 12.02
(b)........................................................... 11.02
(c)(1)........................................................ 12.04
(c)(2)........................................................ 12.04
(c)(3)........................................................ N.A.
(e)........................................................... 12.05
(f)........................................................... N.A.
315(a)........................................................... 7.01
(b)........................................................... 7.05;12.02
(c)........................................................... 7.01
(d)........................................................... 7.01
(e)........................................................... 6.11
316(a)(last sentence)............................................ 2.09
(a)(1)(A)..................................................... 6.05
(a)(1)(B)..................................................... 6.04
(a)(2)........................................................ N.A.
(b)........................................................... 6.07
(c)........................................................... N.A.
317(a)(1)........................................................ 6.08
(a)(2)........................................................ 6.09
(b)........................................................... 2.04
318(a)........................................................... 12.01
(b)........................................................... N.A.
(c)........................................................... 12.01
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
Table of Contents
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE 1
SECTION 1.01 DEFINITIONS 1
SECTION 1.02 OTHER DEFINITIONS 12
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 EXECUTION AND AUTHENTICATION 15
SECTION 2.03 REGISTRAR AND PAYING AGENT 16
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST 16
SECTION 2.05 HOLDER LISTS 17
SECTION 2.06 TRANSFER AND EXCHANGE 17
SECTION 2.07 REPLACEMENT NOTES 23
SECTION 2.08 OUTSTANDING NOTES 24
SECTION 2.09 TREASURY NOTES 24
SECTION 2.10 TEMPORARY NOTES 24
SECTION 2.11 CANCELLATION 25
SECTION 2.12 DEFAULTED INTEREST 25
SECTION 2.13 CUSIP NUMBERS, ETC 25
ARTICLE 3 REDEMPTION AND PREPAYMENT 25
SECTION 3.01 NOTICES TO TRUSTEE 25
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED 26
SECTION 3.03 NOTICE OF REDEMPTION 26
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION 27
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE 27
SECTION 3.06 NOTES REDEEMED IN PART 27
SECTION 3.07 OPTIONAL REDEMPTION 28
SECTION 3.08 MANDATORY REDEMPTION 28
ARTICLE 4 COVENANTS 28
SECTION 4.01 PAYMENT OF NOTES 28
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY 29
SECTION 4.03 REPORTS 29
TABLE OF CONTENTS
(continued)
Page
SECTION 4.04 COMPLIANCE CERTIFICATE 29
SECTION 4.05 TAXES 30
SECTION 4.06 STAY, EXTENSION AND USURY LAWS 30
SECTION 4.07 CHANGE OF CONTROL 30
SECTION 4.08 ASSET SALES 31
SECTION 4.09 RESTRICTED PAYMENTS 32
SECTION 4.10 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK 34
SECTION 4.11 LIENS 35
SECTION 4.12 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES 35
SECTION 4.13 BUSINESS ACTIVITIES 36
SECTION 4.14 TRANSACTIONS WITH AFFILIATES 36
ARTICLE 5 SUCCESSORS 37
SECTION 5.01 MERGER, CONSOLIDATION OR SALE OF ASSETS 37
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED 38
ARTICLE 6 DEFAULTS AND REMEDIES 38
SECTION 6.01 EVENTS OF DEFAULT 38
SECTION 6.02 ACCELERATION 39
SECTION 6.03 OTHER REMEDIES 40
SECTION 6.04 WAIVER OF PAST DEFAULTS 40
SECTION 6.05 CONTROL BY MAJORITY 41
SECTION 6.06 LIMITATION ON SUITS 41
SECTION 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT 41
SECTION 6.08 COLLECTION SUIT BY TRUSTEE 42
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM 42
SECTION 6.10 PRIORITIES 42
SECTION 6.11 UNDERTAKING FOR COSTS 43
ARTICLE 7 TRUSTEE 43
SECTION 7.01 DUTIES OF TRUSTEE 43
SECTION 7.02 RIGHTS OF TRUSTEE 44
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE 45
SECTION 7.04 TRUSTEE'S DISCLAIMER 45
SECTION 7.05 NOTICE OF DEFAULTS 46
TABLE OF CONTENTS
(continued)
Page
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES 46
SECTION 7.07 COMPENSATION AND INDEMNITY 46
SECTION 7.08 REPLACEMENT OF TRUSTEE 47
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC 48
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION 49
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY 49
SECTION 7.12 MONEY HELD IN TRUST 49
SECTION 7.13 RIGHT OF TRUSTEE IN CAPACITY OF REGISTRAR OR PAYING AGENT 49
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE 49
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE 49
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE 49
SECTION 8.03 COVENANT DEFEASANCE 50
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE 50
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; 52
OTHER MISCELLANEOUS PROVISIONS
SECTION 8.06 REPAYMENT TO COMPANY 52
SECTION 8.07 REINSTATEMENT 53
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER 53
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES 53
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES 54
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT 55
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS 55
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES 56
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC 56
ARTICLE 10 SUBORDINATION 56
SECTION 10.01 NOTES SUBORDINATED TO SENIOR SECURED DEBT 56
SECTION 10.02 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC 57
SECTION 10.03 PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION 58
SECTION 10.04 SUBROGATION 58
SECTION 10.05 OBLIGATIONS OF THE COMPANY UNCONDITIONAL 58
SECTION 10.06 NOTICE TO TRUSTEE AND PAYING AGENTS 59
SECTION 10.07 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT 59
TABLE OF CONTENTS
(continued)
Page
SECTION 10.08 TRUSTEE'S RELATION TO SENIOR SECURED DEBT 59
SECTION 10.09 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE 60
COMPANY
SECTION 10.10 NOTEHOLDERS AUTHORIZE TRUSTEE AND PAYING AGENT TO EFFECTUATE 60
SUBORDINATION OF NOTES
SECTION 10.11 TRUSTEE'S COMPENSATION NOT PREJUDICED 61
ARTICLE 11 SECURITY DOCUMENTS 61
SECTION 11.01 COLLATERAL AND SECURITY DOCUMENTS 61
SECTION 11.02 APPLICATION OF PROCEEDS OF COLLATERAL 61
SECTION 11.03 RELEASE OF COLLATERAL 61
SECTION 11.04 CERTIFICATES OF THE COMPANY 62
SECTION 11.05 OPINION OF COUNSEL 62
ARTICLE 12 MISCELLANEOUS 62
SECTION 12.01 TRUST INDENTURE ACT CONTROLS 62
SECTION 12.02 NOTICES 62
SECTION 12.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES 64
SECTION 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT 64
SECTION 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION 64
SECTION 12.06 RULES BY TRUSTEE AND AGENTS 64
SECTION 12.07 GOVERNING LAW 65
SECTION 12.08 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS 65
SECTION 12.09 SUCCESSORS 65
SECTION 12.10 SEVERABILITY 65
SECTION 12.11 COUNTERPART ORIGINALS 65
SECTION 12.12 TABLE OF CONTENTS; HEADINGS; ETC 65
SECTION 12.13 LEGAL HOLIDAYS 65
SECTION 12.14 NO RECOURSE AGAINST OTHERS 66
SECTION 12.15 DUPLICATE ORIGINALS 66
EXHIBITS
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Exhibit A Form of Note
Exhibit B Form of Collateral Agency and Security Agreement
Exhibit C-1 Form of Certificate for Exchange or Registration of Transfer of
Definitive Notes
Exhibit C-2 Form of Certificate for Exchange or Registration of Transfer from
Global Note to Definitive Note
Exhibit C-3 Form of Certificate for Exchange or Registration of Transfer from
Definitive Note to Global Note
INDENTURE, dated as of __________ ___, 2001, between Imperial Credit
Industries, Inc., a California corporation (the "Company"), and the Chase
Manhattan Bank and Trust Company, National Association, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of each other and for the
equal and ratable benefit of the Holders of the Senior Secured Notes due 2005
the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means members of, or participants in, the Depositary.
"Applicable Procedures" means applicable procedures of the Depositary,
Euroclear or Clearstream, as the case may be.
"Asset Sale" means (a) any sale, lease, transfer or other disposition (or
series of related sales, leases, transfers or dispositions) by the Company,
including any disposition by means of a merger, consolidation or similar
transaction (other than as permitted under Section 5.01) (each referred to for
the purposes of this definition as a "disposition"), of (i) any shares of
Capital Stock of the Bank (other than Bank Trust Preferred Stock or directors'
qualifying shares or shares required by applicable law to be held by a Person
other than the Company or the Bank, as the case may be), (ii) all or
substantially all the assets of any division or line of business of the Company,
(iii) any other assets of the Company outside of the ordinary course of business
of the Company, or (b) any issuance of Capital Stock (other than Bank Trust
Preferred Stock or non-convertible preferred stock that is not Disqualified
Stock) by the Bank, except any such issuance to the Company. Notwithstanding the
foregoing, an "Asset Sale" does not include (a) a disposition by the Company to
a Wholly Owned Subsidiary, (b) a disposition that constitutes a Restricted
Payment permitted by Section 4.09) and (c) any trade or exchange by the Company
of any assets for similar assets of a Related Business owned or held by another
Person; provided that (1) the fair market value of the assets traded or
exchanged by the Company (including any cash or Cash Equivalents to be delivered
by the Company) is reasonably equivalent to the fair market value of the asset
or assets (together with any cash or Cash Equivalents) to be received by the
Company and (2) such exchange is approved by a majority of the directors of the
Company who are not employees of the Company or its Subsidiaries.
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"Bank" means Southern Pacific Bank, a California industrial bank that is a
Subsidiary of the Company.
"Bank Trust Preferred Stock" means equity interests issued by a special
purpose entity which is a wholly-owned subsidiary of the Bank and which exists
for the purpose only of issuing equity interests, investing the gross proceeds
of such equity issuances in debt securities of the Bank and engaging in other
activities necessary or incidental thereto.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means with respect to any Person, a copy of a resolution
certified by the Secretary or an Assistant Secretary of such Person, to have
been duly adopted by the Board of Directors of such Person and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet of the lessee
thereof in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars; (ii) Government
Securities (except that for purposes of this definition, Government Securities
must have a remaining Weighted Average Life to Maturity of not more than one
year from the date of investment therein); (iii) commercial paper or other
short-term corporate obligation that has received a rating of at least A-1 or AA
from Standard & Poor's Corporation ("S&P"), P-1 or Aa2 from ▇▇▇▇▇'▇ Investor
Services, Inc. ("Moody's"), F-1 or AA from Fitch, Inc. ("Fitch"); (iv) time
deposits, certificates of deposit, bank acceptances or bank notes issued by any
bank having capital surplus and undivided profits aggregating at least
$500,000,000 (or the foreign currency equivalent thereof) and at least a high A
rating (or the equivalent) from any two of the following: S&P, ▇▇▇▇▇'▇, ▇▇▇▇▇▇▇
Bankwatch, Inc. or IBCA, Inc.; (v) money market preferred stocks which, at the
date of acquisition and at all times thereafter, are accorded ratings of at
least mid AA by any two of the following: S&P, ▇▇▇▇▇'▇ and Fitch; (vi) tax-
exempt obligations that are accorded ratings at the time of investment therein
of at least mid AA (or equivalent short-term ratings) by any two of the
following; S&P, Moody's or Fitch; (vii) master repurchase agreements with
foreign or domestic banks having capital and surplus of not less than
$500,000,000 (or the foreign currency equivalent thereof) or primary dealers so
long as (a) such bank or dealer has a rating of at least mid AA from any two of
the following: S&P,
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Moody's or Fitch; (b) such agreements are collateralized with obligations of the
United States government or its agencies at a ratio of 102%, or with other
collateral rated at least mid AA from any two of the following: S&P, Moody's or
Fitch, at a rate of 103% and, in either case marked to market weekly and (c)
such securities shall be held by a third-party agent; (viii) guaranteed
investment contracts and/or agreements of a bank, insurance company or other
institution whose unsecured, uninsured and unguaranteed obligations (or claims-
paying ability) are, at the time of investment therein, rated AAA by any two of
the following: S&P, ▇▇▇▇▇'▇ or Fitch; (ix) money market funds, the portfolio of
which is limited to investments described in clauses (i) through (viii); (x)
with respect to Non-Domestic Persons, instruments that are comparable to those
described in clauses (i), (ii), (iv) and (vii) in the country in which such Non-
Domestic Person is organized or has its principal business operations; and (xi)
up to $1,000,000 in the aggregate of other financial assets held by
Subsidiaries. In no event shall any of the Cash Equivalents described in clauses
(iii) through (viii), (x) and (xi) above have a final maturity more than one
year from the date of investment therein.
"Change of Control" means the occurrence of one or more of the following
events: (i) a person or entity or group (as that term is used in Section
13(d)(3) of the Exchange Act) of persons or entities shall have become the
beneficial owner of a majority of the securities of the Company ordinarily
having the right to vote in the election of directors; (ii) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any directors
who are members of such Board of Directors of the Company on the date hereof and
any new directors whose election by such Board of Directors of the Company or
whose nomination for election by the shareholders of the Company was approved by
a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; (iii) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of the Company
and its Subsidiaries, taken as a whole, to any person or entity or group (as so
defined) of persons, or entities (other than to any Wholly Owned Subsidiary of
the Company); (iv) the merger or consolidation of the Company with or into
another corporation or the merger of another corporation into the Company with
the effect that immediately after such transaction any person or entity or group
(as so defined) of persons or entities shall have become the beneficial owner of
securities of the surviving corporation of such merger or consolidation
representing a majority of the combined voting power of the outstanding
securities of the surviving corporation ordinarily having the right to vote in
the election of directors; or (v) the adoption of a plan relating to the
liquidation or dissolution of the Company.
"Collateral" means, collectively, the Collateral as defined in the Security
Documents that is from time to time subject to the Lien of the Security
Documents, including the Liens, if any, required pursuant to the provisions of
this Indenture.
"Collateral Agent" has the meaning given to such term in the Security
Agreement.
"Company" has the meaning set forth in the preamble hereto.
"Consolidated Leverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of all consolidated Indebtedness of the
Company and its Subsidiaries, excluding Warehouse In-
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debtedness, Guarantees thereof, and other Indebtedness permitted to be incurred
pursuant to clauses (c) and (i) of Section 4.10 to (ii) the Consolidated Net
Worth of the Company.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; provided
that (i) the Net Income (but not loss) of any Person that is not a Subsidiary or
that is accounted for by the equity method of accounting shall be included only
to the extent of the amount of dividends or distributions paid in cash to the
referent Person or a Wholly Owned Subsidiary thereof and (ii) the cumulative
effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common shareholders of such Person
and its consolidated Subsidiaries as of such date plus (ii) the respective
amounts reported on such Person's balance sheet as of such date with respect to
any series of preferred stock (other than Disqualified Stock) that by its terms
is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of this Indenture in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person, and
(y) all investments as of such date in unconsolidated Subsidiaries and in
Persons that are not Subsidiaries (except, in each case, Permitted Investments
and Investments existing as of such date), all of the foregoing determined in
accordance with GAAP.
"Convertible Subordinated Debt" means the Obligations of the Company under
or in respect of the Company's Convertible Subordinated Notes due 2004.
"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 the Trustee
may give notice to the Company.
"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 the Note attached
hereto as Exhibit A, that do not include the information called for by footnotes
1 and 2 thereof.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the Holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature.
-4-
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock of any Person (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock).
"Equity Offerings" means any private offering, or any underwritten primary
public offering pursuant to an effective registration statement under the
Securities Act, in each case, of Equity Interests (other than Disqualified
Stock) of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Warehouse Facilities and
Indebtedness to finance Receivables or repurchase facilities in the ordinary
course of business) in existence on the date of this Indenture, until such
amounts are repaid.
"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.
"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 (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the net
obligations of such Person under (i) currency exchange or interest rate swap
agreements, currency exchange or interest rate cap agreements and currency
exchange or interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates or credit or other business risks, in any such
case in the ordinary course of business and not for speculative or investment
purposes.
"Holder" means a holder of any of the Notes.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable, (ii) all Capital
Lease Obligations of such Person, (iii) all obligations of such Person issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable and expense accruals
arising in the ordinary course of business), (iv) all obligations of such Person
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other
-5-
than obligations with respect to letters of credit securing obligations (other
than obligations described in (i) through (iii) above) entered into in the
ordinary course of business of such Person to the extent such letters of credit
are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the tenth Business Day following receipt by such Person
of a demand for reimbursement following payment on the letter of credit), (v)
all obligations of the type referred to in clauses (i) through (iv) of other
Persons and all dividends of other Persons for the payment of which, in either
case, such Person is responsible or liable, directly or indirectly, as obligor,
guarantor or otherwise, including by means of any Guarantee, (vi) all
obligations of the type referred to in clauses (i) through (iv) of other Persons
secured by any Lien on any property or asset of such Person (whether or not such
obligation is assumed by such Person), the amount of such obligation being
deemed to be the lesser of the value of such property or assets or the amount of
the obligation so secured and (vii) to the extent not otherwise included in this
definition, Hedging Obligations of such Person. The amount of Indebtedness of
any Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations at such date. Notwithstanding the foregoing, the term "Indebtedness"
does not include deposit liabilities of any Subsidiary, the deposits of which
are insured by the Federal Deposit Insurance Corporation or any successor agency
or Indebtedness of any Subsidiary to the Federal Home Loan Bank of San Francisco
or any successor thereto incurred in the ordinary course of business and secured
by qualifying mortgage loans or mortgage-backed securities or other collateral
permitted by the credit policies of the Federal Home Loan Bank of San Francisco.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting of Equity Interests of the Company
shall not be deemed to be an Investment.
"Leases" mean any and all agreements for the use, enjoyment or occupancy of
the Real Property and all buildings, improvements and fixtures of every kind or
nature situated thereon.
"Lien" means, with respect to any Person, any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind on the assets of such Person,
including any conditional sale or other title retention agreement or lease in
the nature thereof.
"Master Recapitalization Agreement" means the Master Recapitalization
Agreement dated as of March 29, 2001 by and among the Company and each of the
investors referenced therein.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP, excluding, however, (i) any
gain, together with any related provision for taxes on such gain, realized in
connection with any Asset Sale (including, without limitation, dispositions
pursuant to
-6-
sale and leaseback transactions) and (ii) any extraordinary gain or loss,
together with any related provision for taxes on such extraordinary gain or
loss.
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees, and sales commissions) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"Non-Domestic Person" means a Person not organized under the laws of the
United States, any State or territory thereof or the District of Columbia.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the Company
nor any of its Subsidiaries (a) provides credit support of any kind (including
any undertaking, agreement or instrument that would constitute Indebtedness), or
(b) is directly or indirectly liable (as a guarantor or otherwise); (ii) no
default with respect to which would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness (other than the Notes being offered hereby)
of the Company or any of its Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Subsidiaries.
"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 or any Vice-President of such Person.
"Officer's Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, principal financial officer or principal accounting officer of the
Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Permitted Investments" means an Investment by the Company or any
Subsidiary: (i) in a Subsidiary or in the Bank or a Person that will, upon the
making of such Investment, become a Subsidiary; provided, however, that the
primary business of the Subsidiary is a Related Business; (ii) in another Person
if as a result of such Investment such other Person is merged or consolidated
with or into, or transfers or conveys all or substan-
-7-
tially all its assets to, the Company or a Subsidiary; provided, however, that
such Person's primary business is a Related Business; (iii) comprised of Cash
Equivalents; (iv) comprised of Receivables owing to the Company or any
Subsidiary if created or acquired in the ordinary course of business and payable
or dischargeable in accordance with customary banking or trade terms; (v)
comprised of payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business; (vi)
comprised of stock, mortgages, deeds of trust, obligations or securities
received in settlement of debts created in the ordinary course of business and
owing to the Company or any Subsidiary or in satisfaction of judgments; (vii) in
any Person to the extent such Investment represents the non-cash portion of the
consideration received for an Asset Sale as permitted pursuant to Section 4.08;
or (viii) comprised of Receivables of the Company or any of its Wholly Owned
Subsidiaries.
"Permitted Liens" means, with respect to any Person: (a) pledges or
deposits by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such person or deposits of cash or United States government bonds
to secure surety or appeal bonds to which such person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case incurred in the ordinary course of business; (b) Liens imposed by law,
such as carriers', warehousemen's and mechanics' Liens, in each case for sums
not yet due or being contested in good faith by appropriate proceedings or other
Liens arising out of judgments or awards against such Person with respect to
which such Person shall then be proceeding with an appeal or other proceedings
for review; (c) Liens for property taxes not yet subject to penalties for non-
payment or which are being contested in good faith and by appropriate
proceedings; (d) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business; provided, however, that such letters of credit
do not constitute Indebtedness; (e) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for, licenses, rights of way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real property or
Liens incidental to the conduct of the business of such Person or to the
ownership of its properties which were not incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person; (f) Liens securing Indebtedness incurred to finance the
construction, purchase or lease of, or repairs, improvements or additions to,
property of such Person (but excluding Capital Stock of another Person);
provided, however, that the Lien may not extend to any other property owned by
such Person or any of its Subsidiaries at the time the Lien is incurred, and the
Indebtedness secured by the Lien may not be incurred more than 180 days after
the latest of the acquisition, completion of construction, repair, improvement,
addition or commencement of full operation of the property subject to the Lien;
(g) Liens on Receivables owned by the Company or a Subsidiary, as the case may
be, to secure Indebtedness permitted under clause (c) of Section 4.10; (h) Liens
existing on the date of this Indenture; (i) Liens on property or shares of
Capital Stock of another Person at the time such other Person becomes a
Subsidiary of such Person; provided, however, that such Liens are not created,
incurred or assumed in connection with, or in contemplation of, such other
Person becoming such a Subsidiary; provided further, however, that such Lien may
not extend to any other property owned by such Person or any of its
Subsidiaries; (j) Liens on property at the time such Person or any of its
Subsidiaries acquires the property, including, any acquisition by means of a
merger or consolidation with or into such Person or a Subsidiary of such Person;
provided, however, that such Liens are not created, incurred or assumed in
connection with, or in contemplation of such acquisition; provided further,
however, that the Liens may not extend to any other
-8-
property owned by such Person or any of its Subsidiaries; (k) Liens securing
Indebtedness or other obligations of a Subsidiary of such Person owing to such
Person or a Subsidiary of such Person; (l) Liens securing Hedging Obligations;
(m) liens on cash or other assets securing Warehouse Indebtedness of the Company
or its Subsidiaries; (n) Liens to secure any Permitted Refinancing Indebtedness
as a whole, or in part, with any Indebtedness permitted under this Indenture to
be incurred and secured by any Lien referred to in the foregoing clauses;
provided, however, that (x) such new Lien shall be limited to all or part of the
same property that secured the original Lien (plus improvements to or on such
property) and (y) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (A) the outstanding, principal
amount of, if greater, committed amount of the Indebtedness, at the time the
original Lien became a Permitted Lien and (B) an amount necessary to pay any
fees and expenses, including premiums, related to such refinancing, refunding,
extension, renewal or replacement; (o) Liens securing deposit liabilities of any
Subsidiary, the deposits of which are insured by the Federal Deposit Insurance
Corporation or any successor agency or Indebtedness of any Subsidiary to the
Federal Home Loan Bank of San Francisco or any successor thereto incurred in the
ordinary course of business and secured by qualifying mortgage loans or
mortgage-backed securities; (p) Liens incurred to secure the Convertible
Subordinated Debt; (q) Liens on assets of Subsidiaries that secure Non-Recourse
Debt of Subsidiaries; and (r) Liens incurred to secure Indebtedness of up to
$25,000,000 in aggregate principal amount which is permitted under Section 4.10
hereof.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; provided that: (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date no earlier than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness has a final
maturity date no earlier than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iv) such
Indebtedness is incurred either by the Company or by the Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (v) such Indebtedness may not include a Guarantee of
indebtedness of a Person that is not a Subsidiary of the Company.
"Permitted Warehouse Indebtedness" means Warehouse Indebtedness in
connection with a Warehouse Facility; provided, however, that (i) the assets as
to which such Warehouse Indebtedness relates are or, prior to any funding under
the related Warehouse Facility with respect to such assets, were eligible to be
recorded as held for sale or investment on the consolidated balance sheet of the
Company in accordance with GAAP, (ii) such Warehouse Indebtedness will be deemed
to be Permitted Warehouse Indebtedness (a) in the case of a Purchase Facility,
only to the extent the holder of such Warehouse Indebtedness has no contractual
recourse to the Company and its Subsidiaries to satisfy claims in respect of
such Permitted Warehouse Indebtedness in excess of the realizable value of the
Receivables financed thereby, and (b) in the case of any other Warehouse
Facility, only to the extent of the lesser of (A) the amount advanced by the
lender with respect to the Receivables financed under such Warehouse Facility,
and (B) the principal amount of such Receivables and (iii) any such Indebtedness
has not been outstanding in excess of 364 days.
-9-
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock", as to any Person, means any Equity Interest with
preferential right of payment of dividends or upon liquidation, dissolution or
winding up over Equity Interests of any other class of such Person.
"Purchase Facility" means any Warehouse Facility in the form of a purchase
and sale facility pursuant to which the Company or a Subsidiary of the Company
sells Receivables to a financial institution or investment bank.
"QIBs" means qualified institutional buyers as defined in Rule 144A.
"Real Property" means any interest in any real property or any portion
thereof whether owned in fee or leased or otherwise owned.
"Receivables" means consumer, mortgage and commercial loans, equipment or
other lease receivables and other assets purchased or originated by the Company
or any Subsidiary in the ordinary course of business; provided, however, that
for purposes of determining the amount of a Receivable at any time, such amount
shall be determined in accordance with GAAP, consistently applied, as of the
most recent practicable date.
"Related Business" means any consumer or commercial finance or banking
business, any financial advisory or financial service business, or any
investment or asset management business.
"Responsible Officer," when used with respect to the Trustee, means any
officer assigned to the Corporate Trust Administration office of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee assigned
to perform the duties of Trustee hereunder and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Collateral Agency and Security Agreement,
substantially in the form of Exhibit B hereto, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof and thereof.
-10-
"Security Documents" means, collectively, the Security Agreement and all
other security agreements, mortgages, deeds of trust, pledges, collateral
assignments or other instruments evidencing or creating any Security Interest in
favor of the Trustee in all or any portion of the Collateral, in each case as
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with the terms hereof and thereof.
"Security Interests" means the Liens on the Collateral created by the
Security Documents in favor of the Trustee for its benefit and the benefit of
the Holders of the Notes.
"Senior Indebtedness" means all Indebtedness of the Company or its
Subsidiaries that is not, by its terms, subordinated in right of payment to the
Notes.
"Senior Secured Debt" means the obligations of the Company under or in
respect of the Company's Senior Secured Notes due 2002.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Stated Maturity" means, with respect to any installment of principal or
interest on any series of Indebtedness, the date on which such payment of
principal or interest was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such principal or interest prior to the date
originally scheduled for the payment thereof.
"Strategic Investor Repurchase Transaction" means the repurchase,
redemption or other retirement for value of any Equity Interests of any
Subsidiary (a) from a strategic partner or investor owning such Equity Interests
that, except for such Investment, would not be an Affiliate of the Company or
its Subsidiaries and (b) in a transaction whose terms comply with the provisions
of Section 4.14 hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
limited liability company, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination
thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Transfer Restricted Security" means a security that bears or is required
to bear the legend set forth in Section 2.06 hereof.
-11-
"Trustee" means the party named as such in the preamble hereto until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Warehouse Facility" means any funding arrangement, including a Purchase
Facility, with a financial institution or other lender or purchaser, to the
extent (and only to the extent) funding thereunder is used exclusively to
finance or refinance the purchase or origination of Receivables by the Company
or a Subsidiary of the Company for the purpose of (i) pooling such Receivables
prior to securitization, (ii) sale or (iii) investment, in each case in the
ordinary course of business.
"Warehouse Indebtedness" means the greater of (x) the consideration
received by the Company or its Subsidiaries under a Warehouse Facility and (y)
in the case of a Purchase Facility, the book value of the Receivables financed
under such Warehouse Facility until such time as such Receivables are (i)
securitized, (ii) repurchased by the Company or its Subsidiaries or (iii) sold
by the counterparty under the Warehouse Facility to a Person who is not an
Affiliate of the Company.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02 OTHER DEFINITIONS.
Defined in
-Term Section
----- ----------
"Asset Sale Offer".......................................... 4.08
"Asset Sale Offer Amount"................................... 4.08
"Asset Sale Offer Period"................................... 4.08
"Asset Sale Purchase Date".................................. 4.08
"Clearstream"............................................... 2.01
"Change of Control Offer"................................... 4.07
"Change of Control Offer Period"............................ 4.07
"Change of Control Payment"................................. 4.07
"Change of Control Purchase Date"........................... 4.07
"Covenant Defeasance"....................................... 8.03
"Custodian"................................................. 6.01
"DTC"....................................................... 2.03
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Defined in
-Term Section
----- ----------
"Euroclear"................................................. 2.01
"Event of Default".......................................... 6.01
"Excess Proceeds"........................................... 4.08
"Global Note"............................................... 2.01
"incur"..................................................... 4.10
"Legal Defeasance".......................................... 8.02
"Legal Holiday"............................................. 12.13
"Note Custodian"............................................ 2.03
"outstanding"............................................... 2.08
"Paying Agent".............................................. 2.03
"Registrar"................................................. 2.03
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;
"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 SEC rule under the TIA have
the meanings so assigned to them.
-13-
SECTION 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions;
(6) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time; and
(7) "herein," "hereof," "hereto" and other words of similar import refer
to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
ARTICLE 2
THE NOTES
SECTION 2.01 FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Notes and any
notation, legend or endorsement on them. Each Note shall be dated the date of
its issuance and shall show the date of its authentication. The Notes shall be
issued in minimum denominations of $1,000 and integral multiples of $1,000 in
excess 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.
The Notes shall be issued initially in the form of one or more Global Notes
(the "Global Notes"), which shall be deposited on behalf of the purchasers of
the Notes represented thereby with the Depositary at its New York office (or
with the Trustee as custodian for the Notes), and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Global Note may from time to time be increased or
-14-
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee as hereinafter provided.
The Global Note shall provide that it shall represent the aggregate amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be reduced
or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of the Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee or the Note Custodian (as hereinafter defined), at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" for the Euroclear System
("Euroclear") and the "Management Regulations" and "Instructions to
Participants" of Clearstream Banking S.A. ("Clearstream") shall be applicable to
interests in the Global Note that are held by the Agent Members through
Euroclear or Clearstream.
Except as set forth in Section 2.06 hereof, the Global Note may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
(a) Book-Entry Provisions. This Section 2.01(a) shall apply only to the
Global Note deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(a) and Section 2.02, authenticate and deliver the Global Note that
(i) shall be registered in the name of the Depositary or the nominee of the
Depositary and (ii) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instructions or held by the Trustee as custodian
for the Depositary.
Agent Members shall have no rights either under this Indenture with respect
to the Global Note held on their behalf by the Depositary or by the Trustee as
custodian for the Depositary or under such Global Note, and the Depositary may
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 Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of
an owner of a beneficial interest in the Global Note.
(b) Definitive Notes. Notes issued in certificated form shall be
substantially in the form of Exhibit A attached hereto (but without including
the text referred to in footnotes 1 and 2 thereto).
SECTION 2.02 EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature.
-15-
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company, which may be
delivered from time to time, signed by two Officers, authenticate up to
$169,354,350 in aggregate principal amount of Notes for original issue. The
aggregate principal amount of Notes outstanding at any time may not exceed
$169,354,350 except as provided in Section 2.07 hereof.
The Trustee may, at the expense of the Company, 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 2.03 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency within the City and State of New York where Notes may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the Notes and
of their transfer and exchange. The Company may appoint one or more co-
registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee 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 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 Note.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as custodian with respect to the Global Note (the "Note
Custodian").
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
Prior to each due date of principal and interest on the Notes, the Company
shall deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent other
than the Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Trustee all money held by the Paying Agent for
the payment of principal of and premium, if any, and interest on the Notes, and
will notify the Trustee in writing 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
-16-
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 delivered to the
Trustee. If 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 2.05 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA (S) 312(a).
SECTION 2.06 TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes are
presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal amount of
Definitive Notes of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his or her attorney, duly authorized in writing and
(ii) in the case of a Definitive Note that is a Transfer Restricted
Security, such request shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of such Holder,
without transfer, or such Transfer Restricted Security is being
transferred to the Company, a certification to that effect from such
Holder (in substantially the form of Exhibit C-1 hereto);
(B) if such Transfer Restricted Security is being transferred to
a QIB in accordance with Rule 144A or pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under the Securities
Act, a certification to that effect from such Holder (in substantially
the form of Exhibit C-1 hereto);
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(C) if such Transfer Restricted Security is being transferred to
an Institutional Accredited Investor within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, a
certification to that effect from such Holder (in substantially the
form of Exhibit C-1 hereof); or
(D) if such Transfer Restricted Security is being transferred in
reliance on any other exemption from the registration requirements of
the Securities Act, a certification to that effect from such Holder
(in substantially the form of Exhibit C-1 hereto) and an Opinion of
Counsel from such Holder or the transferee reasonably acceptable to
the Company and to the Registrar to the effect that such transfer is
in compliance with the Securities Act.
(b) Transfer of a Beneficial Interest in the Global Note for a
Definitive Note.
(i) Any Person having a beneficial interest in the Global Note may,
upon request, subject to the Applicable Procedures, exchange such
beneficial interest for a Definitive Note. Upon receipt by the Trustee of
written instructions or such other form of instructions as is customary for
the Depositary (or Euroclear or Clearstream, if applicable) from the
Depositary or its nominee on behalf of any Person having a beneficial
interest in such Global Note, and, in the case of a Transfer Restricted
Security, the following additional information and documents (all of which
may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification to that effect from such Person (in substantially the
form of Exhibit C-2 hereto);
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A or pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under the Securities
Act, a certification to that effect from the transferor (in
substantially the form of Exhibit C-2 hereto);
(C) if such beneficial interest is being transferred to an
Institutional Accredited Investor within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, a
certification to that effect from the transferor (in substantially the
form of Exhibit C-2 hereto), or
(D) if such beneficial interest is being transferred in reliance
on any other exemption from the registration requirements of the
Securities Act, a certification to that effect from the transferor (in
substantially the form of Exhibit C-2 hereto) and an Opinion of
Counsel to the effect that such transfer is in compliance with the
Securities Act,
the Trustee or the Note Custodian, at the direction of the Trustee, shall,
in accordance with the standing instructions and procedures existing
between the Depositary and the Note Custodian, cause the aggre-
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gate principal amount of the Global Note to be reduced accordingly and,
following such reduction, the Company shall execute and, the Trustee shall
authenticate and deliver to the transferee a Definitive Note in the
appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial interest in
the Global Note pursuant to this Section 2.06(b) 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. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Following any
such issuance of Definitive Notes, the Trustee, as Registrar, shall
instruct the Depositary to reduce or cause to be reduced the aggregate
principal amount at maturity of the applicable Global Note to reflect the
transfer.
(c) Restrictions on Transfer and Exchange of the Global Note.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (e) of this Section 2.06), a Global Note
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(d) Transfer and Exchange of a Definitive Note for a Beneficial Interest
in the Global Note. A Definitive Note may not be exchanged for a beneficial
interest in the Global Note except, subject to the Applicable Procedures, upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Note, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Trustee, and, in the case of a
Transfer Restricted Security, the following additional information and
documents (all of which may be submitted by facsimile):
(i) if such beneficial interest is being transferred to the Person
designated by the Depositary as being the beneficial owner, a certification
to that effect from such Person (in substantially the form of Exhibit C-3
hereto);
(ii) if such beneficial interest is being transferred to QIB in
accordance with the Rule 144A or pursuant to an exemption from registration
in accordance with Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act, a certification
to that effect from the transferor (in substantially the form of Exhibit C-
3 hereto);
(iii) if such beneficial interest is being transferred to an
Institutional Accredited Investor within the meaning of Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act, a certification
to that effect from the transferor (in substantially the form of Exhibit C-
3 hereto); or
(iv) if such beneficial interest is being transferred in reliance on
any other exemption from the registration requirement of the Securities
Act, a certification to that effect from the transferor (in substantially
the form of Exhibit C-3 hereto) and an Opinion of Counsel from the
transferee or the transferor reasonably acceptable to the Company and to
the Registrar to the effect that such transfer is in compliance with the
Securities Act,
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the Trustee shall cancel such Definitive Note in accordance with Section
2.11 hereof and cause, or direct the Note Custodian to cause, in accordance
with the standing instructions and procedures existing between the
Depositary and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global
Note is then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the Trustee
shall authenticate a new Global Note in the appropriate principal amount.
(e) Authentication of Definitive Notes in Absence of Depositary. If at any
time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global
Note and a successor Depositary for the Global Note is not appointed by the
Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Notes under this
Indenture; or
(iii) there shall have occurred and be continuing an Event of Default
or any event which after notice or lapse of time or both would be an Event
of Default with respect to the Notes,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Note in exchange for such Global Note.
(f) Legends.
(i) Except as permitted by the following paragraphs (ii) and (iii),
each Note certificate evidencing Global Notes and Definitive Notes (and all
Notes issued in exchange therefore or substitution thereof) shall bear
legends in substantially the following form:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"(AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (C) IT IS AN
ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER
THE SECURITIES ACT (AN "ACCREDITED INVESTOR")), (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE
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SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR IN
COMPLIANCE WITH RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT,
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS NOTE, WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS NOTE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE
AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Note that
does not bear the legend set forth in (i) above and rescind any
restrictions on the transfer of such Transfer Restricted Security upon
receipt of a certification from the transferring holder substantially
in the form of Exhibit C-1 hereto; and
(B) in the case of any Transfer Restricted Security represented
by a Global Note, such Transfer Restricted Security shall not be
required to bear the legend set forth in (i) above, but shall continue
to be subject to the provisions of Section 2.06(a) and (b) hereof;
provided, however, that with respect to any request for an exchange of
a Transfer Restricted Security that is represented by a Global Note
for a Definitive Note that does not bear the legend set forth in (i)
above, which request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that such request is
being made pursuant to Rule 144 (such certification to be
substantially in the form of Exhibit C-2 hereof).
(iii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
in reliance on any exemption from the regis-
-21-
tration requirements of the Securities Act (other than exemptions pursuant
to Rule 144A or Rule 144 under the Securities Act) in which the Holder or
the transferee provides an Opinion of Counsel to the Company and the
Registrar in form and substance reasonably acceptable to the Company and
the Registrar (which Opinion of Counsel shall also state that the transfer
restrictions contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Note that
does not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transferred Restricted Security;
and
(B) in the case of any Transfer Restricted Security represented
by a Global Note, such Transfer Restricted Security shall not be
required to bear the legend set forth in (i) above but shall continue
to be subject to the provisions of Section 2.06(a) and (b) hereof.
(g) Cancellation and/or Adjustment of the Global Note. At such time as all
beneficial interests in the Global Note have been exchanged for Definitive
Notes, redeemed, repurchased or canceled, the 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
the Global Note is exchanged for Definitive Notes, redeemed, repurchased or
canceled, 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 the Note Custodian, at the direction of the Trustee, to
reflect such reduction.
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Notes and the
Global Note at the Registrar's request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, 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 any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections
3.07, 4.07, 4.08 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and the Global Note issued upon any
registration of transfer or exchange of Definitive Notes or the Global Note
shall be the valid obligations of the Com-
-22-
pany, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Definitive Notes or Global Note surrendered upon
such registration of transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to exchange Notes
during a period beginning at the opening of business 15 days before
the day of any selection of Notes for redemption under Section 3.02
hereof and ending at the close of business on the day of selection; or
(B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed 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.
(vi) 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 and
premium, if any, on such Notes, and neither the Trustee, any Agent nor the
Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and the Global
Note in accordance with the provisions of Section 2.02 hereof.
The Registrar may rely on information set forth in a certificate
substantially in the form of Exhibit C-1, C-2 or C-3 hereto, and other
certificates and opinions received pursuant to this Section 2.06 and, in the
absence of receipt of such a certificate or opinion, shall not be deemed to have
knowledge of a transfer of an interest in a Global Note absent actual knowledge
of such transfer.
SECTION 2.07 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon the written order of
the Company signed by one Officer of the Company, shall authenticate a
replacement Note if the Trustee's requirements and the requirements of Section
8-405(a)(1) of the Uniform Commercial Code are met. If required by the Trustee
or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the reasonable 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 may charge such
Holder for its expenses and the expenses of the Trustee (including without
limitation attorneys' fees and expenses) in replacing a Note.
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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.
SECTION 2.08 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, 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 as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof (other than
a mutilated Note surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser. A mutilated Note ceases to be outstanding upon
surrender of such Note and replacement thereof pursuant to Section 2.07 hereof.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09 TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company shall be considered as though not outstanding, except that for
the purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes that a Trustee knows are so
owned shall be so disregarded.
SECTION 2.10 TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate Definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
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SECTION 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be
delivered to the Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee
in writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. The Company shall fix or cause to be
fixed each such special record date and payment date, provided that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
the Company (or, upon the written request of the Company, the Trustee in the
name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
SECTION 2.13 CUSIP NUMBERS, ETC.
The Company in issuing the Notes may use "CUSIP", "CINS", "ISIN"
or "private placement" numbers (if then generally in use), and, if so, the
Trustee shall indicate the "CUSIP", "CINS", "ISIN" or "private placement"
numbers of the Notes in notices of redemption and related materials as a
convenience to Holders of Notes; provided that any such notice may state that no
--------
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of redemption and related materials.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days (unless the Trustee consents to a shorter period) but not more
than 60 days before a redemption date, an Officer's Certificate setting forth
(i) the clause of this Indenture pursuant to which the redemption shall occur,
(ii) the redemption date, (iii) the principal amount of Notes to be redeemed and
(iv) the redemption price.
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SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes 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 such method as the Trustee shall deem fair and
appropriate. In the event of partial redemption by lot, the particular Notes to
be redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03 NOTICE OF REDEMPTION.
Subject to the provisions of Section 4.08, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price and the amount of accrued interest;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
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(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; and
(i) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portions thereof) to be redeemed
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding after such partial
redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officer's Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional. Upon surrender to the Paying Agent, such Notes shall be paid at the
Redemption Price stated in the notice, plus accrued interest to the redemption
date. Failure to give notice or any defect in the notice to a Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE.
On or before 10:00 a.m. Eastern Time on the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption price of and accrued interest on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption whether or not such
Notes are presented for payment. If a Note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid interest shall be paid to the Person in whose name such Note
was registered at the close of business on such record date. If any Note called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal from the redemption date until such principal is
paid, and, to the extent lawful, on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
SECTION 3.06 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed 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 unredeemed portion of the Note surrendered.
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SECTION 3.07 OPTIONAL REDEMPTION.
The Company may redeem the Notes in whole or in part, in integral
multiples of $1,000 only, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest thereon to
the applicable redemption date if redeemed during the twelve-month period
beginning on __________ of the years indicated below:
Year Percentage
---- -------------
2001........................................... 106
2002........................................... 103
2003 and thereafter............................ 100
For purposes of this Article 3, a repurchase by the Company of the
Notes in open market purchase transactions shall not be deemed to be a
redemption.
Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08 MANDATORY REDEMPTION.
Except as set forth under Sections 4.07 and 4.08, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent (other than the Company or a
Subsidiary), holds on that date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest then due. Such Paying Agent shall return to the Company, no
later than five Business Days following the due date for payment, any money
(including accrued interest, if any) that exceeds such amount of principal,
premium, if any, and interest required for payment on the Notes.
The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal at the
applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
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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, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any 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
2.03.
SECTION 4.03 REPORTS.
(a) Within 15 days after such information would be required to be
filed (or is filed) with the SEC and whether or not required by the rules
and regulations of the SEC, so long as any Notes are outstanding, the
Company shall furnish to the Trustee (i) all quarterly and annual financial
information that would be required to be contained in a filing with the SEC
on Forms 10-Q and 10-K if the Company were required to file such Forms,
including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information
only, a report thereon by the Company's certified independent accountants
and (ii) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
(b) For so long as any Notes remain outstanding, the Company
shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4).
SECTION 4.04 COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officer's Certificate stating that a
review of the activities of the Company and its subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officer with a view to determining whether each has kept, observed,
performed and fulfilled in all respects its obligations under this
Indenture and further stating, as to such Officer signing such certificate,
that to the best of his knowledge each has kept, observed, performed and
fulfilled each and every covenant contained in
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this Indenture and is not in any respect in default in the performance or
observance of any of the terms, provisions and conditions hereof or thereof
(or, if such Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he may have knowledge and
what action each is taking or proposes to take with respect thereto).
(b) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, within five days after becoming aware
of (i) any Default or Event of Default or (ii) any event of default under
any other mortgage, indenture or instrument as that term is used in Section
6.01(iv) which permits an acceleration that could become an Event of
Default, an Officer's Certificate specifying such Default, Event of Default
or event of default and what action the Company is taking or proposes to
take with respect thereto.
SECTION 4.05 TAXES
The Company shall, and shall cause each of its Subsidiaries to,
pay prior to delinquency all material taxes, assessments, and governmental
levies except as contested in good faith and by appropriate proceedings.
SECTION 4.06 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
SECTION 4.07 CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 10l% of the aggregate principal amount thereof plus accrued and
unpaid interest thereon to the date of purchase (the "Change of Control
Payment").
Within 10 days following any Change of Control, the Company shall
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes pursuant to
the procedures required by this Indenture and described in such notice. The
Company shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with the repurchase of the Notes as
a result of a Change of Control.
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The Change of Control Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Change of Control Offer
Period"). No later than five Business Days after the termination of the Change
of Control Offer Period (the "Change of Control Purchase Date"), the Company
shall purchase all Notes tendered in response to the Change of Control Offer.
Payment for any Notes so purchased shall be made in the same manner as interest
payments are made.
If the Change of Control Purchase Date is on or after an interest
record date and on or before the related interest payment date, any accrued and
unpaid interest shall be paid to the Person in whose name a Note is registered
at the close of business on such record date, and no additional interest shall
be payable to Holders who tender Notes pursuant to the Change of Control Offer.
On the Change of Control Purchase Date, the Company shall, to the
extent lawful, (a) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (b) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (c) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Purchase Date.
SECTION 4.08 ASSET SALES.
The Company shall not consummate an Asset Sale in excess of
$1,000,000 unless (i) the Company receives consideration at the time of such
Asset Sale at least equal to the fair market value of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company is in the form of Cash
Equivalents; provided that the amount of (A) any liabilities (as shown on the
Company's most recent balance sheet excluding contingent liabilities and trade
payables) of the Company that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company from
further liability and (B) any securities, notes or other obligations received by
the Company from such transferee that are promptly, but in no event more than
30 days after receipt, converted by the Company into cash (to the extent of the
cash received), shall be deemed to be cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an
Asset Sale in an amount less than $5,000,000, the Company may apply such Net
Proceeds, (a) to permanently reduce Senior Indebtedness (other than the Notes)
of the Company, or (b) to an Investment (excluding Guarantees of Indebtedness or
other obligations), the making of a capital expenditure or the acquisition of
other tangible assets, in each case in or with respect to a Related Business.
Any Net Proceeds from Asset Sales that are not applied or invested as provided
in the first sentence of this paragraph shall be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5,000,000,
unless the Company uses such Excess Proceeds within 90 days to
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increase the Bank's capital, the Company shall be required to make an offer to
all Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that may be purchased out of one-half of the Excess Proceeds, at
an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest thereon to the date of purchase, in
accordance with the procedures set forth in this Indenture. To the extent that
the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less
than one-half of the Excess Proceeds, the Company may use any remaining Excess
Proceeds (together with one-half of the Excess Proceeds) for general corporate
purposes. Upon completion of such offer to purchase, the amount of Excess
Proceeds shall be reset at zero.
An Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Asset Sale Offer Period"). No
later than five Business Days after the termination of the Asset Sale Offer
Period (the "Asset Sale Purchase Date"), the Company shall purchase the
principal amount of Notes required to be purchased pursuant to this covenant
(the "Asset Sale Offer Amount") or, if less than the Asset Sale Offer Amount has
been tendered, all Notes tendered in response to the Asset Sale Offer. Payment
for any Notes so purchased shall be made in the same manner as interest payments
are made.
If the Asset Sale Purchase Date is on or after an interest record
date and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
On or before the Asset Sale Purchase Date, the Company shall, to
the extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Asset Sale Offer Amount of Notes or portions thereof tendered
pursuant to the Asset Sale Offer, or if less than the Asset Sale Offer Amount
has been tendered, all Notes tendered, and shall deliver to the Trustee an
Officers' Certificate stating that such Notes or portions thereof were accepted
for payment by the Company in accordance with the terms of this covenant. The
Company, the Depository or the Paying Agent, as the case may be, shall promptly
(but in any case not later than five days after the Asset Sale Purchase Date)
mail or deliver to each tendering Holder an amount equal to the purchase price
of the Notes tendered by such Holder and accepted by the Company for purchase,
and the Company shall promptly issue a new Note, and the Trustee, upon written
request from the Company signed by two Officers shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Asset Sale
Purchase Date.
SECTION 4.09 RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Subsidiaries' Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company) or to the
direct or indirect holders of the Company's or any of its Subsidiaries' Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or
dividends or distributions payable to the Company or any Subsidi-
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ary); (ii) purchase, redeem or otherwise acquire or retire for value (including
without limitation in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company or any direct or indirect parent of
the Company or other Affiliate of the Company (other than any such Equity
Interests owned by the Company or any Subsidiary of the Company); (iii) make any
payment on or with respect to, or purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness that is subordinated to the Notes (other
than Notes, Existing Indebtedness and Convertible Subordinated Debt), except a
payment of interest or principal at Stated Maturity; or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i) through
(iv) above being collectively referred to as "Restricted Payments"), unless, at
the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) at the time of and immediately after giving effect to such
Restricted Payment, the Company would be able to incur at least $1.00 of
additional Indebtedness pursuant to the test in the first sentence of
Section 4.10; and
(c) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its Subsidiaries after
the date of this Indenture (excluding Restricted Payments permitted by
clauses (x) and (y) of the next succeeding paragraph), is less than the sum
of (i) the Consolidated Net Income of the Company for the period (taken as
one accounting period) from the beginning of the first fiscal quarter
commencing after the date of this Indenture to the end of the Company's
most recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less such deficit),
plus (ii) the aggregate net cash proceeds received by the Company from the
issue or sale since the date of this Indenture of Equity Interests (other
than Disqualified Stock) or of debt securities that have been converted
into such Equity Interests (other than Equity Interests or convertible debt
securities sold to a Subsidiary of the Company and other than Disqualified
Stock or debt securities that have been converted into Disqualified Stock),
(iii) to the extent that any Restricted Investment that was made after the
date of this Indenture is sold for cash or otherwise liquidated or repaid
for cash, the lesser of (A) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any) and (B) the
initial amount of such Restricted Investment, (iv) any dividends received
by the Company or a Wholly Owned Subsidiary the Company, plus (v)
$25,000,000.
The foregoing provisions shall not prohibit: (u) the payment of
any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of this
Indenture; (v) the payment of any dividend on or the redemption, repurchase,
retirement or other acquisition of Bank Trust Preferred Stock; (w) the
redemption, repurchase, retirement or other acquisition of any Equity Interests
in exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of other Equity Interests (other
than any Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement or
other acquisition shall be excluded from clause (c)(ii) of the preceding
paragraph; (x) the defeasance, redemption or repurchase of subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness or the substantially concurrent sale (other than to a
Subsidiary of the Company) of Equity Interests (other
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than Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (c)(ii) of the preceding paragraph;
(y) the payment of any dividends on or the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company or
any Subsidiary of the Company held by any member of the Company's (or any of its
Subsidiaries') management pursuant to any management equity subscription
agreement or stock option agreement or other management agreement or plan;
provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $5,000,000 in any twelve-
month period plus the aggregate cash proceeds received by the Company during
such twelve-month period from any reissuance of Equity Interests by the Company
to members of management of the Company and its Subsidiaries; and (z) the
repurchase, redemption or other retirement for value of any Equity Interests of
any Subsidiary in a Strategic Investor Repurchase Transaction; and no Default or
Event of Default shall have occurred and be continuing immediately after such
transaction.
SECTION 4.10 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume, guaranty or
otherwise become directly or indirectly liable with respect to (collectively,
"incur") any Indebtedness (including Acquired Debt) and the Company shall not
permit any of its Subsidiaries other than the Bank or any Subsidiary of the Bank
to issue any shares of Preferred Stock; provided, however, that the Company or
any Subsidiary may incur Indebtedness (including Acquired Debt) or any
Subsidiary may issue Preferred Stock if, on the date of such incurrence and
after giving effect thereto, the Company's Consolidated Leverage Ratio does not
exceed 2.0 to 1.0, or 1.5 to 1.0 in the case of any Indebtedness in a principal
amount in excess of $75,000,000 (less any subordinated Indebtedness issued
pursuant to the Recapitalization Agreement) which is subordinated to the Notes.
The foregoing provisions shall not apply to:
(a) Indebtedness of the Company and its Subsidiaries existing on
the date of this Indenture;
(b) the incurrence by the Company of Indebtedness represented by
the Notes, the Convertible Subordinated Debt and up to $75,000,000 of
Indebtedness (less any subordinated Indebtedness issued pursuant to the
Recapitalization Agreement) which is subordinated to the Notes and which matures
after the Stated Maturity of the Notes;
(c) the incurrence of Permitted Warehouse Indebtedness by the
Company or any of its Subsidiaries, and any Guarantee by the Company of such
Indebtedness incurred by a Subsidiary, provided, however, that to the extent any
such Indebtedness of the Company or a Subsidiary ceases to constitute Permitted
Warehouse Indebtedness, such Indebtedness shall be deemed to be incurred at such
time by the Company or such Subsidiary, as the case may be;
(d) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund, Indebtedness
that was permitted by this Indenture to be incurred or that was outstanding at
the date of this Indenture;
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(e) the incurrence by the Company or a Subsidiary of Hedging Obligations
directly related to (i) Indebtedness of the Company or a Subsidiary incurred in
conformity with the provisions of this Indenture, (ii) Receivables held by the
Company or its Subsidiaries pending sale, (iii) Receivables of the Company or
its Subsidiaries that have been sold, (iv) Receivables that the Company or a
Subsidiary reasonably expects to purchase or commit to purchase, finance or
accept as collateral, or (v) other assets owned or financed by the Company or
its Subsidiaries in the ordinary course of business; provided, however, that, in
the case of each of the foregoing clauses (i) through (v), such Hedging
Obligations are eligible to receive hedge accounting treatment in accordance
with GAAP as applied by the Company and its Subsidiaries on the date of this
Indenture;
(f) Indebtedness of the Subsidiaries to the Company to the extent that
such Indebtedness constitutes a Permitted Investment of the Company of the type
permitted under the definition of Permitted Investments;
(g) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness owing to the Company or any of its Subsidiaries;
provided, however, that (i) any subsequent issuance or transfer of any Capital
Stock which results in any such Indebtedness being held by a Person other than a
Subsidiary and (ii) any sale or transfer of any such Indebtedness to a Person
that is not either the Company or a Subsidiary shall be deemed, in each case, to
constitute the incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be;
(h) the incurrence by a Subsidiary of Non-Recourse Debt; provided,
however, that if any such Indebtedness ceases to be Non-Recourse Debt of the
Subsidiary, such event shall be deemed to constitute an incurrence of
Indebtedness by a Subsidiary of the Company;
(i) the maintenance by the Company or any of its Subsidiaries of
Indebtedness incurred to finance Receivables or repurchase facilities in the
ordinary course of business; and
(j) the incurrence by the Company and its Subsidiaries of Indebtedness
in an aggregate principal amount which, together with the principal amount of
all Indebtedness of the Company and its Subsidiaries outstanding on the date of
incurrence (other than Indebtedness otherwise permitted by this Section 4.10),
does not exceed $25,000,000.
SECTION 4.11 LIENS.
The Company shall not, and shall not permit any of its
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Lien for the benefit of any Indebtedness ranking pari passu with
or junior to the Notes, other than the Liens created by the Notes, this
Indenture and the Security Documents and the Permitted Liens, upon any property
or assets of the Company or any Subsidiary of the Company or any shares of stock
or debt of any Subsidiary of the Company which owns property or assets, now
owned or hereafter acquired, unless (i) if such lien secures Indebtedness which
is pari passu with the Notes, then the Notes are secured on an equal and ratable
basis or (ii) if such lien secures Indebtedness which is junior to the Notes,
any such lien shall be junior to a lien granted to the holders of the Notes.
SECTION 4.12 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 otherwise cause to become
effective any encumbrance or restriction on the ability of any Subsidiary to
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(i)(a) pay dividends or make any other distributions to the Company or any of
its Subsidiaries (1) on its Capital Stock or (2) with respect to any other
interest or participation in, or measured by, its profits, or (b) pay any
indebtedness owed to the Company or any of its Subsidiaries, (ii) make loans or
advances to the Company or any of its Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date of this Indenture, (b) Warehouse
Facilities as in effect as of the date of the date of this Indenture, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, additions, replacements or refinancings thereof; provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, additions, replacements or refinancings are no more restrictive with
respect to such dividend and other payment restrictions than those contained in
the Warehouse Facilities as in effect on the date of this Indenture, (c) this
Indenture and the Notes, (d) applicable law, regulation or order of or agreement
with a governmental authority, (e) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Subsidiaries as
in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (f) by reason of customary non-assignment provisions in Leases
entered into in the ordinary course of business and consistent with past
practices, (g) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, or (h) Permitted Refinancing
Indebtedness; provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced.
SECTION 4.13 BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Subsidiary to,
engage in any line of business that is not a Related Business (except as a
result of Investments in other businesses made or acquired in connection with
the activities or conduct of the Related Businesses in the ordinary course of
business by the Company and its Subsidiaries, including Investments obtained as
a result of the foreclosure of Liens securing amounts lent by the Company or any
of its Subsidiaries).
SECTION 4.14 TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Subsidiary with an unrelated Person and (ii)
the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $2,000,000, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of Directors
and (b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving
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aggregate consideration in excess of $10,000,000, in addition to such Officers'
Certificate, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an investment banking firm
of national standing which is not an Affiliate of the Company; provided,
however, that such fairness opinion shall not be required with respect to a
transaction that is made in the ordinary course of business of the Company or
such Subsidiary, as the case may be, and is consistent with the past business
practice of the Company or such Subsidiary. Notwithstanding the foregoing, the
following shall not be deemed Affiliate Transactions: (i) any employment
agreement entered into by the Company or any of its Subsidiaries in the ordinary
course of business and consistent with the past practice of the Company or such
Subsidiary, (ii) any issuance of securities, or other payments, compensation,
benefits, 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 in the ordinary course of business and
consistent with the past practice of the Company or such Subsidiary, (iii) the
grant of stock options or similar rights to employees and directors of the
Company pursuant to plans approved by the Board of Directors in the ordinary
course of business and consistent with the past practice of the Company or such
Subsidiary, (iv) loans or advances to employees in the ordinary course of
business in accordance with the past practice of the Company or its
Subsidiaries, but in any event not to exceed $500,000 in aggregate principal
amount outstanding at any one time, (v) the payment of reasonable fees to
directors of the Company and its Subsidiaries who are not employees of the
Company or its Subsidiaries, (vi) transactions between or among the Company
and/or its Subsidiaries and (vii) Restricted Payments and Permitted Investments
(other than Strategic Investor Repurchase Transactions) that are permitted by
Section 4.09.
ARTICLE 5
SUCCESSORS
SECTION 5.01 MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether
or not the Company is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions, to another Person unless: (i) the
Company is the surviving corporation or the entity or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia; (ii) the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company) or the entity or Person to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made assumes
all the Obligations of the Company under the Notes, this Indenture and the
Security Documents pursuant to a supplemental Indenture in a form reasonably
satisfactory to the Trustee; and (iii) immediately after such transaction no
Default or Event of Default exists.
The Company shall deliver to the Trustee prior to the consummation
of the proposed transaction an Officer's Certificate to the foregoing effect and
an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture if applicable comply with this Indenture. The Trustee
shall be entitled to conclusively rely and shall be fully protected in acting or
refraining from acting upon such Officer's Certificate and Opinion of Counsel.
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SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; provided, however, that the Company shall not be released
or discharged from the obligation to pay the principal of or interest on the
Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of
interest on the Notes;
(ii) default in payment when due of the principal of or
premium, if any, on the Notes;
(iii) failure by the Company for 60 days after notice to
comply with any of its other covenants, agreements or warranties in this
Indenture, the Notes or the Security Documents;
(iv) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company (or the
payment of which is guaranteed by the Company) whether such Indebtedness
or guarantee now exists, or is created after the date hereof, which
default results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated, aggregates
$5.0 million or more;
(v) failure by the Company or any of its Significant
Subsidiaries to pay final judgments aggregating in excess of $5.0
million, which judgments are not paid, discharged or stayed for a period
of 60 days;
(vi) other than as permitted under the Security Documents
or the terms of this Indenture, any of the Security Documents cease to
be in full force and effect, or any of the Security Documents cease to
give the Trustee the Security Interests, rights, powers and privileges
purported to be created thereby, or any Security Document is declared
null and void, or the Company shall deny or disaffirm
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any of its obligations under any Security Document or any Collateral
becomes subject to any Lien other than Permitted Liens;
(vii) the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:
(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,
(D) makes a general assignment for the benefit of
its creditors, or
(E) generally is not paying its debts as they become
due; or
(viii) a court of competent jurisdiction enters an order or
decree in an involuntary case or proceeding under any Bankruptcy Law
that:
(A) is for relief against the Company or any of its
Significant Subsidiaries in an involuntary case;
(B) appoints a Custodian of the Company or any of
its Significant Subsidiaries or for all or substantially all of their
property; or
(A) orders the liquidation of the Company or any of
its Significant Subsidiaries;
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.
SECTION 6.02 ACCELERATION.
If an Event of Default (other than an Event of Default specified
in clauses (vii) and (viii) of Section 6.01, with respect to the Company or any
Significant Subsidiary) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the then
outstanding Notes by written notice to the Company and the Trustee, may declare
the unpaid principal of and any accrued interest on all the Notes to be due and
payable immediately. Upon such declaration the principal and interest shall be
due and payable immediately. If an Event of Default specified in clause (vii) or
(viii) of Section 6.01 occurs with respect to
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the Company or any Significant Subsidiary, such an amount shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. In the event of a declaration of
acceleration of the Notes because an Event of Default in Section 6.01(iv) hereof
has occurred and is continuing, such declaration of acceleration shall be
automatically annulled if the holders of the Indebtedness described in Section
6.01(iv) hereof have rescinded the declaration of acceleration in respect of
such Indebtedness within 15 Business Days thereof and if (i) the annulment of
such acceleration would not conflict with any judgment or decree of a court of
competent jurisdiction, (ii) all existing Events of Default, except non-payment
of principal, interest which shall have become due solely because of the
acceleration, have been cured or waived and (iii) the Company has delivered an
Officer's Certificate to the Trustee to the effect of clauses (i) and (ii)
above. In accordance with the provisions of Section 6.04, the Holders of a
majority in principal amount of the then outstanding Notes by written notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal or interest that has become due solely
because of the acceleration) have been cured or waived.
SECTION 6.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal and interest on
the Notes or to enforce the performance of any provision of the Notes, this
Indenture or the Security Documents.
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.
Each Holder, by accepting a Note, acknowledges that the exercise
of remedies by the Trustee with respect to the Collateral is subject to the
terms and conditions of the Security Documents and the proceeds received upon
realization of the Collateral shall be applied by the Trustee in accordance with
the Security Agreement and Section 6.10 of this Indenture.
SECTION 6.04 WAIVER OF PAST DEFAULTS.
Holders of a majority in aggregate principal amount of the Notes
then outstanding by written notice to the Trustee may on behalf of the Holders
of all of the Notes waive any existing Default or Event of Default and its
consequences under this Indenture (except a continuing Default or Event of
Default in the payment of interest or premium on, or the principal of, any Note
held by a non-consenting Holder or a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Holder affected
thereby). Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
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SECTION 6.05 CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on it
hereunder or under the Security Documents. However, the Trustee may refuse to
follow any direction that conflicts with law, this Indenture or the Security
Documents or that the Trustee determines may be unduly prejudicial to the rights
of other Holders of Notes or that may involve the Trustee in personal liability.
SECTION 6.06 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture, the Notes or the Security Documents only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder 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;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder 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 the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder except to the extent that the
institution or prosecution of such suit or the entry of judgment therein would,
under applicable law, result in the surrender, impairment or waiver of the Lien
of this Indenture and the Security Documents upon the Collateral.
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SECTION 6.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal and interest remaining unpaid on the Notes, interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel including, but not limited to, all amounts owing to the
Trustee under Section 7.07 herein.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the compensation, expenses, disbursements and advances of the Trustee,
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.
Subject to the provisions of Article 10 hereof, 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, its agents and attorneys for any 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 costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, and interest ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes
for principal, premium and interest, respectively; and
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Third: without duplication, to Holders of Notes for any other
Obligations owing to the Holders of Notes under the Notes or this
Indenture; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 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, the
Trustee shall exercise such of the duties, rights and powers vested in it
by this Indenture and the Security Documents, and use the same degree of
care and skill in its exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties and responsibilities of the Trustee shall be
determined solely by the express provisions of this Indenture and of the
Security Documents and the Trustee need perform only those duties that are
specifically set forth in this Indenture or the Security Documents and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
(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 any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture and the Security Documents. However, the
Trustee shall examine the statements, certificates and opinions to
determine whether or not they conform to the requirements of this Indenture
or the Security Documents.
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(c) The Trustee shall 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
conclusively determined by a court of competent jurisdiction 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 or any other
direction of the Company or Holders permitted under this Indenture.
(d) Whether or not therein expressly so provided, every provision
of this Indenture or the Security Documents that in any way relates to the
Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01 and
Sections 315 and 316 of the TIA.
(e) No provision of this Indenture or the Security Documents
shall require the Trustee to expend or risk its own funds or incur any
liability whatsoever, financial or otherwise, in the performance of any of
its duties hereunder or under the Security Documents or in the exercise of
any of its rights or powers hereunder or under any Security Documents. The
Trustee shall be under no obligation to exercise any of its duties under
this Indenture or under the Security Documents at the request of any
Holders, unless such Holder shall have offered to the Trustee security or
indemnity satisfactory to it against any loss, liability or expense that
might be incurred by it in compliance with such request or direction.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) All indemnifications and releases from liability granted
herein to the Trustee shall extend to the directors, officers, employees
and agents of the Trustee and to the Paying Agent and Registrar.
SECTION 7.02 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval or other paper or 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 any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval or other paper or document, but the Trustee may,
in its discretion, make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent or
attorney.
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(b) Before the Trustee acts or refrains from acting, it shall be
entitled to an Officer's Certificate or an Opinion of Counsel or both. Such
opinion or certificate shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of this Agreement
upon the faith thereof, and 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. The Trustee may consult with counsel 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 agents, attorneys, custodians or
nominees and shall not be responsible for the misconduct or negligence of
any agents, attorneys, custodians or nominees appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers conferred upon it by this Indenture or the Security
Documents; provided, however, that the Trustee's conduct does not
constitute gross negligence or willful misconduct.
(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 or the Security
Documents at the request or discretion of any of the Holders unless such
Holders shall have offered to the Trustee Security or indemnity
satisfactory to it against any loss, liability or expense that might be
incurred by it in compliance with such request or direction.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11. Subject to the provisions of Section 310(b) of the TIA, the
Trustee shall be permitted to engage in transactions with the Company and its
Subsidiaries other than those contemplated by this Indenture.
SECTION 7.04 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Notes or
the Security Documents. It shall not be accountable for the Company's use or
application of the proceeds from the Notes or any money paid to the Company or
upon the Company's direction under any provision of this Indenture or the
Security Documents, it shall not be responsible for the use or application of
any money received by any Paying Agent other than the Trustee, and it shall not
be responsible for any statement or recital herein or any statement in the Notes
or the Security Documents or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its certificate of
authentication.
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SECTION 7.05 NOTICE OF DEFAULTS.
The Trustee shall not be deemed to have notice of a Default or an
Event of Default unless (i) the Trustee has received written notice thereof from
the Company or any Holder or (ii) a Responsible Officer of the Trustee shall
have actual knowledge thereof. Except as otherwise expressly provided herein,
the Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein, or
of any of the documents executed in connection with the Notes, or as to the
existence of a Default or Event of Default hereunder.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it obtains knowledge of the
existence of such Event of Default. Except in the case of a Default or Event of
Default in payment of principal, premium, if any, and interest on any Note, the
Trustee shall be protected in withholding such notice if and so long as the
Trustee in good faith determines that withholding the notice is in the interests
of Holders.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each October 15 beginning with the October 15
following the date of this Indenture, the Trustee shall mail to Holders a brief
report dated as of such reporting date that complies with TIA (S) 313(a) (but
if no event described in TIA (S) 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA (S) 313(b). The Trustee shall also transmit by mail all
reports as required by TIA (S) 313(c).
Commencing at the time this Indenture is qualified under the TIA,
a copy of each report at the time of its mailing to the Holders shall be filed
with the SEC and each stock exchange on which the Notes are listed. The Company
shall promptly notify the Trustee in writing when the Notes are listed on any
stock exchange.
SECTION 7.07 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee, and the Trustee shall be
entitled to, compensation for its acceptance of this Indenture and services
hereunder and under the Security Documents which shall be agreed to by the
Company and the Trustee in a separate fee agreement. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services, except any disbursements,
expenses and advances as may be attributable to the Trustee's negligence or
willful misconduct. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel and other persons
not regularly in its employ.
The Company shall, jointly and severally, indemnify the Trustee
for, and hold the Trustee, its officers, directors, employees and agents
harmless against any and all losses, liabilities, damages, claims or expenses
including taxes (other than taxes based on the income of the Trustee) incurred
by it arising out of or in connection with the acceptance or administration or
performance of its duties under this Indenture, the Notes and the Security
Documents, except as set forth in the next paragraph. The Trustee shall notify
the Company
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promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld or delayed.
The Company need not reimburse any expense or indemnity against
any loss or liability incurred by the Trustee through its own negligence or bad
faith.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture and the resignation or
removal of the Trustee.
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 the Trustee, except that held in trust to pay principal of and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
The obligations of the Company under this Section to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture or the rejection or termination
of this Indenture under any Bankruptcy Law. Such additional indebtedness shall
be a senior claim to that of the Notes upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Notes or coupons, and the Notes are hereby
subordinated to such senior claim. When the Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.01 (vii) or (viii)
hereof occurs, the parties hereto and the Holders by their acceptance of the
Notes hereby agree that such expenses and the compensation for the services
(including the reasonable fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any Bankruptcy Law.
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 Notes
of a majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
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(c) a custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture and the Security Documents. The successor Trustee shall
mail a notice of its succession to Holders of the Notes. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, provided all sums owing to the Trustee hereunder have been paid and
subject to the Lien provided for in Section 7.07 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, if such
resulting surviving or transferee corporation is otherwise eligible hereunder,
be the successor Trustee (and the successor to the Trustee under the Security
Documents).
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificate shall have the full force and
effect that it is anywhere in the Notes or in this Indenture provided that the
certificate of the Trustee shall have.
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SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by Federal or
state authority and shall have (or in the case of a corporation included in a
bank holding company system, the related bank holding company shall have) a
combined capital and surplus of at least $10,000,000 as set forth in its most
recent published annual report of condition.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
SECTION 7.12 MONEY HELD IN TRUST
The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law and except for money held in trust under Article 8 of
this Indenture.
SECTION 7.13 RIGHT OF TRUSTEE IN CAPACITY OF REGISTRAR OR PAYING AGENT
In the Event that the Trustee is also acting in the capacity of
Paying Agent or Registrar hereunder, the rights and protections afforded to the
Trustee pursuant to this Article 7 shall also be afforded to the Trustee in its
capacity as Paying Agent or Registrar.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officer's Certificate, at any time, elect to
have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from their obligations with respect to all outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness represented
by the out-
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standing Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (b) the Company's obligations with respect to such Notes under Sections
2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10 and 2.12 and Section 4.02 hereof, (c)
the rights, powers, trusts, duties and immunities of the Trustee hereunder and
the Company's obligations in connection therewith and (d) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
SECTION 8.03 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their obligations under the covenants contained in Sections 4.03, 4.04,
4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13 and Article 5 hereof and the
Security Documents with respect to the outstanding Notes on and after the date
the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company and its Subsidiaries may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof and subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, Sections 6.01 (iii) through 6.01 (vi) hereof and
Sections 6.01(vii) and (viii) (but, in the case of Sections 6.01(vii) and
(viii), only with respect to a Significant Subsidiary) hereof shall not
constitute Events of Default.
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
(a) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 who shall agree to comply with the provisions of this
Article Eight applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the
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Holders of such Notes, (i) cash in U.S. Dollars in an amount, or (ii) non-
callable Government Securities which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
cash in U.S. Dollars in an amount, or (iii) a combination thereof, in such
amounts, as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge
the principal of, premium, if any, and interest on the outstanding Notes on
the stated maturity or on the applicable redemption date, as the case may
be, and the Company must specify whether the Notes are being defeased to
maturity or to a particular redemption date of such principal or
installment of principal, premium, if any, or interest; provided that the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such non-callable Government Securities to said payments with
respect to the Notes;
(b) In the case of an election under Section 8.02, either (i) (A)
the Notes will become due and payable at their stated maturity within one
year after the date of such election pursuant to Section 8.02 or, within
one year after the date of such election, the Notes will be redeemable at
the option of the Company and will be redeemed by the Company pursuant to
irrevocable instructions issued to the Trustee at the time of such election
for the giving of a notice of redemption by the Trustee for such redemption
and (B) the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably satisfactory to the Trustee to the
effect that the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to Federal income tax in the same amount, in
the same manner and at the same times as would have been the case if such
Legal Defeasance had not occurred or (ii) the Company shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably
satisfactory to the Trustee confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
or (B) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(c) In the case of an election under Section 8.03, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably satisfactory to the Trustee to the effect that the
Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to Federal income tax in the same amount, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) No Default or Event of Default with respect to the Notes
shall have occurred and be continuing on the date of such deposit or, in so
far as Section 6.01(vii) or (viii) is concerned, at any time in the period
ending on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of
such period);
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(e) Such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, this Indenture
or any other material agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) In the case of an election under either Section 8.02 or 8.03,
the Company shall have delivered to the Trustee an Officer's Certificate
stating that the deposit made by the Company pursuant to its election under
Section 8.02 or 8.03 was not made by the Company with the intent of
preferring the Holders over other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and
(g) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel in the United States, each stating
that all conditions precedent provided for relating to either the Legal
Defeasance under Section 8.02 or the Covenant Defeasance under Section 8.03
(as the case may be) have been complied with as contemplated by this
Section 8.04.
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06 REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of and premium or
interest on any Note and remaining unclaimed for one year after such principal
and premium or interest has become due and payable shall be paid to the Company
on its
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request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as a creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
written request and expense of the Company cause to be published once, in The
New York Times or The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 8.07 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if either the Company makes
any payment of principal of and premium or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent and provided further that if such order or judgment is
issued in connection with the insolvency, receivership or other similar
occurrence with respect to the Trustee, upon the reinstatement of such
obligations the Company shall be released from its obligations under Sections
4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13 and Article 5.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture and subject to the
next succeeding paragraph, the Company and the Trustee may amend or supplement
this Indenture, the Notes or the Security Documents without the consent of any
Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's obligations to
Holders of Notes in the case of a merger or consolidation pursuant to
Article 5 hereof, as applicable;
(d) to make any change that would provide any additional rights
or benefits to the Holders of Notes or that does not adversely affect the
legal rights hereunder and under the Security Documents of any Holder of
the Notes;
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(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(f) to mortgage, pledge or grant a Security Interest in favor of
the Trustee as additional security for the payment and performance of
obligations under this Indenture and the Notes, in any property or assets,
including any which are required to be mortgaged, pledged or hypothecated,
or in which a Security Interest is required to be granted pursuant to the
provisions of the Security Documents or otherwise.
Upon the written request of the Company accompanied by a
resolution of its Board of Directors 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.
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES.
The Company and the Trustee may amend or supplement this Indenture
or the Notes with the written consent of the Holders of at least a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for the Notes) and any existing
Default (including, without limitation, an acceleration of the Notes) or
compliance with any provision of this Indenture or the Notes may be waived with
the written consent of the Holders of at least a majority in principal amount of
the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for the Notes).
Upon the written request of the Company, accompanied by a
resolution of its Board of Directors authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders 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 supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After a supplement, amendment or waiver under this Section becomes
effective, the Company shall mail to the Holders of each Note affected thereby a
notice briefly describing the supplement, amendment or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture,
amendment or waiver. Subject to Sections 6.04(a) and 6.07 hereof, the Holders of
a majority in principal amount of the Notes then outstanding may waive
compli-
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ance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, a
supplement, amendment or waiver under this Section may not (with respect to any
Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver of this
Indenture, the Notes or the Security Documents;
(2) reduce the principal of or change the fixed maturity of any
Note or alter the provisions with respect to redemption of
the Notes other than pursuant to Sections 4.07 and 4.08
hereof;
(3) reduce the rate of or change the time for payment of
interest, including default interest on any Note;
(4) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on any Note
(except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount
of the Notes and a waiver of the payment default that
resulted from such acceleration);
(5) make any Note payable in money other than that stated in the
Note;
(6) make any change in Section 6.04(a) or 6.07 hereof or in this
sentence of this Section 9.02 or the rights of Holders of
Notes to receive payments of principal of or premium, if any,
or interest on any Notes;
(7) waive a redemption payment with respect to any Note (other
than a payment required by the provisions of Sections 4.07 or
4.08 hereof); or
(8) 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, the Notes or the
Security Documents shall be set forth in a amended or supplemental Indenture
that complies with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.
Until a supplement, amendment or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder 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 may revoke the consent as to
its Note if the Trustee receives written notice of revocation before the date
the waiver or amendment becomes effective. An amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
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The Company may fix a record date for determining which Holders must
consent to such amendment or waiver. If the Company fixes a record date, the
record date shall be fixed at (i) the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee prior to such solicitation pursuant to Section 2.05, or
(ii) such other date as the Company shall designate. No such consent shall be
effective for more than 120 days after such record date.
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about a supplement,
amendment 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 supplement, amendment 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 amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive,
if requested, an indemnity satisfactory to it and to receive and, subject to
Section 7.01, shall be fully protected in relying upon, an Officer's Certificate
and an Opinion of Counsel as conclusive evidence that such amendment or
supplemental indenture is authorized or permitted by this Indenture, that it is
not inconsistent herewith, and that it constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms. The Company may not sign an amendment or supplemental indenture
until the irrespective Board of Directors approves it.
ARTICLE 10
SUBORDINATION
SECTION 10.01 NOTES SUBORDINATED TO SENIOR SECURED DEBT.
The Company covenants and agrees, and each Holder of the Notes, by its
acceptance thereof, likewise covenants and agrees, that all Notes shall be
issued subject to the provisions of this Article Ten; and each Person holding
any Note, whether upon original issue or upon registration of transfer,
assignment or exchange thereof, accepts and agrees that the payment of all
Obligations on the Notes by the Company shall, to the extent and in the manner
herein set forth, be subordinated and junior in right of payment to the prior
payment in full in cash or Cash Equivalents of all Obligations on or in respect
of Senior Secured Debt to the extent set forth herein; that the subordination is
for the benefit of, and shall be enforceable directly by, the holders of Senior
Secured Debt, and that each holder of Senior Secured Debt whether now
outstanding or hereafter created, incurred, assumed or guaranteed shall be
deemed to have acquired Senior Secured Debt in reliance upon the covenants and
provisions contained in this Indenture and the Notes.
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SECTION 10.02 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
Until all Senior Secured Debt shall have been paid in full, exchanged
for Notes or otherwise retired, in the event of:
(a) the occurrence of an Event of Default (as such term is defined in
the Senior Secured Debt) and continuance thereof beyond any grace period
provided in the Senior Secured Debt;
(b) any acceleration of the maturity of any other Indebtedness of the
Company, or
(c) the institution of any liquidation, dissolution, bankruptcy,
insolvency or similar proceeding relating to the Company, its property, or
its creditors as such,
the Holders of the Notes shall not be entitled to receive and, by
execution and delivery of this Indenture the Holders of the Notes agree not to
accept, any payment of principal or interest until all amounts owing in respect
of the Senior Secured Debt shall have been paid in full; and from and after the
happening of any event described in clause (c) of this Section 10.02, all
payments and distributions of any kind or character (whether in cash, securities
or property) which, except for the provisions hereof, would have been payable or
distributable to or for the benefit of the holders of the Notes, shall be made
to and for the benefit of the Holders of the Senior Secured Debt (who shall be
entitled to make all necessary claims therefore) in accordance with the
priorities of payment set forth herein until all Senior Secured Debt shall have
been paid in full. In the event that any payment or distribution is made with
respect to the Notes in violation of the terms hereof, any Holder receiving such
payment or distribution shall (and, by acceptance of the Exchange Notes, agrees
to) hold it in trust for the benefit of, and shall remit it to, the holders of
the Senior Secured Debt in accordance with the priorities of payment set forth
herein and in the Security Agreement.
SECTION 10.03 PAYMENTS MAY BE PAID PRIOR TO CERTAIN EVENTS.
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Company from making payments at any time in respect of
principal of and interest on the Notes, or from depositing with the Trustee any
moneys for such payments, or (ii) the application by the Trustee or such Paying
Agent, as the case may be, of any moneys deposited with it for the purpose of
making such payments of principal of, and interest on, the Notes to the Holders
entitled thereto (provided that, notwithstanding the foregoing, such application
--------
shall be subject to the provisions of Section 10.02). The Company shall give
prompt written notice to the Trustee and each Paying Agent of any event
described in Section 10.02.
SECTION 10.04 SUBROGATION
Subject to the payment in full in cash or Cash Equivalents of all
Senior Secured Debt, the Holders of the Notes shall be subrogated to the rights
of the holders of Senior Secured Debt to receive payments or distributions of
cash, property or securities of the Company applicable to the Senior Secured
Debt until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Senior
Secured Debt by or on behalf of the Company or by or on behalf of the Holders by
virtue of this Article Ten which otherwise would have been made to the Holders
shall, as between the Company and the Hold-
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ers of the Notes, be deemed to be a payment by the Company to or on account of
the Senior Secured Debt, it being understood that the provisions of this Article
Ten are and are intended solely for the purpose of defining the relative rights
of the Holders of the Notes, on the one hand, and the holders of the Senior
Secured Debt, on the other hand.
SECTION 10.05 OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Secured Debt, and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and any interest on the Notes as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of the Senior Secured Debt, nor shall anything herein or
therein prevent the Holder of any Note or the Trustee on its behalf from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
SECTION 10.06 NOTICE TO TRUSTEE AND PAYING AGENTS.
The Company shall give prompt written notice to the Trustee and each
Paying Agent of any fact known to the Company which would prohibit the making of
any payment to or by the Trustee or any Paying Agent in respect of the Notes
pursuant to the provisions of this Article Ten. Regardless of anything to the
contrary contained in this Article Ten or elsewhere in this Indenture, neither
the Trustee nor any Paying Agent shall be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee or any Paying Agent unless and until the Trustee or such Paying
Agent, as the case may be, shall have received notice in writing from the
Company, or from a holder of Senior Secured Debt or a representative therefor,
together with proof satisfactory to the Trustee or such Paying Agent, as the
case may be, of such holding of Senior Secured Debt or of the authority of such
representative, and, prior to the receipt of any such written notice, the
Trustee shall be entitled to assume (in the absence of actual knowledge to the
contrary) that no such facts exist.
In the event that the Trustee or any Paying Agent determines in good
faith that any evidence is required with respect to the right of any Person as a
holder of Senior Secured Debt to participate in any payment or distribution
pursuant to this Article Ten, the Trustee or such Paying Agent, as the case may
be, may request such Person to furnish evidence to the reasonable satisfaction
of the Trustee or such Paying Agent, as the case may be, as to the amounts of
Senior Secured Debt held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article Ten. If such evidence
is not furnished to the Trustee or such Paying Agent, as the case may be, the
Trustee or such Paying Agent shall incur no liability and shall be fully
protected in deferring any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 10.07 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
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Upon any payment or distribution of assets of the Company referred to
in this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, each Paying Agent and the Holders of the Notes shall be entitled to
conclusively rely and shall be fully protected in acting or refraining from
acting upon any order or decree made by any court of competent jurisdiction in
which any insolvency, bankruptcy, receivership, dissolution, winding-up,
liquidation, reorganization or similar case or proceeding is pending, or upon a
certificate of the receiver, trustee in bankruptcy, liquidating trustee,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or the Holders of the
Notes, for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of the Senior Secured Debt and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Ten.
SECTION 10.08 TRUSTEE'S RELATION TO SENIOR SECURED DEBT.
The Trustee, each Agent and any agent of the Company, of the Trustee
or any Agent shall be entitled to all the rights set forth in this Article Ten
with respect to any Senior Secured Debt which may at any time be held by it in
its individual or any other capacity to the same extent as any other holder of
Senior Secured Debt and nothing in this Indenture shall deprive the Trustee, any
Agent or any such agent of any of its rights as such a holder.
With respect to the holders of Senior Secured Debt, the Trustee and
each Agent undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Ten, and no implied
covenants or obligations with respect to the holders of Senior Secured Debt
shall be read into this Indenture against the Trustee or any Agent. Neither the
Trustee nor any Agent shall be deemed to owe any fiduciary duty to the holders
of Senior Secured Debt.
Whenever a distribution is to be made or a notice is to be given to
holders or owners of Senior Secured Debt, the distribution may be made and the
notice may be given to their representatives, if any.
SECTION 10.09 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE
COMPANY.
No right of any present or future holders of any Senior Secured Debt
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Secured Debt may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article Ten or the obligations
hereunder of the Holders of the Notes to the holders of the Senior Secured Debt,
do any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior Secured
Debt, or otherwise amend or supplement in any manner Senior Secured Debt, or any
instrument evidencing the same or any agreement under which Senior Secured Debt
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is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Secured Debt; (iii) release any
Person liable in any manner for the payment or collection of Senior Secured
Debt; and (iv) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 10.10 NOTEHOLDERS AUTHORIZE TRUSTEE AND PAYING AGENT TO EFFECTUATE
SUBORDINATION OF NOTES.
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee and each Paying Agent on its behalf to take such
action as may be necessary or appropriate to effectuate, as between the holders
of Senior Secured Debt and the Holders of Notes, the subordination provided in
this Article Ten, and appoints the Trustee and each Paying Agent its attorney-
in-fact for such purposes, including, in the event of any dissolution, winding-
up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company, the filing of a claim for
the unpaid balance of its Notes and accrued interest in the form required in
those proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Secured Debt
or their representatives are hereby authorized to have the right to file and are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of said Notes. Nothing herein contained shall be deemed to authorize the
Trustee or the holders of Senior Secured Debt or their representatives 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 thereof, or to authorize the Trustee or the holders of
Senior Secured Debt or their representatives to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 10.11 TRUSTEE'S COMPENSATION NOT PREJUDICED.
Nothing in this Article Ten will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
ARTICLE 11
SECURITY DOCUMENTS
SECTION 11.01 COLLATERAL AND SECURITY DOCUMENTS.
In order to secure the due and punctual payment of the Notes, the
Company has entered into the Security Agreement to create the Security Interests
and for related matters. Subject to the provisions in the Security Agreement
and this Indenture, the Notes shall be secured by the Collateral securing the
Senior Secured Debt and the Convertible Subordinated Debt in accordance with the
terms of the Security Agreement.
Each holder of a Note, by accepting such Note, agrees to all of the
terms and provisions of the Security Agreement, as the same may be amended from
time to time pursuant to the provisions of the Security Agreement and this
Indenture. Additionally, each holder of a Note, by accepting such Note, directs
the Trustee to authorize the release, from time to time, from the security
interest any Pledged Debt or Pledged Securities (as such terms are defined in
the Security Agreement) as contemplated by and pursuant to Section 1 of the
Security Agreement, and each such Holder (for itself and any person or
entity claiming through it) hereby releases, waives, discharges, exculpates and
covenants not to ▇▇▇ the Trustee for authorizing any such release.
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SECTION 11.02 APPLICATION OF PROCEEDS OF COLLATERAL
Upon any realization upon the Collateral, the proceeds thereof
shall be applied in accordance with the terms of the Security Agreement.
SECTION 11.03 RELEASE OF COLLATERAL
The Company shall have the right, at any time and from time to
time, to obtain a release of Collateral upon the exchange of other Collateral
for such Collateral in accordance with the terms of the Security Agreement.
SECTION 11.04 CERTIFICATES OF THE COMPANY
The Company will furnish to the Trustee and the Collateral Agent
prior to any proposed release of any portion or all of the Collateral (a)
all documents required by the TIA, (b) an Officer's Certificate requesting
a release of collateral and describing the property to be so released and
(c) an Opinion of Counsel to the effect that such accompanying documents
constitute all documents required by the TIA. The Trustee and the
Collateral Agent may, to the extent permitted by Sections 7.01 and 7.02
hereof, accept as conclusive evidence of compliance with the foregoing
provisions the statements contained in such instruments.
SECTION 11.05 OPINION OF COUNSEL
The Company shall deliver to the Trustee and the Collateral Agent:
(a) Promptly after the execution and delivery of the Indenture, an
Opinion of Counsel either stating that in the opinion of such counsel the
Indenture has been properly recorded and filed so as to make effective the
lien intended to be created thereby, and reciting the details of such
action, or stating that in the opinion of such counsel no such action is
necessary to make such lien effective; and
(b) on _______ of each year, an Opinion of Counsel either stating
that in the opinion of such counsel such action has been taken with respect
to the recording, filing, recording and refiling of the Indenture as is
necessary to maintain the lien of the Indenture, and reciting the details
of such action, or stating that in the opinion of such counsel no such
action is necessary to maintain such lien.
SECTION 11.06 RIGHTS OF TRUSTEE UNDER SECURITY AGREEMENT
The rights, protections, immunities and indemnities of the
Trustee set forth herein shall apply, mutatis mutandis, to the Trustee under the
Security Agreement.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 TRUST INDENTURE ACT CONTROLS.
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If any provision of this Indenture or the Security Agreement limits,
qualifies or conflicts with the duties imposed by TIA (S) 318(c), the imposed
duties shall control to the extent they cannot be disregarded, pursuant to TIA
(S) 314(d).
SECTION 12.02 NOTICES.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company:
Imperial Credit Industries, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
If to the Trustee:
The Chase Manhattan Bank and Trust Company, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
The Company or the Trustee by written notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if sent by registered or certified mail; when answered back, if
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
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If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
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 or the Notes. The
Company, the Trustee, the Registrar and any other Person 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,
at the request of the Trustee:
(a) an Officer's Certificate 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 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 and the Security Agreement
(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.
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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 GOVERNING LAW.
The internal law of the State of New York shall govern and be
used to construe this Indenture and the Notes (without regard to conflicts of
law provisions). Each party hereto irrevocably submits itself to the non-
exclusive jurisdiction of the state and federal courts of New York for purposes
of this Indenture and agrees and consents that service of process may be made
upon it in any legal proceeding relating to this Indenture by any means allowed
under federal or New York law. The parties hereto hereby waive and agree not to
assert, by way of motion, as a defense or otherwise, that any such proceeding is
brought in an inconvenient forum or that the venue thereof is improper.
SECTION 12.08 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 12.09 SUCCESSORS.
All agreements of the Company in this Indenture and the Notes
shall bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 12.10 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 12.11 COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.12 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.
SECTION 12.13 LEGAL HOLIDAYS.
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A "Legal Holiday" is a Saturday, a Sunday or a day on which
banking institutions in The City of New York or at a place of payment are
authorized or obligated by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 12.14 NO RECOURSE AGAINST OTHERS.
No director, officer, manager, member, organizer, employee,
incorporator or shareholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. This waiver and release are part of the consideration for issuance of
the Notes.
SECTION 12.15 DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
[Signatures on following page.]
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SIGNATURES
----------
Dated as of __________, 2001 IMPERIAL CREDIT INDUSTRIES, INC.
By: ______________________________
Name:
Title:
THE CHASE MANHATTAN BANK AND
TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
By: ____________________________
Name:
Title:
EXHIBIT A
(Face of Note)
12% Senior Secured Notes due 2005
No. $___________
IMPERIAL CREDIT INDUSTRIES, INC.
promises to pay to _________________________________________________________ or
registered assigns, the principal sum of _______________ Dollars on [ ],2005.
------
Interest Payment Dates: [________] and [_________]
Record Dates: [________] and [__________]
CUSIP Number:
Dated: _______________, 2001
IMPERIAL CREDIT INDUSTRIES, INC.
By: _______________________________
Name:
Title:
This is one of the
Notes referred to in the
within-mentioned indenture:
Dated: _____________, 2001
The Chase Manhattan Bank and Trust
Company, National Association,
as Trustee
By:______________________________________
A-1
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) ("DTC") to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]/1/
[Insert legend in Section 2.06(f), if applicable]
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
____________________________
1. This paragraph should be included only if the Note is issued in global form.
A-2
(Back of Note)
IMPERIAL CREDIT INDUSTRIES, INC.
12% Senior Secured Notes due 2005
1. INTEREST. Imperial Credit Industries, Inc., a California corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at 12% per annum from __________, 2001 until [________], 2005. The Company shall
pay interest in cash semi-annually in arrears on [______] and [______] of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be ________ [__],
2001. The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate equal to the per annum rate on the Notes
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall make payments in respect of
the Notes represented by the Global Note (including principal, premium and
interest) by wire transfer of immediately available funds to the accounts
specified by the Global Note custodian. With respect to Notes issued in
definitive form, the Company shall make all payments of principal, premium and
interest by mailing a check to each such Holder's registered address, provided
that all payments with respect to Notes having an aggregate principal amount of
$100,000 or more, the Holders of which have given written wire transfer
instructions to the Company at least ten business days prior to the applicable
payment date, will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof. Except for
trades involving only Euroclear or CEDEL participants, the Notes represented by
the Global Note are expected to be eligible to trade in DTC's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in such
Notes will, therefore, be required by DTC to be settled in immediately available
funds. The Company expects that secondary trading in the Definitive Notes also
will be settled in immediately available funds.
3. PAYING AGENT AND REGISTRAR. Initially, The Chase Manhattan Bank and
Trust Company, National Association, the Trustee under the Indenture, will act
as Paying Agent and Registrar. The Notes may be presented for registration of
transfer and exchange at the offices (or an affiliate's office) of the
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture, dated
as of [__________], 2001 (the "Indenture"), among the Company and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code (S)(S) 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are obligations of the Company limited to $__________ in
aggregate principal amount.
A-3
5. OPTIONAL REDEMPTION.
The Company may redeem the Notes in whole or in part, in integral
multiples of $1,000 only, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest thereon to
the applicable redemption date if redeemed during the twelve-month period
beginning on __________ of the years indicated below:
Year Percentage
---- ----------
2001............................................................ 106
2002............................................................ 103
2003 and thereafter............................................. 100
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER
(a) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 10l% of the aggregate principal amount thereof plus accrued and
unpaid interest thereon to the date of purchase (the "Change of Control
Payment").
Within 10 days following any Change of Control, the Company shall mail a
notice to each Holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase Notes pursuant to the
procedures required by the Indenture and described in such notice. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control.
The Change of Control Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Change of Control Offer
Period"). No later than five Business Days after the termination of the Change
of Control Offer Period (the "Change of Control Purchase Date"), the Company
shall purchase all Notes tendered in response to the Change of Control Offer.
Payment for any Notes so purchased shall be made in the same manner as interest
payments are made.
(b) Unless the Company otherwise complies with the provisions of Section
4.08 of the Indenture and, subject to the provisions of Section 4.08 of the
Indenture, when the aggregate amount of Excess Proceeds exceeds $5,000,000, the
Company shall be required to make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes that may be
purchased out of one-half of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon to the date of purchase, in accordance with the procedures set
forth in the Indenture. To the extent that the aggregate amount of Notes
tendered pursuant to an Asset Sale Offer is less than one-half of the Excess
Proceeds, the Company may use any remaining Excess Proceeds (together with one-
half of the Excess Proceeds) for general corporate purposes. Upon completion of
such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
A-4
An Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Asset Sale Offer Period"). No later
than five Business Days after the termination of the Asset Sale Offer Period
(the "Asset Sale Purchase Date"), the Company shall purchase the principal
amount of Notes required to be purchased pursuant to this covenant (the "Asset
Sale Offer Amount") or, if less than the Asset Sale Offer Amount has been
tendered, all Notes tendered in response to the Asset Sale Offer. Payment for
any Notes so purchased shall be made in the same manner as interest payments are
made.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes may be redeemed
in part but only in whole multiples of $1,000. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in minimum denominations of $1,000 and integral multiples
of $1,000 in excess thereof. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture, the Notes or the Security Documents may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes. Without the consent of any Holder of a Note, the Indenture or the Notes
may be amended or supplemented to cure any ambiguity, defect or inconsistency,
to provide for uncertificated Notes in addition to or in place of Definitive
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture or the Security
Documents of any such Holder, to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act, to mortgage, pledge or grant a Security Interest in favor of the
Trustee as additional security for the payment and performance of obligations
under this Indenture or the Notes, in any property or assets, including any
which are required to be mortgaged, pledged or hypothecated, or in which a
Security Interest is required to be granted pursuant to the provisions of the
Security Documents or otherwise, or to add or release any Pledgor strictly in
accordance with another provision of this Indenture or a provision of the
Security Documents expressly providing for such addition or release.
12. DEFAULTS AND REMEDIES. Each of the following constitutes an
Event of Default: (i) default for 30 days in the payment when due of interest on
the Notes; (ii) default in payment when due of the principal of or premium, if
any, on the Notes; (iii) failure by the Company for 60 days after notice from
the Trustee or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes to comply with any of its other covenants, agreements or
warranties in the Indenture, the Notes or the Security Documents; (iv) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured
A-5
or evidenced any Indebtedness for money borrowed by the Company (or the payment
of which is guaranteed by the Company) whether such Indebtedness or guarantee
now exists, or is created after the date hereof, which default results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $5.0
million or more (v) failure by the Company or any of its Significant
Subsidiaries to pay final judgments aggregating in excess of $5.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days; (vi) other
than as permitted under the Security Documents or the terms of the Indenture,
any of the Security Documents ceases to be in full force and effect, or any of
the other Security Documents cease to give the Trustee the Security Interests,
rights, powers and privileges purported to be created thereby, or any Security
Document is declared null and void, or the Company shall deny or disaffirm any
of its obligations under any Security Document or any Collateral becomes subject
to any Lien other than Permitted Liens; and (vii) certain events of bankruptcy
or insolvency with respect to the Company or any of its Significant
Subsidiaries.
If any Event of Default (other than an Event of Default under clause
(vii) of the preceding paragraph with respect to the Company or any Significant
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Notes may declare all the Notes to
be due and payable immediately. Notwithstanding the foregoing, in the case of
an Event of Default arising from certain events of bankruptcy or insolvency
described in clause (vii) of the preceding paragraph, with respect to the
Company or any Significant Subsidiary, all outstanding Notes shall ipso facto
become due and payable without further action or notice on the part of the
Trustee or any Holder. 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. 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.
13. SECURITY DOCUMENTS. In order to secure the due and punctual
payment of the principal of and interest on the Notes and all other amounts
payable by the Company under the Indenture and the Notes when and as the same
shall be due and payable, whether at maturity, by acceleration or otherwise,
according to the terms of the Notes and the Indenture, the Company has granted
Liens on the Collateral to the Trustee for the benefit of the Holders of the
Notes pursuant to the Indenture and the Security Documents. The Notes will be
secured by Liens on the Collateral that are subject only to certain permitted
encumbrances.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes, the Indenture or
the Security Documents or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TENENT (=
tenants by the entireties), JT TEN (= joint
A-6
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Imperial Credit Industries, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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 Company.
The agent may substitute another to act for him.
Date:____________ Your Signature: ____________________________________
(Sign exactly as your name appears on the face
of this Note)
Signature Guarantee:________________________________
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.07 or 4.08 of the Indenture, check the box below:
[ ] Section 4.07 [ ] Section 4.08
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$________________
Date:_________________ Your Signature:______________________________________
(Sign exactly as your name appears on the face
of this Note)
Tax Identification No.:________________________________
Signature Guarantee:___________________________________
A-9
SCHEDULE OF EXCHANGES OF NOTES/2/
The following exchanges of a part of this Global Note for other Notes have been
made:
Principal Amount of
Amount of this Global Note
Amount of decrease increase in following such Signature of
in Principal Principal Amount ---- authorized officer
Date of Amount of this of this Global decrease (or of Trustee or Note
Exchange Global Note Note increase) Custodian
--------------------------------------------------------------------------------------------------
_______________________
2. This should be included only if the Note is issued in global form.
A-10
EXHIBIT B
FORM OF COLLATERAL AGENCY AND SECURITY AGREEMENT
B-1
AMENDED AND RESTATED
COLLATERAL AGENCY AND SECURITY AGREEMENT
This AMENDED AND RESTATED COLLATERAL AGENCY AND SECURITY AGREEMENT (as it
may be amended, supplemented or otherwise modified from time to time, this
"Agreement") is dated as of May __, 2001 and is made by and between Imperial
----------
Credit Industries, Inc. (the "Grantor") in favor of and for the benefit of
-------
Wilmington Trust Company ("WTC"), acting hereunder not individually but solely
---
as collateral agent (in such capacity, the "Collateral Agent") for the benefit
----------------
of (i) the Senior Secured Debt Purchasers, (ii) from and after the Debt Exchange
Closing Date, Chase Manhattan Bank and Trust Company, N.A. ("Senior Debt
-----------
Trustee"), not individually but solely as trustee for the holders of the
Exchange Notes and (iii) from and after the Convertible Subordinated Debt
Placement Closing Date, Chase Manhattan Bank and Trust Company, N.A.
("Subordinated Debt Trustee"), not individually but solely as trustee for the
---------------------------
Convertible Subordinated Debt Purchasers (the Senior Secured Debt Purchasers,
the Senior Debt Trustee and the Subordinated Debt Trustee, together with any
successors and assigns, are individually referred to herein as a "Secured Party"
-------------
and collectively referred to herein as the "Secured Parties").
---------------
PRELIMINARY STATEMENTS
Pursuant to that certain Master Recapitalization Agreement dated as of
March 29, 2001 (said agreement, as it may hereafter be amended or otherwise
modified from time to time, being the "Recapitalization Agreement"), the Senior
--------------------------
Secured Debt Purchasers agreed to loan $16,200,000 to the Grantor and the
Signatory Debtholders agreed to tender their Old Notes to the Grantor in
exchange for Exchange Notes and certain other consideration pursuant to the Debt
Exchange. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Recapitalization Agreement.
It was a condition precedent to the closing of the transactions
contemplated by the Recapitalization Agreement that the Grantor and WTC in its
capacity as Collateral Agent shall have entered into that certain Collateral
Agency and Security Agreement dated as of March 29, 2001 (the "Original Security
-----------------
Agreement") and that the Grantor shall have granted the assignments and security
---------
interests and made the pledges and assignments contemplated thereunder.
The obligations of the Grantor under the Senior Secured Debt and, from and
after the Debt Exchange Closing Date, the Exchange Notes were to be secured
pursuant to the Original Security Agreement.
The parties to the Recapitalization Agreement have agreed that from and
after the Convertible Subordinated Debt Placement Closing Date the Convertible
Subordinated Debt should be secured by the collateral described in the Original
Security Agreement and that the Original Security Agreement should be amended
and restated to so provide.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Convertible Subordinated Debt Purchasers to purchase the Convertible
Subordinated Debt, the
B-2
parties hereto hereby agree that the Original Security Agreement shall be
amended and restated in its entirety as follows:
SECTION 1. Grant of Security. The Grantor hereby assigns and pledges to
-----------------
the Collateral Agent (i) for the benefit of the Senior Secured Debt Purchasers
and (ii) from and after the Debt Exchange Closing Date, for the benefit of (x)
the Senior Secured Debt Purchasers, the Subordinated Debt Trustee as trustee for
the Convertible Subordinated Debt Purchasers (to the extent the Convertible
Subordinated Debt is then outstanding) and the Senior Debt Trustee as trustee
for the holders of the Exchange Notes for so long as the Senior Secured Debt is
issued and outstanding and (y) from and after the payment in full or exchange of
the Senior Secured Debt, the Subordinated Debt Trustee as trustee for the
Convertible Subordinated Debt Purchasers (to the extent the Convertible
Subordinated Debt is then outstanding) and the Senior Debt Trustee as trustee
for the holders of the Exchange Notes, and hereby grants to the Collateral Agent
for the benefit of such Secured Parties a security interest in, all of the
Grantor's right, title and interest, whether now owned or hereafter acquired, in
and to the following (collectively, the "Collateral"):
----------
(a) all of the following:
(i) the indebtedness (the "Pledged Debt") described on Schedule I
------------ ----------
and owing to the Grantor by the issuers named therein and the
instruments evidencing the Pledged Debt, and all interest, 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 Pledged Debt;
(ii) all additional indebtedness from time to time owed to the
Grantor by any obligor of the Pledged Debt or any other Person and the
instruments evidencing such indebtedness, and all interest, 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
such indebtedness; and
(iii) the shares of capital stock described on Schedule II (the
-----------
"Pledged Securities"), together with any other shares, stock
------------------
certificates, options or warrants of any issuer listed in Schedule II
-----------
that may be issued or granted to, or held by, the Grantor while this
Agreement is in effect; and
(b) all proceeds of any and all of the foregoing Collateral.
The parties hereto have agreed, and by their execution hereof acknowledge, that
the Grantor may request that any or all of the instruments evidencing any
Pledged Debt be released from the lien of this Agreement upon the exchange
thereof for (i) another instrument evidencing indebtedness from Southern Pacific
Bank (which instrument shall, without any further action by any party hereto,
become Pledged Debt for all purposes hereof) or (ii) any shares of capital stock
of Southern Pacific Bank (which instrument shall, without any further action by
any party hereto, become Pledged Securities for all purposes hereof).
Similarly, the Grantor may request that any or all of the stock certificates
evidencing the Pledged Securities be released from the lien of this
B-3
Agreement upon the exchange thereof for (i) any shares of another class of
capital stock of Southern Pacific Bank (which shares shall, without further
action by any party hereto, become Pledged Securities for all purposes hereof)
or (ii) any instrument evidencing indebtedness of Southern Pacific Bank (which
shall, without any further action by any party hereto, become Pledged Debt for
all purposes hereof). By their acceptance hereof, the Senior Secured Debt
Purchasers, the Senior Debt Trustee (acting solely pursuant to the authority
granted in Section 11.01 of the Exchange Notes Indenture), and the Subordinated
Debt Trustee (acting solely pursuant to the authority granted in Section 11.01
of the Subordinated Debt Indenture) authorize the Collateral Agent to release
from the security interest hereof any Pledged Debt or Pledged Securities held by
it hereunder upon the exchange of such Pledged Debt or Pledged Securities for
other indebtedness or capital stock of Southern Pacific Bank so long as such
indebtedness or stock is pledged to the Collateral Agent and is subject to the
security interests granted hereby for all purposes.
SECTION 2. Security for Obligations. This Agreement secures, and the
------------------------
Collateral is collateral security for, the prompt payment and performance in
full when due, whether on a specified payment date, at stated maturity, by
acceleration or otherwise (including, without limitation, the payment of amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code or any similar law) of all obligations of the
Grantor under (i) the Senior Secured Debt, and (ii) from and after the
Subordinated Debt Exchange Closing Date, (x) the Senior Secured Debt, the
Convertible Subordinated Debt (to the extent outstanding) and the Exchange Notes
for so long as the Senior Secured Debt is issued and outstanding and (y) from
and after the payment in full or exchange of the Senior Secured Debt, the
Exchange Notes and the Convertible Subordinated Debt (to the extent
outstanding), including interest (including, without limitation, interest that,
but for the filing of a petition in bankruptcy would accrue on such obligations)
or any fees or other expenses related thereto (any and all such obligations
being the "Secured Obligations").
--------------------
SECTION 3. Delivery of Collateral. All certificates or instruments
----------------------
representing or evidencing Collateral shall be delivered to and held by or on
behalf of the Collateral Agent on behalf of the Secured Parties entitled to the
benefit thereof pursuant to the terms hereof and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Secured Parties entitled to the benefit thereof pursuant to the terms hereof.
The Collateral Agent shall have the right after the occurrence and during the
continuance of an Event of Default (as defined in Section 6(a)(v)) beyond any
---------------
grace period applicable thereto to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Collateral. In
addition, the Collateral Agent shall have the right after the occurrence and
during the continuance of an Event of Default beyond any grace period applicable
thereto to exchange instruments representing or evidencing the Collateral, for
instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties. The Grantor hereby represents
------------------------------
and warrants as follows:
(a) The chief place of business and chief executive office of the
Grantor is located at the address specified for the Grantor on Schedule
-------
III. The Grantor's federal tax identification number is as set forth on
---
Schedule III.
------------
B-4
(b) The Grantor is the legal and beneficial owner of the Collateral
free and clear of any lien. No effective financing statement or other
instrument similar in effect covering all or any part the Collateral is on
file in any recording office, except such as may have been filed relating
to this Agreement.
(c) Assuming continuous possession by the Collateral Agent on
behalf of the Secured Parties entitled to the benefit thereof pursuant to
the terms hereof, the pledge of each of the Pledged Debt and Pledged
Securities pursuant to this Agreement creates a valid and first priority
perfected security interest in the Pledged Debt and Pledged Securities,
respectively.
(d) All shares of capital stock described on Schedule II are duly
authorized, validly issued, fully paid and non-assessable.
(e) The Pledged Debt described on Schedule I constitutes 100% of
----------
the outstanding indebtedness of the Bank to the Grantor and its Affiliates
(excluding any indebtedness arising from deposit accounts or bank accounts
maintained by the Grantor and its Affiliates with the Bank) and the Pledged
Securities described on Schedule II represent 100% of the total issued and
-----------
outstanding shares of capital stock of the Bank.
(f) The execution and delivery of this Agreement and the
performance by the Grantor of its obligations hereunder are within the
Grantor's corporate power, have been duly authorized by all necessary
corporate action and do not and will not contravene or conflict with any
provision of law or of the organizational documents of the Grantor or of
any agreement, indenture, instrument or other document, or any judgment,
order or decree, which is binding upon the Grantor.
(g) This Agreement is a legal, valid and binding obligation of the
Grantor, enforceable in accordance with its terms, except that the
enforceability of this Agreement may be limited by bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and creates a
valid and, after all appropriate financing statements are filed, first
priority security interest in the Collateral and such security interest is
entitled to all rights, priorities and benefits afforded by the Uniform
Commercial Code in effect in the State of California (the "Uniform
-------
Commercial Code").
---------------
SECTION 5. Further Assurances.
------------------
(a) The Grantor agrees from time to time that, at the expense of
the Grantor, the Grantor will promptly execute and deliver all further
instruments and documents, and take all further action required, or that
the Collateral Agent may reasonably request, in order to perfect, protect
and maintain the priority of any pledge, assignment or security interest
granted or purported to be granted hereunder or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
B-5
(b) The Grantor hereby authorizes the Collateral Agent on behalf of
the Secured Parties entitled to the benefit thereof pursuant to the terms
hereof to file one or more financing or continuation statements, and
amendments thereto, relating to all or any part of the Collateral without
the signature of the Grantor where permitted by law. A photocopy or other
reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
SECTION 6. Voting Rights; Dividends; Payments; etc.
---------------------------------------
(a) Until the occurrence of an Event of Default and the continuance
thereof beyond any grace period applicable thereto:
(i) The Grantor shall be entitled to exercise any and all
voting or consensual rights and powers and stock purchase or
subscription rights relating or pertaining to the Pledged Securities
for any purpose;
(ii) The Grantor shall be entitled to receive and retain any
and all lawful dividends payable in respect of the Pledged
Securities which are paid in cash by any issuer, but all dividends
and distributions in respect of such Collateral or any part thereof
made in shares of stock or other property or representing any return
of capital, whether resulting from a subdivision, combination or
reclassification of such Collateral or any part thereof or received
in exchange for such Pledged Securities or any part thereof or as a
result of any merger, consolidation, acquisition or other exchange
of assets to which any issuer of Pledged Securities may be a party
or otherwise or as a result of any exercise of any stock purchase or
subscription right, shall be and become part of the Collateral
hereunder and, if received by the Grantor, shall be forthwith
delivered to the Collateral Agent on behalf of the Secured Parties
in due form for transfer (i.e., endorsed in blank or accompanied by
stock or bond powers executed in blank) to be held for the purposes
of this Agreement.
(iii) The Collateral Agent shall execute and deliver, or cause
to be executed and delivered, to the Grantor, all such proxies,
powers of attorney, dividend orders and other instruments as the
Grantor may request in writing (upon which the Collateral Agent may
fully rely) for the purpose of enabling the Grantor to exercise the
rights and powers which it is entitled to exercise pursuant to
subclause (i) above and to receive the dividends which it is
-------------
authorized to retain pursuant to subclause (ii) above.
--------------
(iv) The Grantor shall be entitled to (A) collect all regular
payments made or proceeds received with respect to the Pledged Debt
and (B) enforce and prosecute all rights and remedies available
under any of the Pledged Debt.
(v) For all purposes under this Agreement, "Event of Default"
means (A) prior to the Debt Exchange Closing Date, an Event of
Default as defined in
B-6
the Senior Secured Debt, (B) from and after the Debt Exchange
Closing Date and so long as any Senior Secured Debt shall remain
outstanding, an Event of Default as defined in the Exchange Notes
Indenture or in the Senior Secured Debt, (C) after the Senior
Secured Debt has been paid in full, an Event of Default as defined
in the Exchange Notes Indenture and (D) after the Senior Secured
Debt and the Exchange Notes have been paid in full, an Event of
Default as defined in the Secured Convertible Subordinated Debt.
(b) After the occurrence of an Event of Default and the continuance
thereof beyond any grace period applicable thereto, all rights and powers
which the Grantor is entitled to exercise pursuant to Section 6(a)(i)
---------------
hereof, and all rights of the Grantor to receive and retain dividends
pursuant to Section 6(a)(ii) hereof, and all rights of the Grantor to
----------------
receive payments pursuant to Section 6(a)(iv) hereof, shall forthwith
----------------
cease, and all such rights and powers shall thereupon become vested in the
Collateral Agent which shall have, during the continuance of such Event of
Default, the sole and exclusive authority to exercise such rights and
powers and to receive such dividends and payments. Any and all money and
other property paid over to or received by the Collateral Agent pursuant to
this clause (b) shall be retained by the Collateral Agent as additional
Collateral hereunder and applied in accordance with the provisions hereof.
SECTION 7. Place of Perfection; Records. The Grantor shall keep its chief
----------------------------
place of business and chief executive office and the office where it keeps its
records concerning the Collateral, at the location therefor specified on
Schedule III or, upon prior written notice to the Collateral Agent, at such
------------
other locations in a jurisdiction where all actions required by Section 5 shall
---------
have been taken with respect to the Collateral.
SECTION 8. Transfers and Other Liens; Additional Shares. Except as
--------------------------------------------
otherwise permitted under the Recapitalization Agreement, the Grantor shall not
(a) sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (b) create or suffer
to exist any Lien upon or with respect to any of the Collateral.
SECTION 9.
(a) Appointment and Authorization of Collateral Agent. By acceptance of
-------------------------------------------------
the Senior Secured Debt or execution and delivery of the Exchange Notes
Indenture or the Subordinated Debt Indenture, as the case may be, each
Secured Party hereby irrevocably designates and appoints WTC as the
Collateral Agent of such Secured Party under this Agreement and each
Secured Party hereby irrevocably authorizes the Collateral Agent to execute
this Agreement and (i) to take action on its behalf and exercise such
powers and use such discretion as are expressly permitted hereunder and all
instruments relating hereto and thereto and (ii) to exercise such powers
and perform such duties as are, in each case, expressly delegated to the
Collateral Agent by terms hereof and thereof together with such other
powers and discretion as are reasonably incidental hereto and thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement,
the Collateral Agent shall not have any duties or
B-7
responsibilities except those expressly set forth herein or therein or any
fiduciary relationship with any Secured Party and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or otherwise exist against the Collateral Agent.
(b) Delegation of Duties. The Collateral Agent may exercise its powers
--------------------
and execute any of its duties under this Agreement by or through employees,
agents or attorneys-in-fact and shall be entitled to take and to rely on
advice of counsel concerning all matters pertaining to such powers and
duties. The Collateral Agent may use the services of such persons as the
Collateral Agent in its sole discretion may determine and all reasonable
fees and expenses of such persons shall be borne by the Grantor.
(c) Exculpatory Provisions. Neither the Collateral Agent nor any of its
----------------------
officers, partners, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action taken or omitted to be taken
by it or such Person under or in connection with this Agreement or any
Collateral (except for its or such person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Secured
Parties for any recitals, statements, representations or warranties made by
the Grantor or any officer thereof contained in, or made or deemed to be
made in connection with, any Senior Secured Debt, Convertible Subordinated
Debt, Exchange Notes, or this Agreement or in any certificate, report,
statement or other document referred to or provided for in, or received by
the Collateral Agent under or in connection with, this Agreement or any
Senior Secured Debt, Convertible Subordinated Debt or Exchange Notes, or
for the due execution, legality, validity, effectiveness, genuineness,
enforceability or sufficiency of the Senior Secured Debt, Convertible
Subordinated Debt, Exchange Notes or this Agreement or any other document
or instrument furnished pursuant thereto or for any failure of the Grantor
to perform its obligations thereunder. The Collateral Agent shall be under
no obligation to the Secured Parties to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, statements
made in, or conditions of the Senior Secured Debt, Convertible Subordinated
Debt, Exchange Notes or this Agreement or to inspect the property,
including the books and records, of the Grantor.
(d) Reliance by the Collateral Agent. The Collateral Agent shall be
--------------------------------
entitled to rely, and shall be fully protected and shall incur no liability
in acting and relying, upon any writing, resolution, notice, consent,
certificate, affidavit, telegram, telecopy, telex or teletype message,
statement, order or other document or telephone conversation reasonably
believed by it to be genuine and correct and to have been signed, sent or
made by the proper person or persons and upon advice and statements of
legal counsel, including without limitation counsel to the Grantor,
independent accountants and other experts selected by the Collateral Agent.
Without limiting the generality of the foregoing, the Collateral Agent may
treat the payee of any Senior Secured Debt, Convertible Subordinated Debt
or Exchange Note as the registered holder thereof until it receives notice
or otherwise has actual knowledge that such payee is no longer the
registered holder of such Senior Secured Debt or Exchange Note.
Notwithstanding anything to the contrary contained herein, the Collateral
Agent shall be fully justified in
B-8
failing or refusing to take action under this Agreement, including without
limitation the exercise of any rights or remedies under, or the entering
into of any agreement amending, modifying, supplementing, waiving any
provision of, or the giving of consent pursuant to, any provision of this
Agreement, unless it shall first receive instructions of the Required
Noteholders (as defined below) as contemplated by Section 10 hereof and it
----------
shall first be indemnified to its reasonable satisfaction by the Senior
Secured Debt Purchasers, the holders of the Exchange Notes and/or the
Convertible Subordinated Debt Purchasers against any and all liability and
expense that may be incurred by it by reason of taking, continuing to take
or refraining from taking any such action. For the purpose hereof, the
"Required Noteholders" shall mean, at any time, the holders of at least 51%
--------------------
of the outstanding principal amount of all Senior Secured Debt, until such
time as no Senior Secured Debt shall be outstanding, at which time
"Required Noteholders" shall mean the Senior Debt Trustee acting at the
direction of the holders of a majority in principal amount of the then
outstanding Exchange Notes as provided in Section 6.05 of the Exchange
Notes Indenture, until such time as no Exchange Notes shall be outstanding,
at which time "Required Noteholders" shall mean the Subordinated Debt
Trustee acting at the direction of the holders of a majority in principal
amount of the then outstanding Convertible Subordinated Notes as provided
in Section 6.05 of the Subordinated Debt Indenture. The Collateral Agent
shall in all such cases be fully protected in acting or in refraining from
acting under this Agreement in accordance with the provisions of Section
-------
10(e) hereof and in accordance with written instructions and any action
-----
taken or any failure to act pursuant thereto shall be binding upon all the
Secured Parties and all other holders from time to time of the Senior
Secured Debt and Exchange Notes.
(e) Knowledge or Notice of Default and Event of Default. The
---------------------------------------------------
Collateral Agent shall not be deemed to have actual, constructive, direct
or indirect knowledge or notice of the occurrence of any Default or Event
of Default unless and until the Collateral Agent has received written
notice from a Secured Party or the Grantor describing such Default (as
defined below) or Event of Default, setting forth in reasonable detail the
facts and circumstances thereof and stating that the Collateral Agent may
rely on such notice without further inquiry. The Collateral Agent shall
have no obligation or duty prior to or after receiving any such notice to
inquire whether a Default or Event of Default has in fact occurred and
shall be entitled to rely, and shall be fully protected in so relying, on
any such notice furnished to it. For the purpose hereof, "Default" means
(A) prior to the Debt Exchange Closing Date, a Default as defined in the
Senior Secured Debt, (B) from and after the Debt Exchange Closing Date and
so long as any Senior Secured Debt shall remain outstanding, a Default as
defined in the Exchange Notes Indenture or the Senior Secured Notes, (C)
after the Senior Secured Debt has been paid in full, a Default as defined
in the Exchange Notes Indenture and (D) after the Exchange Notes have been
paid in full, a Default as defined in the Subordinated Debt Indenture.
(f) Non-Reliance on Collateral Agent and Other Secured Parties. By
----------------------------------------------------------
acceptance of the Senior Secured Debt or execution and delivery of the
Exchange Notes Indenture or the Subordinated Debt Indenture, as the case
may be, each Secured Party expressly acknowledges that, except as expressly
set forth in this Agreement, neither the Collateral Agent nor any of the
Collateral Agent's partners, officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties
to it and that no act by the Collateral Agent hereinafter taken, including
any review of the affairs of the Grantor, shall be deemed to constitute any
representation or warranty by the Collateral Agent to any Secured Party.
B-9
Except for notices, reports and other documents expressly required to be
furnished by the Collateral Agent hereunder, the Collateral Agent shall not
have any duty or responsibility to provide the Secured Parties with any
credit or other information concerning the business, operations, property,
financial and other condition and credit-worthiness of the Grantor that may
come into the possession of the Collateral Agent or any of its partners,
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
(g) Indemnification. The Grantor agrees to indemnify WTC from and
---------------
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time, including, without limitation, at any time
following the payment of the Secured Obligations, be imposed on, incurred
by or asserted against the Collateral Agent in any way relating to or
arising out of its capacity as Collateral Agent or the Recapitalization
Agreement or the Related Agreements or actions or omissions of the
Collateral Agent specifically required or permitted by this Agreement or by
written instructions of the Required Noteholders pursuant to Section 10(c)
-------------
hereof , including without limitation, costs incurred in performance of its
duties under Section 9(a), provided that the Grantor shall not be liable
------------
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Collateral Agent's gross negligence
of willful misconduct. The agreements in this Section 9(g) shall survive
------------
the payment of the Secured Obligations and the termination of this
Agreement.
(h) Collateral Agent in its Individual Capacity. The Collateral Agent
-------------------------------------------
and its Affiliates may generally engage in any kind of business with the
Grantor as though such person was not the Collateral Agent hereunder and
without any duty to account therefore to the Secured Parties.
B-10
(i) Successor Collateral Agent.
--------------------------
(i) The Collateral Agent may resign at any time upon 60 days notice
to the Secured Parties and Grantor and may be removed at any time, with or
without cause, by the Required Noteholders by written notice delivered to
the Grantor, the Collateral Agent and the Secured Parties. After any
resignation or removal hereunder of the Collateral Agent, the provisions of
this Section 9(i) shall continue to inure to its benefit as to any actions
------------
taken or omitted to be taken by it in connection with its agency hereunder
while it was the Collateral Agent under this Agreement and it shall be
entitled to be paid promptly when due any amounts owing to it pursuant to
Section 9.6.
-----------
(ii) Upon receiving notice of any such resignation or removal, a
successor Collateral Agent shall be appointed by the Required Noteholders,
provided, however, that such successor Collateral Agent shall be (A) a
Person having a combined capital and surplus of at least $50 million and
(B) authorized under bylaw to assume the functions of the Collateral Agent.
If the appointment of such successor shall not have become effective, as
provided below, within such 60-day period after the Collateral Agent's
resignation or upon removal of the Collateral Agent, then the Collateral
Agent may petition a court of competent jurisdiction for the appointment of
a Collateral Agent. Such court shall, after such notice as it may deem
proper, appoint a successor Collateral Agent meeting the qualifications
specified in this Section 9(i)(ii).
----------------
(iii) The resignation or removal of a Collateral Agent shall become
effective upon the execution and delivery of such documents or instruments
as are necessary to transfer the rights and obligations of the Collateral
Agent under this Agreement, including without limitation, the delivery and
recordation of all amendments, instruments, financing statements,
continuation statements and other documents necessary to maintain the
perfection of the security interests held by the Collateral Agent under
this Agreement. Copies of each such document or instrument shall be
delivered to all Secured Parties. The appointment of a successor Collateral
Agent pursuant to this Section 9(i) shall become effective upon the
------------
acceptance of the appointment as Collateral Agent hereunder by a successor
Collateral Agent. Upon such effective appointment, the successor Collateral
Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent and the retiring
Collateral Agent shall be discharged from its rights, powers, privileges
and duties under this Agreement, but shall remain liable for its actions
prior to and including such date of discharge.
SECTION 10. Actions by the Collateral Agent.
-------------------------------
(a) Duties and Obligations. The duties and obligations of the Collateral
----------------------
Agent are only those set forth in this Agreement.
B-11
(b) Notification of Default. If the Collateral Agent has been notified in
-----------------------
a writing conforming to the requirements of Sections 9 (d) and (e) by any
-------------- ---
Secured Party or Grantor that a Default or an Event of Default has occurred, the
Collateral Agent shall promptly furnish, and in any event no later than three
Business Days after receipt of such notice, to the Secured Parties a copy of
such written notice (a "Default Notice"). The failure of any Secured Party
--------------
having knowledge of the occurrence of a Default or an Event of Default to notify
the Collateral Agent or any Secured Party of such occurrence, however, does not
constitute a waiver of such Default or Event of Default by the Secured Parties.
If the Required Noteholders have not given prior instructions to the Collateral
Agent, the Default Notice may contain a recommendation of actions to be taken by
the Secured Parties and/or request instructions from the Secured Parties and
shall specify the date on which responses are due in order to be timely within
Section 10(d) hereof. If the Required Noteholders have given prior instructions
-------------
to the Collateral Agent, the Collateral Agent shall take the actions requested
by the Required Noteholders and the Default Notice shall inform the other
Secured Parties of such actions.
(c) Exercise of Remedies. Except as otherwise provided in Section 10(e)
-------------------- -------------
and Section 21, the Collateral Agent shall take only such actions and exercise
only such remedies under this Agreement as are approved in written instructions
delivered to the Collateral Agent and signed by the Required Noteholders. If the
Collateral Agent shall determine in good faith that taking the actions specified
in such instructions is contrary to law, it may refrain, and shall be fully
protected in so refraining, from taking such action and shall immediately give
notice of such fact to each of the Secured Parties. If instructions received by
the Collateral Agent are in its good faith judgment ambiguous or conflict with
other instructions received by the Collateral Agent, the Collateral Agent (a)
shall promptly notify the Secured Parties of such ambiguity or conflict and
request clarifying instructions, and (b) may either (1) delay in taking any such
action or exercising any such remedy pending receipt of such clarifying
instructions, and shall be fully protected in so delaying, or (2) take such
actions as it is entitled under Section 10(e).
-------------
(d) Instructions from Senior Secured Debt Purchasers. If any Senior Secured
------------------------------------------------
Debt Purchaser does not respond in a timely manner to any notice, including
without limitation a Default Notice, from the Collateral Agent or request for
instructions within the time period specified by the Collateral Agent in such
notice or request for instructions, which shall be a minimum of five Business
Days, the Senior Secured Debt held by such Senior Secured Debt Purchaser that
would otherwise be included in a determination of Required Noteholders shall not
be included in the determination of Required Noteholders for purposes of such
notice or request for instructions. Any action taken or not taken without the
vote of a Senior Secured Debt Purchaser under this Section 10(d) shall
nevertheless be binding on such Senior Secured Debt Purchaser.
(e) Emergency Actions. If the Collateral Agent has asked the Secured
-----------------
Parties for instructions and if the Required Noteholders have not yet responded
to such request, the Collateral Agent shall be authorized to take, but shall not
be required to take and shall in no event have any liability for the taking or
the failure to take, such actions, other than any action described or permitted
under Section 21 hereof, with regard to a Default or
----------
B-12
Event of Default that the Collateral Agent, in good faith, believes to be
reasonably required to promote and protect the interests of the Secured Parties
and to maximize both the value of the Collateral and the present value of the
recovery by the Secured Parties on the Secured Obligations and shall give the
Secured Parties appropriate notice of such action, provided that once
instructions with respect to such request have been received by the Collateral
Agent from the Required Noteholders, the actions of the Collateral Agent shall
be governed thereby and the Collateral Agent shall not take any further action
that would be contrary thereto.
(f) Other Actions. The Collateral Agent shall have the right to take such
-------------
actions, or omit to take such actions, hereunder and not inconsistent with the
written instructions of the Required Noteholders delivered pursuant to Section
-------
10(c) hereof, including actions the Collateral Agent deems necessary or
-----
appropriate to perfect or continue the perfection of the liens on the Collateral
for the benefit of the Secured Parties. Except as otherwise provided by the
applicable law, the Collateral Agent shall have no duty as to any Collateral,
the perfection, protection or maintenance of any pledge, assignment or security
interest in the Collateral, the collection or protection of the Collateral or
any income thereon, including any duty to ascertain or take action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, nor as to the preservation of rights against prior
parties, nor as to the preservation of rights pertaining to the Collateral
beyond the safe custody of any Collateral in the Collateral Agent's actual
possession.
(g) Cooperation. To the extent that the exercise of the rights, powers
-----------
and remedies of the Collateral Agent in accordance with this Agreement requires
that any action be taken by any Secured Party, by acceptance of the Senior
Secured Debt or the Exchange Notes, as the case may be, such Secured Party
agrees to take such action and cooperate with the Collateral Agent to ensure
that the rights, powers and remedies of all Noteholders are exercised in full.
(h) Distribution of Proceeds. All amounts owing with respect to the
------------------------
Secured Obligations shall be secured by the Collateral without distinction as to
whether some Secured Obligations are then due and payable and other Secured
Obligations are not then due and payable. Upon any realization upon the
Collateral, by acceptance of the Senior Secured Debt or execution and delivery
of the Exchange Notes Indenture or the Subordinated Debt Indenture, as the case
may be, the Secured Parties agree that the proceeds thereof shall be applied,
(i) first, to the amounts owing by the Grantor to the Collateral Agent solely in
its capacity as Collateral Agent hereunder pursuant to this Agreement, (ii)
second, ratably to the payment of all amounts of interest outstanding on the
Senior Secured Debt according to the aggregate amounts of such interest then
owing to each Senior Secured Debt Purchaser, (iii) third, ratably to all amounts
of principal outstanding under the Senior Secured Debt according to the
aggregate amounts of such principal then owing to each Senior Secured Debt
Purchaser, (iv) fourth, ratably to all other amounts then due to the Senior
Secured Debt Purchasers, including fees and expenses, (v) fifth, to all fees and
out-of-pocket expenses owed to the Senior Debt Trustee and Subordinated Debt
Trustee under the Exchange Note Indenture and the Subordinated Debt Indenture,
as the case may be, (vi) sixth, ratably to the payment of all amounts of
interest outstanding on the
B-13
Exchange Notes according to the aggregate amounts of such interest then owing to
each holder thereof, (vii) seventh, ratably to all amounts of principal
outstanding under the Exchange Notes according to the aggregate amounts of
principal then owing to each holder thereof, (viii) eighth, ratably to all other
amounts then due to the holders of the Exchange Notes, including fees and
expenses, (ix) ninth, ratably to the payment of all amounts of interest
outstanding on the Convertible Subordinated Debt according to the aggregate
amounts of interest then owing to each Convertible Subordinated Debt Purchaser,
(x) tenth, ratably to all amounts of principal outstanding under the Convertible
Subordinated Debt according to the aggregate amounts of principal then owing to
each Convertible Subordinated Debt Purchaser, (xi) eleventh, ratably to all
other amounts then due to the Convertible Subordinated Debt Purchasers,
including fees and expenses and (xii) twelfth, the balance, if any, shall be
returned to the Grantor or such other Persons as are entitled thereto. Upon the
request of the Collateral Agent prior to any distribution under this Section
-------
10(h), each Secured Party shall provide to the Collateral Agent certificates, in
-----
form and substance reasonably satisfactory to the Collateral Agent, setting
forth the respective amounts referred to in clauses (ii) through (x) above that
each such Secured Party believes it is entitled to receive, together with such
wire transfer information or other payment instructions as the Collateral Agent
may reasonably request.
(i) Authorized Investments. Prior to any realization upon the Collateral,
----------------------
any and all funds held by the Collateral Agent in its capacity as Collateral
Agent, whether pursuant to any provision of this Agreement shall, to the extent
feasible, within a reasonable time, be invested by the Collateral Agent in
Permitted Investments (as defined on Schedule IV). Prior to making such
investment or to the extent it is not feasible to invest such funds in Permitted
Investments, the Collateral Agent shall hold any such funds in an interest
bearing account. By acceptance of the Senior Secured Debt or the Exchange Notes,
as the case may be, each Secured Party authorizes the Collateral Agent to open
such an account. Any interest earned on such funds shall be retained in such
account until there shall be a realization on the Collateral, at which time such
funds shall be disbursed to the Secured Parties in accordance with Section
-------
10(h). The Collateral Agent shall have no duty to place funds held and invested
-----
pursuant to this Section 10(i) in investments that provide for a maximum return.
-------------
The Collateral Agent shall not be responsible for any loss of any funds invested
in accordance with this Section 10(i).
-------------
SECTION 11. Priority of Notes.
-----------------
(a) From and after the Debt Exchange Closing Date until all Senior Secured
Debt shall have been paid in full, exchanged for Exchange Notes or otherwise
retired, in the event of:
(i) the occurrence of an Event of Default (as such term is defined in
the Senior Secured Debt) and continuance thereof beyond any grace period
provided in the Senior Secured Debt;
B-14
(ii) any acceleration of the maturity of any other indebtedness of the
Grantor, or
(iii) the institution of any liquidation, dissolution, bankruptcy,
insolvency or similar proceeding relating to the Grantor, its property, or
its creditors as such,
the holders of the Exchange Notes and the Convertible Subordinated Debt
Purchasers shall not be entitled to receive and, by execution and delivery of
the Exchange Notes Indenture or the Secured Convertible Subordinated Debt
Indenture, as the case may be, the Senior Debt Trustee and the Subordinated Debt
Trustee, on behalf of the holders of the Exchange Notes and the Convertible
Subordinated Debt Purchasers, agree not to accept, any payment of principal or
interest until all amounts owing in respect of the Senior Secured Debt shall
have been paid in full; and from and after the happening of any event described
in clause (iii) of this subsection (a) of Section 11, all payments and
----------
distributions of any kind or character (whether in cash, securities or property)
which, except for the provisions hereof, would have been payable or
distributable to or for the benefit of the holders of the Exchange Notes or the
Convertible Subordinated Debt Purchasers, shall be made to and for the benefit
of the Senior Secured Debt Purchasers (who shall be entitled to make all
necessary claims therefore) in accordance with the priorities of payment set
forth herein until all Senior Secured Debt shall have been paid in full. In the
event that any payment or distribution is made with respect to the Exchange
Notes or the Convertible Subordinated Debt in violation of the terms hereof, any
Secured Party receiving such payment or distribution shall (and, by acceptance
of the Exchange Notes or the Convertible Subordinated Debt, agrees to) hold it
in trust for the benefit of, and shall remit it to, the Senior Secured Debt
Purchasers in accordance with the priorities of payment set forth herein.
(b) From and after all Senior Secured Debt shall have been paid in full,
exchanged for Exchange Notes or otherwise retired, and until the Exchange
Notes shall have been paid in full or otherwise retired, in the event of:
(i) the occurrence of an Event of Default (as such term is
defined in the Exchange Notes Indenture) and continuance thereof beyond any
grace period provided in the Exchange Notes Indenture;
(ii) any acceleration of the maturity of any other indebtedness of
the Grantor, or
(iii) the institution of any liquidation, dissolution, bankruptcy,
insolvency or similar proceeding relating to the Grantor, its property, or
its creditors as such,
the Convertible Subordinated Debt Purchasers shall not be entitled to receive
and, by execution and delivery of the Subordinated Debt Indenture, the
Subordinated Debt Trustee, on behalf of the holders of the Convertible
Subordinated
B-15
Debt agree not to accept, any payment of principal or interest until all
amounts owing in respect of the Exchange Notes shall have been paid in
full; and from and after the happening of any event described in clause
(iii) of this subsection (b) of Section 11, all payments and distributions
----------
of any kind or character (whether in cash, securities or property) which,
except for the provisions hereof, would have been payable or distributable
to or for the benefit of the Convertible Subordinated Debt Purchasers,
shall be made to and for the benefit of the holders of the Exchange Notes
(who shall be entitled to make all necessary claims therefore) in
accordance with the priorities of payment set forth herein until all
Exchange Notes shall have been paid in full. In the event that any payment
or distribution is made with respect to the Convertible Subordinated Debt
in violation of the terms hereof, any Secured Party hereof receiving such
payment or distribution shall (and, by acceptance of the Convertible
Subordinated Debt, agrees to) hold it in trust for the benefit of, and
shall remit it to, the holders of the Exchange Notes in accordance with the
priorities of payment set forth herein.
SECTION 12. Status of Security Interests.
----------------------------
(a) From and after the Debt Exchange Closing Date until all Senior
Secured Debt shall have been paid in full, exchanged for Exchange Notes or
otherwise retired, the Collateral Agent, the Senior Debt Trustee, the
Subordinated Debt Trustee, and, by acceptance of the Senior Secured Debt,
the Exchange Notes or the Convertible Subordinated Debt, as the case may
be, the Senior Secured Debt Purchasers, the holders of Exchange Notes and
the Convertible Subordinated Debt Purchasers hereby agree that (i) all of
the Senior Secured Debt Purchasers' security interests, liens, and other
collateral interests in the Collateral and all of the Senior Secured Debt
Purchasers' rights and remedies, under law, agreement, or otherwise,
exercisable pursuant thereto (all of which interests and rights are herein
called the "Senior Rights") shall be senior and superior to (ii) all of the
-------------
holders of the Exchange Notes', the Senior Debt Trustee's, the Convertible
Subordinated Debt Purchasers' and the Subordinated Debt Trustee's security
interests, liens and other collateral interests in the Collateral and all
of the holders of Exchange Notes', the Senior Debt Trustee's, the
Convertible Subordinated Debt Purchasers' and the Subordinated Debt
Trustee's rights and remedies, under law, agreement or otherwise,
exercisable pursuant thereto (all of which interests and rights are herein
called the "Junior Rights").
-------------
(b) From and after all Senior Secured Debt shall have been paid in
full, exchanged for Exchange Notes or otherwise retired and until the
Exchange Notes have been paid in full or otherwise retired, the Collateral
Agent, the Senior Debt Trustee, the Subordinated Debt Trustee and, by
acceptance of the Convertible Subordinated Debt or the Exchange Notes, as
the case may be, the Convertible Subordinated Debt Purchasers and the
holders of Exchange Notes hereby agree that (i) all of the Senior Debt
Trustee's and the holders of Exchange Notes' security interests, liens, and
other collateral interests in the Collateral and all of the Senior Debt
Trustee's and the holders of Exchange Notes' rights and remedies, under
law, agreement, or otherwise, exercisable pursuant thereto (all of which
interests and rights are herein called the "Senior Rights") shall be senior
-------------
and superior to (ii) all of the Convertible Subordinated Debt Purchasers'
and the Subordinated
B-16
Debt Trustee's security interests, liens and other collateral interests in
the Collateral and all of the Convertible Subordinated Debt Purchasers' and
the Subordinated Debt Trustee's rights and remedies, under law, agreement
or otherwise, exercisable pursuant thereto (all of which interests and
rights are herein called the "Junior Rights").
-------------
(c) For purposes hereof, a party whose security interests are "senior
and superior" (as described in Sections 12(a) and 12(b)) shall possess the
-------------- -----
right, in its absolute discretion, (i) to make all decisions on the
disposition of any Collateral in which such party's security interests are
"senior and superior" (including, without limitation, foreclosing on such
collateral or refraining from foreclosing), notwithstanding that any or all
of the Grantor's obligations to the holders of the Junior Rights (as
defined for purposes of Sections 12(a) and 12(b), as applicable) may be due
-------------- -----
and owing or the Grantor may be in default in any other manner with regard
to its obligations to the holders of the Junior Rights, (ii) to exercise or
not exercise all rights granted to such secured party with regard to all or
any of such Collateral, (iii) to act on behalf of the holders of the Junior
Rights as their agent, not, however, at the direction of the holders of the
Junior Rights, but with full right and authority to make the judgments and
to take the actions such agent would be permitted to accomplish in its own
right with regard to its own Collateral pursuant to clauses (i) and (ii) of
this sentence and (iv) to apply all proceeds obtained from Collateral on
account of the Senior Rights (as defined for purposes of Sections 12(a) and
--------------
12(b), as applicable), in such order as the holder of the Senior Rights
-----
shall determine.
SECTION 13. Agreement Available Only to Parties and Collateral Agent.
--------------------------------------------------------
Notwithstanding anything to the contrary herein, the parties hereto have entered
into this Agreement solely for their own benefit and in order to establish
solely with respect to each other and not with respect to the Grantor their
respective rights to payment of the Secured Obligations, their respective rights
to the proceeds of the Collateral and their respective rights and priorities
with respect to certain other matters, all as more fully set forth herein. No
person or entity other than the parties hereto shall have any rights, whether as
third party beneficiary or otherwise, under this Agreement, and no agreement,
statement or provision of this Agreement shall be deemed to be an admission by
or against any of the parties hereto or be used by any person or entity, except
the parties hereto, for any purpose whatsoever.
SECTION 14. Rights Unaffected. The relative rights of the parties herein
-----------------
in and to the Collateral set out in this Agreement shall be unaffected by any
consent or waiver with respect to, or renewal or extension of, the Secured
Obligations.
SECTION 15. Collateral Agent's Fees, Costs and Expenses. Grantor agrees
-------------------------------------------
to pay such fees to the Collateral Agent as mutually agreed from time to time
and to pay all reasonable out-of-pocket costs and expenses of the Collateral
Agent.
SECTION 16. Remedies. If any Event of Default shall have occurred and be
--------
continuing beyond any grace period applicable thereto:
(a) The Collateral Agent may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it under
B-17
applicable law, all the rights and remedies of a secured party upon default
under the Uniform Commercial Code (whether or not the Uniform Commercial
Code applies to the affected Collateral) and also may (i) require the
Grantor to, and the Grantor hereby agrees that it shall at its expense and
upon request of the Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Collateral Agent and make it available to the
Collateral Agent at a place to be designated by the Collateral Agent that
is reasonably convenient to both parties, and (ii) without notice, except
as specified below, advertisement, hearing or process of law of any kind,
sell the Collateral or any part thereof in one or more parcels free and
clear of all rights and claims of the Grantor at public or private sale,
for cash, on credit or for future delivery, and upon such other terms as
the Collateral Agent may deem commercially reasonable. The Grantor agrees
that, to the extent notice of sale shall be required by law, at least 10
Business Days' notice to the Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification.
(b) All cash proceeds received in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may be
held by the Collateral Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any fees and expenses of the
Collateral Agent) in whole or in part against, all or any part of the
Secured Obligations. Any surplus of such cash or cash proceeds remaining
after payment in full of all the Secured Obligations shall be promptly paid
over to the Grantor or to whomsoever may be lawfully entitled to receive
such surplus.
(c) The Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with any sale of Collateral as it
may be advised by counsel is necessary in order to (i) avoid any violation
of applicable law (including, without limitation, compliance with such
procedures as may restrict the number of prospective bidders and purchasers
and/or further restrict such prospective bidders or purchasers to persons
or entities who will represent and agree that they are purchasing for their
own account for investment and not with a view to the distribution or
resale of such Collateral) or (ii) obtain any required approval of the sale
or of the purchase by any governmental regulatory authority or official.
SECTION 17. Establishing Required Noteholders. In order to establish
---------------------------------
what constitutes the Required Noteholders, the Collateral Agent may request from
time to time, and, by acceptance of the Senior Secured Debt, the Senior Secured
Debt Purchasers agree to provide, certificates setting forth the amount of the
Senior Secured Debt held or represented by each Senior Secured Debt Purchaser,
which certificates the Collateral Agent shall be entitled to rely on.
SECTION 18. Amendments: Waivers; Etc. No amendment or waiver of any
------------------------
provision of this Agreement, and no consent to any departure by the Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Collateral Agent and the Grantor, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
B-18
SECTION 19. Addresses for Notices. All notices and other communications
---------------------
provided to the parties hereto shall be in writing or by facsimile and
addressed, delivered or transmitted to such party at its address or facsimile
number set forth below its signature hereto or at such other address or
facsimile number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid or
if properly addressed and sent by pre-paid courier service, shall be deemed
given when received; any notice, if transmitted by facsimile, shall be deemed
given when transmitted.
SECTION 20. Continuing Security Interest; Assignments under the
---------------------------------------------------
Recapitalization Agreement. This Agreement shall create a continuing security
--------------------------
interest in the Collateral and shall: (a) remain in full force and effect until
all Secured Obligations have been paid in full, (b) be binding upon the Grantor,
its successors and assigns and (c) inure, together with the rights and remedies
of the Secured Parties hereunder, to the benefit of the Secured Parties and
their respective permitted successors, transferees and assigns.
SECTION 21. Termination. When all Secured Obligations have been paid in
-----------
full, the security interest granted hereby shall terminate and all rights to the
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof shall revert to the Grantor. Upon the termination of any such
security interest, the Collateral Agent shall promptly return to the Grantor,
upon the Grantor's request and at the Grantor's expense, such of the Collateral
(and, in the case of a release, such of the released Collateral) held by the
Collateral Agent as shall not have been sold or otherwise applied pursuant to
the terms hereof. The Collateral Agent will, at the Grantor's expense, execute
and deliver to the Grantor such other documents as the Grantor shall reasonably
request to evidence such termination or release, as the case may be.
SECTION 22. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED BY
--------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO CONFLICTS OF LAW PRINCIPLES, except to the extent that the validity
or perfection of the security interest hereunder, or remedies hereunder, in
respect of any particular Collateral are governed by the laws of a jurisdiction
other than the State of New York and except that the rights and duties of WTC
shall be governed by and construed in accordance with the laws of the State of
Delaware. Unless otherwise defined herein or in the Recapitalization Agreement,
terms used in Article 9 of the Uniform Commercial Code are used herein as
therein defined.
SECTION 23. Severability of Provisions. 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 24. Counterparts. This Agreement may be executed in any number
------------
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile shall be
as effective as delivery of a manually executed counterpart of this Agreement.
B-19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
IMPERIAL CREDIT INDUSTRIES, INC.
By:______________________________________________
Name: H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
Address: 23550 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇-▇▇▇▇
WILMINGTON TRUST COMPANY, in its capacity as
Collateral Agent on behalf of the Secured Parties
By:_____________________________________________
Name: ▇▇▇ ▇▇▇▇▇
Title: Vice President
Address: ______________________________________
______________________________________
Facsimile: ______________________________________
B-20
EFFECTIVE ON THE DEBT EXCHANGE CLOSING DATE:
CHASE MANHATTAN BANK AND TRUST COMPANY, N.A., as
Senior Debt Trustee for the holders of Exchange
Notes
By:______________________________________________
Title:___________________________________________
Address: _____________________________________
_____________________________________
Facsimile: _____________________________________
B-21
EFFECTIVE ON THE SUBORDINATED DEBT PLACEMENT CLOSING DATE
CHASE MANHATTAN BANK AND TRUST COMPANY, N.A., as
Subordinated Debt Trustee for the Convertible
Subordinated Debt Purchasers
By:______________________________________________
Title:___________________________________________
Address: ____________________________________
____________________________________
Facsimile: ____________________________________
B-22
Schedule I
Pledged Debt
------------
1. Subordinated Note, dated March 31, 1997, issued to Imperial Credit
Industries, Inc. in the current principal amount of Twenty Million Dollars
($20,000,000), due and payable in full on March 31, 2007.
B-23
Schedule II
Pledged Securities
------------------
Class of Certificate Number
-------- ----------- ------
Issuer Capital Stock Number of Shares
------ ------------- ------ ---------
Southern Pacific Bank Series B Preferred Stock PB-1 36,000
Southern Pacific Bank Series A Preferred Stock PA-1 50,000
Southern Pacific Bank Common Stock 6 75,000
Southern Pacific Bank Common Stock 5 125,000
Southern Pacific Bank Common Stock 4 8,334
B-24
Schedule III
Chief Place of Business and Chief Executive Office:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Building 1, Suite 110
Torrance, California 90505
Federal Tax Identification Number:
▇▇-▇▇▇▇▇▇▇
B-25
Schedule IV
Permitted Investments
(a) Securities issued or guaranteed by the United States of America or any
subdivision, agency or instrumentality thereof, or money market mutual
funds that invest solely in such obligations.
(b) Securities issued by any state or municipality within the United States of
America rated Aa or higher by ▇▇▇▇▇'▇ Investors Service, Inc. or AA or
higher by Standard & Poor's Rating's Services, a division of The ▇▇▇▇▇▇-
▇▇▇▇ Companies, Inc. ("S&P").
(c) Deposits in or certificates of deposit issued by a commercial bank which
has combined capital and surplus in excess of $1 billion and which has, or
the holding company of which has, a bond rating of at least A from ▇▇▇▇▇'▇
Investors Service, Inc. or A1 by S&P.
(d) Open market commercial paper rated P1 by ▇▇▇▇▇'▇ Investors Service, Inc. or
A1 by S&P.
(e) Bankers' acceptances from banks referred to in paragraph (c) above.
B-26
EXHIBIT C-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE NOTES
(Pursuant to Section 2.06(b) of the Indenture)
The Chase Manhattan Bank and Trust
Company, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: 12% Senior Secured Notes due 2005 of Imperial Credit Industries,
Inc.
Reference is hereby made to the Indenture, dated as of ________, 2001
(the "Indenture"), among Imperial Credit Industries, Inc., as issuer (the
"Company"),and The Chase Manhattan Bank and Trust Company, National Association,
as trustee. Capitalized terms used by not defined herein shall have the
meanings given to them in the Indenture.
This letter relates to $_________ principal amount of Notes which are
evidenced by one or more Definitive Notes (CUSIP No. __________) and registered
with the Registrar in the name of _________ (the "Transferor"). The Transferor
has requested an exchange or transfer of such Definitive Note(s) in the form of
an equal principal amount of Notes evidenced by one or more Definitive Notes
(CUSIP No. _________), to be delivered to the Transferor or, in the case of a
transfer of such Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
the Surrendered Notes are being acquired for the Transferor's own
account, without transfer;
or
the Surrendered Notes are being transferred to the Company;
or
the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes for its own account, or for one or
more accounts with respect to which such Person exercises sole
investment discretion, and such Person
C-1-1
and each such account is a "qualified institutional buyer," within the
meaning of the Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
the Surrendered Notes are being transferred pursuant to and in
accordance with the requirements of the Securities Act, and the
Transferor hereby certifies that the Surrendered Notes are being
transferred to a Person that the Transferor reasonably believes is
purchasing the Surrendered Notes for its account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is an institutional
"accredited investor" within the meaning of Rule 591(a)(1), (2), (3)
or (7) of Regulation D under the Securities Act; and the transferee
agrees to provide a signed letter containing certain representations
and agreements regarding the transfer in a form available from the
Trustee;
or
such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A
or Rule 144, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is
supported by an Opinion of Counsel, provided by the Transferor or the
transferee (a copy of which the Transferor has attached to this
certification) in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act.
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
C-1-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company. Each of the foregoing is entitled to
reply upon this letter and are irrevocably authorized to produce this letter or
a copy to any interested party in any administrative or legal proceedings with
respect to the materials covered hereby.
[Insert Name of Transferor]
By:________________________________
Name:
Title
C-1-3
EXHIBIT C-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM GLOBAL NOTE TO DEFINITIVE NOTE
(Pursuant to Section 2.06(c) of the Indenture)
The Chase Manhattan Bank and Trust
Company, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: 12% Senior Secured Notes due 2005 of Imperial Credit Industries,
Inc.
Reference is hereby made to the Indenture, dated as of ________, 2001
(the "Indenture"), among Imperial Credit Industries, Inc., as issuer (the
"Company"), and The Chase Manhattan Bank and Trust Company, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $ ________ principal amount of Notes which are
evidenced by one or more Global Notes and held with the Depositary, through
Euroclear or Cedel Bank or both in the name of _______ (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the Notes to
a Person (the "Transferee") who will take delivery thereof in the form of an
equal principal amount of Notes evidenced by one more Definitive Notes (CUSIP
No. ________) to be registered with the Registrar in the name of _____________.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
the Surrendered Notes are being transferred to the beneficial owner of
such Notes;
or
the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes for its own account, or for one
more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting the requirements of Rule 144A;
or
the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
C-2-1
or
the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
the Surrendered Notes are being transferred pursuant to and in
accordance with the requirements of the Securities Act, and the
Transferor hereby certifies that the Surrendered Notes are being
transferred to a Person that the Transferor reasonably believes is
purchasing the Surrendered Notes for its account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is an institutional
"accredited investor" within the meaning of Rule501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act; and the Transferee
agrees to provide a signed letter containing certain representations
and agreements regarding the transfer in a form available from the
Trustee;
or
such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A
or Rule 144, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is
supported by an Opinion of Counsel, provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification) in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
C-2-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company. Each of the foregoing is entitled to
reply upon this letter and are irrevocably authorized to produce this letter or
a copy hereof to any interested party in any administrative or legal proceedings
with respect to the materials covered hereby.
[Insert Name of Transferor]
By:________________________________
Name:
Title:
Dated: _____________, _____
C-2-3
EXHIBIT C-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM DEFINITIVE NOTE TO GLOBAL NOTE
(Pursuant to Section 2.06(d) of the Indenture)
The Chase Manhattan Bank and Trust
Company, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: 12% Senior Secured Notes due 2005 of Imperial Credit Industries,
Inc.
Reference is hereby made to the Indenture, dated as of ________, 2001
(the "Indenture"), among Imperial Credit Industries, Inc., as issuer (the
"Company"), and The Chase Manhattan Bank and Trust Company, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $_________ principal amount of Notes which are
evidenced by one or more Definitive Notes (CUSIP No. ________) and registered
with the Registrar in the name of ___________ (the "Transferor"). The
Transferor has requested a transfer of such Definitive Notes to a Person who
will take delivery thereof in the form of an equal beneficial interest in Global
Notes evidenced by one or more Global Notes, which amount, immediately after
such transfer, is to be held with the Depositary, through Euroclear or Cedel
Bank or both.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
the Surrendered Notes are being transferred to the beneficial owner of
such Notes;
or
the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes for its own account, or for one
more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting the requirements of Rule 144A;
or
the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
C-3-1
or
the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
the Surrendered Notes are being transferred pursuant to and in
accordance with the requirements of the Securities Act, and the
Transferor hereby certifies that the Surrendered Notes are being
transferred to a Person that the Transferor reasonably believes is
purchasing the Surrendered Notes for its account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is an institutional
"accredited investor" within the meaning of Rule501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act; and the Transferee
agrees to provide a signed letter containing certain representations
and agreements regarding the transfer in a form available from the
Trustee;
or
such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A
or Rule 144, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is
supported by an Opinion of Counsel, provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification) in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act.;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
Upon giving effect to this request to exchange a Definitive Notes for
a beneficial interest in such Global Note, the resulting beneficial interest
shall be subject to the restrictions on transfer applicable to Global Notes
pursuant to the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company. Each of the foregoing is entitled to
rely upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceedings
with respect to the materials covered hereby.
[Insert Name of Transferor]
By:______________________________
Name:
Title:
Dated: _____________, _____
C-3-2