exv2w1
Exhibit 2.1
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John P. Schafer (State Bar No. 205638)
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Christopher E. Prince (State Bar No. 183553) |
jps@mandersonl1p.com
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cprince@lesnickprince.com |
Chris Manderson (State Bar No. 211648)
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LESNICK PRINCE LLP |
wcm@mandersonllp.com
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185 Pier Avenue, Suite 103 |
MANDERSON, SCHAFER &
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Santa Monica, CA 90405 |
McKINLAY LLP
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Telephone: (213) 291-8984 |
4695 MacArthur Court, Suite 1270
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Facsimile: (310) 396-0963
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Newport Beach, CA 92660 |
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Telephone: (949) 788-1038
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Attorneys for NEW WORLD |
Facsimile: (949) 743-8310
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ACQUISITION, LLC |
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Attorneys for SIGNATURE GROUP |
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HOLDINGS LLC |
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Mark B. Frazier (State Bar No. 107221)
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Carole Neville, Esq. (Pro Hac Vice) |
mfrazier@rutan.com
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cneville@sonnenschein.com |
Brendt C. Butler (State Bar No. 211273)
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SONNENSCHEIN, NATH & ROSENTHAL LLP |
bbutler@rutan.com |
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1221 Avenue of the Americas |
RUTAN & TUCKER, LLP
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New York, New York 10020 |
611 Anton Boulevard, Fourteenth Floor
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Telephone: (212) 768-6700 |
Costa Mesa, California 92626-1931
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Facsimile: (212) 768-6800 |
Telephone: (714) 641-5100
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Facsimile: (714) 546-9035 |
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Attorneys for JAMES A. MCINTYRE, SR.
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Attorneys for NEW WORLD |
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ACQUISITION, LLC |
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA — SANTA ANA DIVISION
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In re:
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Case No.: 8:08-bk-13421-ES |
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Chapter 11 Case
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FREMONT GENERAL CORPORATION,
a Nevada corporation, |
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SIGNATURE GROUP HOLDINGS, LLC’S CHAPTER 11
FOURTH AMENDED PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES
MCINTYRE AS CO-PLAN PROPONENT, DATED MAY 24,
2010 |
Debtor.
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Taxpayer lD No. 95-2815260 |
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SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
1
This document sets forth the Chapter II Plan of Reorganization for Fremont General
Corporation, a Nevada corporation (defined below as the “Plan”), by Plan proponent and sponsor
Signature Group Holdings, LLC (“Signature”), which is joined by James McIntyre as co-proponent, and
which reflects the terms of the Reciprocal Plan Support and Settlement Agreement by and among
Signature, Kenneth S. Grossman, and New World Acquisition, LLC (“New World”).
For a discussion of the Debtor’s history, business, operations, assets and liabilities and for
a summary and analysis of this Plan, Signature refers all parties in interest to the Disclosure
Statement for Signature Group Holdings, LLC’s Chapter II Plan of Reorganization of Fremont General
Corporation Dated January 20, 2010.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
2
TABLE OF CONTENTS
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Page(s) |
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I. DEFINITIONS AND RULES OF CONTRUCTION |
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3 |
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A. Definitions |
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B. Rules of Construction |
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15 |
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II. CLASSIFICATION AND TREATMENT |
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A. Allowance and Treatment of Unclassified Claims |
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1. Administrative Claims |
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(a) Administrative Claim Reserve |
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(b) Administrative Claims Bar Date |
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(c) Deadline for Objections to Administrative Claims |
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(d) U.S. Trustee Fees |
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(e) Professional Fee Claims |
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(f) Indenture Trustee Fees and Expenses |
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2. Priority Tax Claims |
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B. Allowance and Treatment of Classified Claims and Interests |
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1. Secured Claims (Class 1) |
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2. Priority Non ·Tax Claims (Class 2) |
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3. General Unsecured Claims (Classes 3A, 3B, 3C, 3D) |
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4. Class of Equity Interests (Class 4) |
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5. Class or Claims Subordinated Under 11 U.S.C. § 510(b) (Class 5) |
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III. EXECUTORY CONTRACTS AND UNEXPIRED LEASES |
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IV. MEANS OF EFFECTUATING THE SIGNATURE PLAN |
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A. Merger |
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B. Postconfirmation Business Operations of the Reorganized Debtor |
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1. Post ·Confirmation Business Plan for the Reorganized Debtor |
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C.
Management Agreement with Credit Partners Management, Inc. |
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D. The CP Management Team and the Reorganized Debtor’s Management Team |
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E. The Reorganized Debtor’s Board of Directors |
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F. Reporting Requirements |
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G. Amendment of Corporate Governance Documents to Authorize Certain
Transactions |
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H. Transfer Restrictions: the “Leucadia Provision” |
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I. Certain Insurance Policy Matters |
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J. Repurchase Claims Reserves |
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SIGNATURE
GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
i
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K. Retention of Jurisdiction |
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L. Cancellation and Treatment of Senior Notes and Junior Notes |
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V. CLAIMS: |
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A. Maintenance of Post-Confirmation Claims Register |
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B. Claim Objections |
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VI. SECURITIES RELATED MATTERS |
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A. Issuance of Securities |
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B. Registration Rights |
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C. Security Certificates |
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D. Investment Company Act Status |
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VII. DISBURSEMENTS |
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A. Manner of Distribution |
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B. Undeliverable Distributions |
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C. Rounding of Payments |
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D. Compliance with Tax Requirements |
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E. Distribution of Unclaimed Property |
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F. No De Minimis Distributions |
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G. Setoff |
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H. Distribution Record Date |
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I. Delivery and Surrender of Senior Notes |
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J. Delivery and Surrender of Junior Notes |
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K. Outside Effective Date Distributions Date |
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VIII. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN
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A. Conditions to Confirmation |
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B. Conditions to Effective Date |
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C. Waiver of Conditions |
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D. Outside Effective Date |
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IX. EFFECT OF CONFIRMATION OF PLAN |
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A. Discharge |
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B. Vesting of Property of the Estate |
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X. MISCELLANEOUS PROVISIONS |
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A. Modification of Plan |
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B. The Committees |
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C. Post-Confirmation Status Report |
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D. Post-Confirmation United States Trustee Fees |
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SIGNATURE
GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
ii
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Page(s) |
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E. Exemption From Securities Laws |
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52 |
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F. Exculpation |
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G. Governing Law |
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H. Notices |
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I. Payment
of the Signature Plan Proponents’ Expenses |
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J. ERISA Claims |
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K. New York State Teachers’ Retirement System Class Action |
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L. Final Decree |
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SIGNATURE
GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
iii
I.
DEFINITIONS AND RULES OF CONTRUCTION
A. Definitions
The following defined terms shall have the corresponding meaning anytime they appear as
capitalized terms in this Plan.
“1940 Act” means the Investment Company Act of 1940.
“Administrative Claim” means a claim for administrative costs or expenses that are allowable
under section 503(b) of the Bankruptcy Code or 28 U.S.C. § 1930. These costs or expenses may
include: (a) Non-Ordinary Course Administrative Claims; (b) Ordinary Course Administrative Claims;
(c) Professional Fee Claims; (d) Administrative Tax Claims; (e) U.S. Trustee Fees; and (f) the
Indenture Trustee Fees.
“Administrative Claims Bar Date” means thirty days after the Effective Date.
“Administrative Claims Objection Deadline” means sixty (60) days after the Administrative
Claims Bar Date.
“Administrative Claims Reserve” means the reserve that will be created by the Reorganized
Debtor on the Effective Date of the Plan in an amount sufficient to pay all Administrative Claims
outstanding as of and after the Effective Date in full.
“Administrative Claims Reserve Amount” means the estimate of the amount of Administrative
Claims the Debtor reasonably believes will be outstanding as of and after the Effective Date.
“Adviser’s Act” means the Investment Advisers Act of 1940.
“Affiliate” of any particular Person means any other Person controlling, controlled by or
under common control with such particular person or entity.
“Allowed Administrative Claim” means an Administrative Claim that is allowed by a Final
Order.
“Allowed,” “Allowed Claim” or “Allowed Equity Interest” means a Claim or Equity Interest,
other than an Administrative Claim, to the extent that:
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
3
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1. |
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Either: (1) a proof of claim or proof of interest was timely filed prior to the Claims
Bar Date; or (2) a proof of claim or proof of interest is deemed timely filed either
under Bankruptcy Rule 3003(b)(1)-(2) or by a Final Order; and |
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2. |
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Either: (1) the Claim or Equity Interest is not a Disputed Claim or a Disputed
Equity Interest; or (2) the Claim or Equity Interest is allowed either by a Final Order
or under the Plan. |
Any portion of a Claim that is satisfied or released during the Case is not an Allowed Claim.
“Allowed
Class ‘ ’ Claim” means an Allowed Claim classified in the specified Class.
“Allowed Amount” means the amount at which Claim is allowed.
“Anticipated Tax Refund” means a refund or refunds that may be paid to the Debtor and its
subsidiaries, or to the Reorganized Debtor, as a result of a carryback (including a carryback
pursuant to an election under Tax Code Section 172(b)(1)(H)) by the Debtor and/or its subsidiaries
of NOLs and alternative minimum tax NOLs incurred in recent years, including 2008 and/or 2009, the
amount of which may approximate $20 million, although the amount and timing of any such refund(s)
remain uncertain as of the date hereof.
“Assets” means all assets of the Debtor’s Estate including “property of the estate” as
described in section 541 of the Bankruptcy Code.
“Avoidance Action” means an adversary proceeding, lawsuit or other proceeding with respect to
Causes of Action arising under, relating to, or similar to sections 502(d), 506, 510, 542, 543,
544, 545, 547, 548, 549, 550, 551, 552 or 553 of the Bankruptcy Code, or any fraudulent conveyance,
fraudulent transfer or preference laws, or any Cause of Action arising under, or relating to, any
similar state law or federal law that constitutes property of the Estate under section 541 of the
Bankruptcy Code, whether or not an action is initiated on or before the Effective Date.
“Ballot” means the ballot to vote to accept or reject the Plan.
“Bankruptcy Code” or “Code” means title 11 of the United States Code, 11 U.S.C. §§ 101-1532,
as now in effect or hereafter amended.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
4
“Bankruptcy Court” or “Court” means the United States Bankruptcy Court for the Central
District of California, Santa Ana Division, or any other court that exercises competent
jurisdiction over the Case.
“Bankruptcy Rules” means, collectively, (a) the Federal Rules of Bankruptcy Procedure
promulgated under 28 U.S.C. § 2075, as amended from time to time; and (b) the Local Bankruptcy
Rules applicable to cases pending before the Bankruptcy Court, as now in effect or hereafter
amended.
“Board of Directors” means the board of directors of the Reorganized Debtor, the composition
of which is described in Section IV.E hereof.
“Business Day” means any day other than a Saturday, Sunday or a legal holiday (as the later
is defined in Bankruptcy Rule 9006(a)).
“Case” means the case under Chapter 11 of the Bankruptcy Code commenced by the Debtor and
bearing Case Number 8:08-bk-13421-ES.
“Cash” means cash or cash equivalents including, but not limited to, bank deposits, checks
or other similar items.
“Causes of Action” means any and all claims, demands, rights, actions, rights of action,
causes of action and suits of the Debtor or the Estate, of any kind or character whatsoever, known
or unknown, suspected or unsuspected, whether arising prior to, on or after the Petition Date, in
contract or in tort, at law or in equity or under any other theory of law, that the Debtor or the
Debtor’s Estate has or asserts or may have or assert against third parties, whether or not brought
as of the Effective Date, and which have not been settled or otherwise resolved by Final Order as
of the Effective Date, including but not limited to (1) rights of setoff, counterclaim or
recoupment, and claims on contracts or for breaches of duties imposed by law, (2) the right to
object to claims or interests, (3) such claims and defenses as fraud, mistake, duress and usury,
(4) Avoidance Actions, (5) claims for tax refunds (6) claims to recover outstanding accounts
receivable, (7) such claims and defenses as alter ego and substantive consolidation, and (8) any
other claims which may be asserted against third parties.
“Charging Lien” means any Lien or other priority in payment arising prior to the Effective
Date to which the Indenture Trustees are entitled under the Senior Notes Indenture and Junior Notes
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
5
Indenture, as applicable, against distributions to be made to the holders of Senior Notes Claims
and Junior Notes Claims, as applicable.
“Claim” means a claim, as the term “claim” is defined in section 101(5) of the Bankruptcy
Code, against the Debtor.
“Claims Bar Date” means (a) with respect to Claims other than those held by governmental
units, November 10, 2008, which was the last date for filing Claims against the Estate pursuant to
the Court’s Order entered on September 4, 2008; and (b) with respect to Claims held by
governmental units, December 15, 2008.
“Claims Objection Deadline” means the deadline for the Reorganized Debtor and parties in
interest to file objections to Claims as set forth in the Confirmation Order.
“Class”
means a group of Claims or Equity Interests as classified in
Section II(B).
“Collateral” means property, or an interest in property, of the Estate that is encumbered by
a Lien to secure payment or performance of a Claim.
“Common Stock” means the common stock of the Reorganized Debtor.
“Confirmation” means the entry of the Order by the Bankruptcy Court confirming the Plan
pursuant to section 1129 of the Bankruptcy Code.
“Confirmation Date” means the date on which the Bankruptcy Court enters the Confirmation
Order on its docket.
“Confirmation Hearing” means the hearing before the Court to consider the confirmation of the
Plan pursuant to section 1128(a) of the Bankruptcy Code, as such hearing may be continued from time
to time.
“Confirmation Hearing Date” means the first date on which the Bankruptcy Court holds the
Confirmation Hearing.
“Confirmation Order” means the order of the Bankruptcy Court confirming this Plan under
section 1129 of the Bankruptcy Code.
“CP Management” means Credit Partners Management, Inc.
“Creditor” means the Holder of a Claim against the Debtor.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
6
“Creditors Committee” means the Official Committee of Unsecured Creditors appointed in the
Case by the Office of the U.S. Trustee for the Central District of California.
“Debtor” means Fremont General Corporation, a Nevada corporation.
“DIP” means a debtor-in-possession loan.
“Disbursing Agent” means the Reorganized Debtor or its designee retained to make
Distributions pursuant to Section VII of the Plan.
“Disclosure Statement” means the disclosure statement relating to the Plan, including,
without limitation, all exhibits and schedules thereto, as approved by the Bankruptcy Court
pursuant to section 1125 of the Bankruptcy Code.
“Disclosure Statement Order” means the Order entered by the Bankruptcy Court approving the
Disclosure Statement.
“Disputed Claim” means any Claim: (a) as to which a proof of claim has been filed and the
dollar amount of such Claim, respectively, is not specified in a fixed amount; (b) prior to the
deadline to object to such Claim, as to which a proof of claim has been filed and the dollar
amount of such Claim is specified in a fixed liquidated amount, the extent to which the stated
amount of such Claim exceeds the amount of such Claim listed in the Schedules; (c) prior to the
deadline to object to such Claim, as to which a proof of claim has been filed and such Claim is
not included in the Schedules; (d) with respect to a proof of claim that is filed or is deemed
filed under Bankruptcy Rule 3003(b)(1) and is listed as contingent, disputed or unliquidated; (e)
as to which an objection has been filed or is deemed to have been filed pursuant to any order
approving procedures for objecting to Claims and such objection has neither been overruled nor
been denied by a Final Order and has not been withdrawn; or (f) with respect to an Administrative
Claim, as to which an objection; (1) has been timely filed (or the deadline for objection to such
Administrative Claim has not expired) and (2) has neither been overruled nor been denied by a
Final Order and has not been withdrawn; provided, however, that in each case, a Claim or
Administrative Claim shall not be deemed to be a Disputed Claim to the extent that the Reorganized
Debtor otherwise agrees with any such Claim or Administrative Claim, and such Claim or
Administrative Claim is Allowed under the Bankruptcy
Code or by Final Order, as applicable.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
7
“Disputed Equity Interest” means any Equity Interest, as to which (a) an objection has been
timely filed, which has neither been overruled nor been denied by a Final Order and has not been
withdrawn or (b) is the subject of a filed Cause of Action that is related to such Equity Interest
which has not been settled or otherwise resolved by Final Order.
“Distribution(s)” means any transfer under the Plan of Cash or other property or instruments
to a Holder of an Administrative Claim, a Holder of an Allowed Claim, or to the Holder of an
Equity Interest.
“Distribution Record Date” means the record date for determining entitlement to receive
distributions under the Plan on account of Allowed Claims, which date shall be for all Holders of
Claims, excluding the Claims in Class 3(C), the third Business Day following the Confirmation Date
at 5 p.m. prevailing Pacific time.
“DTC” means The Depository Trust Company.
“Effective Date” shall mean, subject to Article VIII.D of this Plan, the first Business Day
occurring ten (10) days after the conditions to effectiveness have been met.
“Equity Committee” means the Official Committee of Equity Security Holders appointed in the
Case by the Office of the U.S. Trustee for the Central District of California.
“Equity Interest” means the interest—as the term “interest” is defined in section 101(17) of
the Bankruptcy Code — of any entity who holds an equity security in the Debtor no matter how held,
including issued and outstanding shares of common stock, preferred stock, stock options, warrants,
membership interests, or other evidence of interests in securities of the Debtor; provided,
however, that in no event shall the TOPrS Claims be considered “Equity Interests.”
“Equity Interest Holder(s)” means the record Holder of an Equity Interest.
“Estate” means the estate created in the Case under section 541 of the Bankruptcy Code.
“FGCC” means Fremont General Credit Corporation, a California Corporation.
“FGFI Trust” means Fremont General Financing I, a statutory business trust, formed under
Delaware law pursuant to that certain “Amended and Restated Declaration of Trust” dated as of
March 6, 1996, for the sole purpose of issuing securities representing undivided beneficial
interests in
the FGFI Trust’s assets.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
8
“Final Order” means an order or judgment of the Court or other applicable court, as entered
on the applicable docket, that has not been reversed, stayed, modified or amended, and as to which
the time to appeal, petition for certiorari, or move for reargument or rehearing has expired and
as to which no appeal, petition for certiorari, or other proceedings for reargument or rehearing
shall then be pending or as to which any right to appeal, petition for certiorari, reargue, or
rehear shall have been waived in writing in form and substance satisfactory to the Debtor prior to
the Effective Date or to the Reorganized Debtor after the Effective Date, as applicable, or, in
the event that an appeal, writ of certiorari, or reargument or rehearing thereof has been sought,
such order or judgment of the Court or other applicable court shall have been affirmed by the
highest court to which such order or judgment was appealed, or certiorari has been denied, or from
which reargument or rehearing was sought, and the time to take any further appeal, petition for
certiorari or move for reargument or rehearing shall have expired.
“FRC” means Fremont Reorganizing Corporation f/k/a Fremont Investment & Loan, a corporation
organized under the laws of the state of California.
“General Unsecured Claim” or “Unsecured Claim” means any Claim that is not entitled to a
priority of repayment under the Bankruptcy Code and for which the Claim is not secured by any
collateral and expressly does not include any Administrative Claim, Priority Tax Claim, a Priority
Non-Tax Claim, Secured Claim, or a Section 510(b) Claim.
“Holder” means the Holder of a Claim against, or an Equity Interest in the Debtor.
“Impaired” means, when used with reference to a Claim or Equity Interest, a Claim or Equity
Interest that is impaired within the meaning of section 1124 of the Bankruptcy Code and the case
law interpreting the statute.
“Indenture Trustee” means any authorized indenture trustee for the Senior Notes or any duly
authorized indenture trustee for the Junior Notes or the Guaranty.
“Indenture Trustee Fees” means the reasonable compensation, fees and expenses,
disbursements and indemnity claims, including, without limitation, attorneys’ fees and agents’
fees,
expenses, costs and disbursements, incurred by or owed to the Indenture Trustee under the Senior
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
9
Notes Indenture or Junior Notes Indenture and related or ancillary documents, as applicable,
whether prior to or after the Petition Date and whether prior to or after consummation of the
Plan.
“Intercompany Claim” means any Claim (i) of FGCC against FRC or the Debtor, (ii) of FRC
against FGCC or the Debtor, and (iii) of the Debtor against FRC or FGCC.
“Junior Notes” means the 9% Junior Subordinated Debentures due March 31, 2026.
“Junior Notes Indenture” means the Indenture with respect to the 9% Junior Subordinated
Debentures among Fremont General Corporation, Fremont General Financing I and Bank of New York
(originated with First Interstate Bank of California), a New York Banking Corporation, as
trustee.
“Lien” means a lien, as defined in 11 U.S.C. § 101(37), except a lien that has been avoided
under Chapter 5 of the Bankruptcy Code or that is otherwise avoidable or invalid under the
Bankruptcy Code or applicable law.
“Local Bankruptcy Rules” means the Local Bankruptcy Rules for the United States Bankruptcy
Court for the Central District of California, as now in effect or hereafter amended.
“Non-Ordinary Course Administrative Claim” means any Administrative Claim other than an
Ordinary Course Administrative Claim, Professional Fee Claim, Indenture Trustee Fees or U.S.
Trustee Fees.
“Management Agreement” means an investment advisory agreement pursuant to which CP
Management will provide investment advisory services to the Reorganized Debtor.
“Manager” shall mean Credit Partners Management, Inc.
“New Note(s)” means the new notes in the principal amount of $39 million to be issued under
the Plan to Holders of TOPrS, and have such terms as fully set forth in the form of Indenture and
New Note attached to this Plan.
“New Note Indenture” means that Indenture to be entered into by the Reorganized Debtor and
Wells Fargo, N.A., as Indenture Trustee, in the form attached to this Plan.
“New World Disclosure Statement” means the New World Acquisition, LLC Amended
Disclosure Statement With Respect To Amended Chapter 11 Plan of Reorganization For Fremont
General Corporation (Dated January 19, 2010), including, without limitation, all exhibits and
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
10
schedules thereto, as approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy
Code.
“Ordinary Course Administrative Claim” means a claim for administrative costs or expenses
that are allowable under section 503(b) of the Bankruptcy Code that are incurred in the ordinary
course of the Debtor’s operations for goods and services and that are unpaid on the Effective Date
or on account of an expense by a governmental unit under sections 503(b)(1)(B) or (C) of
Bankruptcy Code. Ordinary Course Administrative Claims do not include Professional Fee Claims,
U.S. Trustee Fees or Non-Ordinary Course Administrative Claims.
“Person” means any natural person or entity.
“Petition Date” means June 18, 2008, the date on which the Debtor filed its voluntary
petition commencing the Case.
“Plan” means this plan of reorganization under Chapter 11 of the Bankruptcy Code, including,
without limitation, all exhibits, supplements, appendices, and schedules hereto, either in its
present form or as it may be altered, amended, or modified from time to time, also referred to
herein and in the Disclosure Statement as the “Signature Plan.”
“Post Petition Interest” means interest that shall have accrued on account of the applicable
Holder’s Allowed Claim for the period from the Petition Date to and through the date in which such
Allowed Claim is paid in full.
“Post Petition Interest Rate” means 2.51% (compounded annually), which reflects the federal
judgment rate of interest set forth in 28 U.S.C. §1961(a) in effect on the Petition Date.
“Post-Effective Date Merger Claims” means any and all unpaid claims, liabilities for
obligations which immediately, prior to the occurrence of the Effective Date, were claims,
liabilities or obligations of FGCC and/or FRC.
“Priority Non-Tax Claims” means Claims, other than Administrative Claims or Priority Tax
Claims, entitled to priority in right of payment under section 507(a) of the Bankruptcy Code.
“Priority Tax Claim” means a Claim that a governmental unit asserts against the Debtor for
taxes or related interest or penalties, which Claim is entitled to priority and allowable under
section 507(a)(8) of the Bankruptcy Code.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
11
“Professionals” means those Persons (i) retained pursuant to an order of the Bankruptcy Court
in accordance with sections 327, 1103 and/or 1106 of the Bankruptcy Code and to be compensated for
services rendered prior to the Effective Date pursuant to sections 327, 328, 329, 330 and/or 331
of the Bankruptcy Code; or (ii) for which compensation and reimbursement has been allowed by the
Bankruptcy Court pursuant to sections 330 and 503(b)(2) of the Bankruptcy Code.
“Professional Fee Claim” means: (a) A claim under sections 327, 328, 330, 331, 503(b), 1103
or 1106 of the Bankruptcy Code for compensation for professional services rendered or expenses
incurred prior to the Effective Date on the Estate’s behalf; or (b) A claim either under section
503(b)(4) of the Bankruptcy Code for compensation for professional services rendered or under
section 503(b)(3)(D) of the Bankruptcy Code for expenses incurred prior to the Effective Date in
making a substantial contribution to the Estate.
“Registration Rights Agreement” means a registration rights agreement substantially in the
form set forth in Exhibit 1 obligating the Reorganized Debtor to register for resale
certain shares of common stock under the Securities Act of 1933 in accordance with the terms set
forth in such registration rights agreement.
“Remaining Executives” means Don Royer, Richard Sanchez and Thea Stuedli.
“Reorganized Debtor” means the Debtor, from and after the Effective Date.
“Repurchase Claims” claims arising from loans FRC is required to repurchase if certain
defaults under such loans occurred within a designated period after the sale of such loans.
“Rights Of Action” means any and all actions, causes of action, suits, accounts,
controversies, agreements, promises, rights to legal remedies, rights to equitable remedies,
rights to payment and claims, whether known, unknown, reduced to judgment, not reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured and whether asserted or assertable directly or derivatively, in law, equity
or otherwise, and whether commenced or arising before or after the Effective Date.
“Schedules” means the schedules of Assets and Liabilities filed by the Debtor on July 3,
2008, as amended, and as may be further amended.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
12
“Schedule of Assumed Agreements” means the schedule of executory contracts and unexpired
leases that the Reorganized Debtor will assume on the Effective Date and the amounts, if any,
necessary to cure any defaults under such executory contracts and unexpired leases.
“Section 510(b) Claim” means any Claim for rescission of or damages arising from the
purchase or sale of a debt or equity security, including, without limitation, any Claims arising
from equity forward agreements and other understandings to purchase Equity Interests, which Claim
is subject to subordination in accordance with section 510(b) of the Bankruptcy Code. For the
avoidance of doubt, “Section 510(b) Claim” shall include any claim against the Estate for
reimbursement or contribution on account of a Section 510(b) Claim.
“Secured Claim” means a Claim that was secured by a Lien on Collateral as of the Petition
Date. A Claim is a Secured Claim only to the extent of the value of the claimholder’s interest in
the Collateral or to the extent of the amount subject to setoff, whichever is applicable, and as
determined under 11 U.S.C. § 506(a).
“Securities” means the Common Stock, together with any other equity securities of the
Reorganized Debtor.
“Senior Notes” means the 7.875% Senior Notes due 2009, which were issued pursuant to that
certain indenture dated March 1, 1999, by and between The Bank of New York, as Trustee and the
Fremont General Corporation.
“Senior Notes Indenture” means the Indenture dated as of March 1, 1999, by and between
Fremont General Corporation and the First National Bank of Chicago, as Indenture Trustee.
“Signature Investors” includes Signature Group Holdings, LLC, Craig Noell, Kyle Ross, Thomas
Donatelli, Kenneth Grossman, and their respective Affiliates.
“Subordinated Debenture” means that certain 9% Junior Subordinated Debenture due March 31,
2026, which was issued pursuant to that certain indenture dated March 6, 1996, and which is the
sole asset of the FGFI Trust.
“Subscription Agreement” means the agreement(s) between the Reorganized Debtor and the
Signature Investors or their respective Affiliate(s), pursuant to which the Signature Investors
or their
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
13
respective Affiliate(s) will subscribe to purchase shares of Common Stock of the Reorganized
Debtor on the Effective Date.
“Tax Code” means the Internal Revenue Code of 1986, as amended.
“TOPrS” means the 9% Trust Originated Preferred Securities issued to the FGFI Trust pursuant
to the Fremont General Financing Declaration of Trust.
“TOPrS Group” means, collectively, Seth Hamot, RRH Capital, LLC, Costa Brava Partners III,
L.P. and Howard Amster, who individually or with their affiliates are Holders of significant TOPrS
Claims.
“Unclassified Claim” means any Claim which is not part of any Class.
“Unimpaired” means, when used with reference to a Claim or Equity Interest, a Claim or Equity
Interest that is not Impaired within the meaning of section 1124 of the Bankruptcy Code and the
case law interpreting the statute.
“Unrestricted Cash” means Cash in excess of (i) Cash needed to make all of the required
payments with respect to Allowed Claims which the Reorganized Debtor is obligated to make pursuant
to the Plan and (ii) Cash sufficient to fund the reserves that are required to be established by
the Reorganized Debtor pursuant to the Plan or under any Indenture as of the Effective Date.
“U.S. Bank” means U.S. Bank National Association.
“U.S. Trustee” means the Office of the United States Trustee for the Central District of
California.
“U.S. Trustee Fees” means all fees and charges assessed against the Estate by the U.S.
Trustee and due pursuant to section 1930 of Title 28 of the United States Code.
“Warrants” means the warrants to purchase shares of the Reorganized Debtor’s Common Stock
issued to the Signature Investors on the Effective Date.
“Warrant Agreement” means the agreement, substantially in the form annexed hereto as
Exhibit 2, governing the terms and conditions of the Warrant.
“Wells Fargo” means Wells Fargo Bank, National Association.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
14
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(a) |
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The rules of interpretation set forth in section 102 of
the Bankruptcy Code apply to this Plan. |
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(b) |
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Except as otherwise provided in this Plan, in computing any
period of time prescribed or allowed by this Plan, the provisions of
Bankruptcy Rule 9006 shall apply. |
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(c) |
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The definition given to any term or provision in the Plan
supersedes and controls any different meaning that may be given to that term or
provision in the Disclosure Statement. |
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(d) |
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Any term used in the Plan that is not defined herein, but that is
used in the Bankruptcy Code or the Bankruptcy Rules (as defined below), shall
have the meaning assigned to that term in the Bankruptcy Code or the Bankruptcy
Rules, as the case may be. |
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(e) |
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Whenever the context requires, such terms shall include the
plural as well as the singular number. |
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(f) |
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Any reference in this Plan to an existing document or exhibit
filed or to be filed means such document or exhibit, as it may have been or may
be amended, modified or supplemented |
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(g) |
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Any reference to a document or instrument being in a particular
form or on particular terms means that the document or instrument will be
substantially in that form or on those terms or as amended by the terms thereof. |
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(h) |
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Unless otherwise indicated, the phrase “under the Plan” and
similar words or phrases refer to this Plan in its entirety rather than to only
a portion of the Plan. |
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(i) |
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Unless otherwise specified, all references in this Plan to
Articles, Sections, Schedules and Exhibits are references to Articles,
Sections, Schedules and Exhibits of or to this Plan. |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
15
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(j) |
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Captions and headings to Articles and Sections are inserted for
convenience of reference only and are not intended to be a part of or to
affect the interpretation of this Plan. |
II.
CLASSIFICATION AND TREATMENT
The treatment of Allowed Claims and Allowed Equity Interests under this Plan supersedes any
agreements or rights the Holders of those Claims or Equity Interests may have in or against the
Debtor or its Assets and is in full satisfaction of the legal, equitable, and contractual rights
of the Holders of the Claims or Equity Interests. Unless provided otherwise herein, no
Distributions will be made and no rights retained on account of any Claim or Equity Interest that
has not become an Allowed Claim or Allowed Equity Interest.
As required by the Bankruptcy Code, this Plan classifies Claims and Equity Interests in
various classes according to their right to priority. This Plan sets forth whether each Class of
Claims or Equity Interests is Impaired and provides for the treatment that each Class will
receive.
A. Allowance and Treatment of Unclassified Claims
The following Unclassified Claims are considered unimpaired, not placed into voting classes
and shall receive treatment in accordance with the Bankruptcy Code:
1. Administrative Claims
Administrative Claims consist of costs and expenses of administering the Case that are
Allowed under section 503(b) of the Bankruptcy Code or 28 U.S.C. § 1930, and include Claims
incurred post-petition in the ordinary course of the Debtor’s business, fees and expenses of
professionals, and fees due to the U.S. Trustee’s Office.
Unpaid Administrative Claims shall receive the following treatment:
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Description |
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Treatment |
Ordinary Course Administrative Claims
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Unless the Reorganized Debtor
objects to an Ordinary Course
Administrative Claim, the Claim will
be allowed in accordance with the
terms and conditions that gave rise
to the Ordinary Course
Administrative Claim, and the person
holding the Ordinary Course |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
16
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Description |
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Treatment |
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Administrative Claim need not file any request for payment of its claim. |
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Clerk’s Office Fees
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Paid in full before the Effective Date. |
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Office of U.S. Trustee
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Paid in full pursuant to 28 U.S.C. § 1930. |
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Allowed Non-Ordinary
Course Administrative
Claims, Professional
Fee Claims and
Indenture Trustee
Fees
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Paid in full on the later of: (1) the Effective Date; or (2) the
fifteenth Business Day after such Non-Ordinary Course Administrative
Claim or Professional Fee Claim becomes an Allowed Administrative Claim
or Allowed Professional Fee Claim, or in either case, as soon
thereafter as is practicable. The Indenture Trustee Fee Claims will be
paid in accordance with the terms of this Plan. |
(a) Administrative Claim Reserve
Within ten (10) Business Days after the Confirmation Date, the Debtor shall inform Signature
of the Administrative Claims Reserve Amount. On the Effective Date, the Reorganized Debtor shall
fund the Administrative Claims Reserve with cash in an amount equal to the Administrative Claims
Reserve Amount.
Ordinary Course Administrative Claims will be paid in the ordinary course of the Reorganized
Debtor’s operations. Distributions will be made to the Holders of Allowed Administrative Claims
from the Administrative Claims Reserve. Any amounts remaining in the Administrative Claims Reserve
after payment in full of all Allowed Administrative Claims will revert to the Reorganized Debtor.
(b) Administrative Claims Bar Date
All requests for payment of an Administrative Claim that accrued from the Petition Date,
except for (1) Ordinary Course Administrative Claims, (2) Clerk’s Office and U.S. Trustee fees,
(3) Professional Fee Claims, and (4) Indenture Trustee Fees must be filed with the Court no later
than the Administrative Claims Bar Date or be forever barred.
(c) Deadline for Objections to Administrative Claims
All objections to allowance of Administrative Claims, excluding Professional Fee Claims, must
be filed by any parties in interest no later than the Administrative Claims Objection Deadline.
The Administrative Claims Objection Deadline may be extended for a one-time sixty (60) day period
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
17
by the Reorganized Debtor by filing a notice of the extended Administrative Claim Objection
Deadline with the Bankruptcy Court.
Thereafter, it may only be extended by an order of the Bankruptcy Court. If no objection to
an Administrative Claim is filed on or before the Administrative Claim Objection Deadline, then
the Administrative Claim will be deemed Allowed as of that date.
(d) U.S. Trustee Fees
Quarterly fees owed to the Office of the U.S. Trustee will be paid prior to the Effective
Date by the Debtor, and after the Effective Date by the Reorganized Debtor, when due in accordance
with applicable law. The Reorganized Debtor will continue to file reports showing the calculation
of such fees until the Case is closed under section 350 of the Bankruptcy Code.
(e) Professional Fee Claims
Unless otherwise expressly provided in the Plan, a Professional Fee Claim will be Allowed
only if: (i) on or before thirty (30) days after the Effective Date, the entity holding such
Professional Fee Claim both Files with the Court a final fee application or a motion requesting
Allowance of the fees and serves the application or motion on the Reorganized Debtor and the U.S.
Trustee; and (ii) the Court allows the Claim by an order of the Bankruptcy Court (as to which
fourteen (14) days have passed without a stay of the enforcement of such order or, if a stay has
been granted, such stay has lapsed or been dissolved). Subject to the Indenture Trustees providing
invoices to Signature, which shall be subject only to Signature’s review for reasonableness under
the applicable Indenture, the Reorganized Debtor shall pay or cause to be paid in full and in cash
as an Administrative Claim, without the need for application to, or approval of, any court,
without reduction to the recovery of applicable holders of allowed claims, any and all Indenture
Trustee Fees and other amounts that are due to each of the Indenture Trustees and their respective
Professionals as of the Effective Date on or before the Effective Date. If Signature disputes any
portion of the fees and expenses sought by the Indenture Trustees, the Reorganized Debtor shall
pay that undisputed portion of the requested fees and costs within ten (10) days of receipt of the
invoices from the Indenture Trustee and the Indenture Trustee shall have the right to seek a
determination by the Court of that disputed portion of the fees
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
18
and costs as reasonable under the applicable Indenture or assert its Charging Lien to pay such
disputed amounts.
Any party in interest may file an objection to such an application within the time provided
by the Local Bankruptcy Rules or within any other period that the Court sets. Professionals
holding Professional Fee Claims who do not timely file and serve their applications for payment
will be forever barred from asserting these Claims against the Reorganized Debtor or its property.
The Disbursing Agent will pay or cause to be paid an Allowed Professional Fee Claim, in
Cash, within five (5) days after the date on which the condition specified in the preceding
subparagraph (ii) of this Section II.A.l.e is satisfied.
(f) Indenture Trustee Fees and Expenses
The Reorganized Debtor shall pay or cause to be paid in full and in Cash as an Administrative
Claim, without the need for application to, or approval of, any court, without reduction to the
recovery of applicable holders of allowed claims, any and all Indenture Trustee Fees and other
amounts that are due to each of the Indenture Trustees and its counsel as of the Effective Date on
or before the Effective Date. The Reorganized Debtor shall also promptly pay or cause to be paid
in full any and all fees and expenses that will be incurred in connection with or related to the
distributions to be made by the Indenture Trustees under this Plan, implementation of the terms of
the Plan or fulfilling its obligations under the Junior Note Indenture or this Plan without
further court approval.
2. Priority Tax Claims
Section 507(a)(8) of the Bankruptcy Code Priority Tax Claims shall receive the following
treatment:
|
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Description |
|
Treatment |
Priority Tax Claims
Arising Under 11
U.S.C. § 507 (a)(8).
|
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Except to the extent that a Holder of an Allowed Priority Tax Claim has been paid by the
Debtor prior to the Effective Date, agrees to different treatment or its Claim is the subject of
Final Order of the Bankruptcy Court, each Holder of an Allowed Priority Tax Claim shall
receive, in full satisfaction of its Claim, Cash in an amount equal to such Allowed Priority Tax
Claim on the later of (1) the Effective Date, or (2) the fifteenth Business Day after the Priority
Tax Claim becomes an Allowed Priority Tax Claim, or in either case, as soon thereafter as is
practicable. The Debtor or Reorganized Debtor, as the case may be, reserves the right to pay
any Allowed Priority Tax Claim in equal quarterly payments over a period of five years from
the date of the entry of the Order for relief with interest at the applicable rate under non- |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
19
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Description |
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Treatment |
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bankruptcy law.
For the avoidance of any doubt, in the event the Allowed Priority
Tax Claim of the California Franchise Tax Board (the “FTB”) has
not been paid in full on the Effective Date, the FTB shall be
entitled to interest on its Allowed Priority Tax Claim at a rate
determined under applicable nonbankruptcy law as provided for in
section 511 of the Bankruptcy Code for the period of time from the
Effective Date to and through the date its Allowed Priority Tax
Claim is paid in full. |
B. Allowance and Treatment of Classified
Claims and Interests
1. Secured Claims (Class 1)
Allowed Secured Claims, if any, shall receive the following treatment:
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Class |
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Description |
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Impaired |
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Treatment |
1
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Allowed Secured Claims
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No
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Except to the extent that
a Holder of an Allowed
Claims Priority Non-Tax
Claim agrees to other
treatment, each Allowed
Priority Non-Tax Claim
will be paid in full
satisfaction of the
Priority Non-Tax Claim
from funds available to
the Reorganized Debtor on
the later of (1) the
Effective Date or (2) the
fifteenth Business Day
after such date that the
Claim becomes an Allowed
Priority Non-Tax Claim or,
in either case, as soon
thereafter as is
practicable. |
2. Priority Non-Tax Claims (Class 2)
Section 507(a) of the Bankruptcy Code Priority Non-Tax Claims shall receive the following
treatment:
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Class |
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Description |
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Impaired |
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Treatment |
2
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Priority Non-Tax Claims
Arising Under 11 U.S.C.
§507 (a) Other Than Tax
Claims Arising Under U.S.C.
§ 507(a)(8).
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No
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Except to the extent that a Holder of an Allowed Claims
Priority Non-Tax Claim agrees to other treatment, each
Allowed Priority Non-Tax Claim will be paid in full
satisfaction of the Priority Non-Tax Claim from funds
available to the Reorganized Debtor on the later of
(1) the Effective Date, or (2) the fifteenth Business
Day after such date that the Claim becomes an Allowed
Priority Non-Tax Claim or,
in either case, as soon
thereafter as
practicable. |
3. General Unsecured Claims (Classes 3A, 3B, 3C, 3D)
General Unsecured Claims shall receive the following treatment by sub-Class:
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
20
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Class
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Description
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Impaired
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Treatment |
3A
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General Unsecured Claims
(excluding the TOPrS Claims,
and the $176,402,106.56 of
Claims represented by the
7.875% Senior Notes due 2009)
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No
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Except as provided below with respect to the Holder of an
Allowed General Unsecured Claim pursuant to any
settlement, compromise, stipulation or order which provides
for different treatment, whether in terms of maturity,
amortization, interest rate and/or entitlement to interest
(prepetition or postpetition) or otherwise, the Holder of
an Allowed Class 3A General Unsecured Claim shall retain
their legal, equitable, and contractual rights and shall
be paid in full on the later of the Effective Date of the
Signature Plan or within fifteen business days of becoming
an Allowed Class 3A General Unsecured Claim or, in either
case, as soon thereafter as is practicable, with Post
Petition Interest at the Post Petition Interest Rate
(2.51%). |
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The Holder of an Allowed General Unsecured Claim pursuant
to the Rampino Stipulation, the Enron Stipulation, the BNY
Stipulation or any other settlement, compromise,
stipulation or order which provides for different
treatment shall be paid in accordance with the underlying
compromise, settlement, stipulation or order giving rising
to the Allowed Claim, and if no payment date is specified
on the later of the Effective Date of the Signature Plan
or within fifteen business days of becoming an Allowed
Class 3A General Unsecured Claim or, in either case, as
soon thereafter as is practicable, with Post Petition
Interest, unless the Allowed Class 3A General Unsecured
Claims has been otherwise capped, at the Post Petition
Interest Rate (2.51%). |
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3B
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General Unsecured Claims of
the Holders and of the 7.875%
Senior Notes $176,402,106.56
(prepetition)
|
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Yes
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Class 3B shall have Allowed General Unsecured Claims in
the aggregate amount of $176,402,106.56, which amount
includes $166,530,000 in principal and $9,872,106.56 in
accrued but unpaid interest as of the Petition Date at the
applicable rates specified in the Senior Notes Indenture
and related documents, as well as other fees and costs
associated therewith, and shall not be subject to
objection, challenge, deduction, offset, avoidance,
setoff, recharacterization, subordination (whether
equitable, contractual, or otherwise), counterclaim,
cross-claim, defense, or disallowance under applicable
law. |
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The Holders of Allowed Class 3B General Unsecured Claims
will be paid their principal in full on the Effective
Date. |
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If Class 3B votes as a class to accept the Signature Plan,
which shall operate as binding settlement of the dispute
regarding the amount of post petition interest Holders of
Allowed Class 3B Claims are entitled to receive, interest
claims shall be paid on the Effective Date as follows: |
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• Pre-petition accrued interest shall be paid in cash
at the full contract rate of 7.875%. |
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• On account of accrued post petition interest, the
sum of (i) the Post Petition Interest at the Post
Petition Interest Rate and (ii) an additional $1.5
million shared by Class 3B on a pro-rata basis. |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
21
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Class
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Description
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Impaired
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Treatment |
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In the event Class 3B votes to accept the Plan but the Court
makes a determination that the payment of post petition
interest on account of Class 3B Claims in excess of the Post
Petition Interest Rate renders the Plan un-confirmable,
Class 3B shall be deemed to have rejected the Plan and the
Plan can only be confirmed as to Class 3B if the treatment
of Class 3B satisfies the cram-down confirmation standards
under section 1129(b) of the Bankruptcy Code. |
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If Class 3B votes as a class to reject the Signature Plan,
interest claims shall be paid on the Effective Date as
follows: |
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• Pre-petition accrued interest will be paid in cash at
the full contract rate of 7.875%. |
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• Accrued Post Petition Interest at the Post Petition
Interest Rate. |
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3C
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TOPrS Claims $107,422,680.93
(prepetition)
|
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Yes
|
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Class 3C shall have Allowed General Unsecured Claims in
the aggregate amount of $107,422,680.93, consisting of: (a)
$103,092,784 in the principal amount issued pursuant to the
Junior Notes Indenture and related documents and (b)
$4,329,896.93 in accrued but unpaid interest as of the
Petition Date at the applicable rates specified in the
Junior Notes Indenture and related documents, as well as
other fees and costs associated therewith, and shall not be
subject to objection, challenge, deduction, offset,
avoidance, setoff, recharacterization, subordination
(whether equitable, contractual, or otherwise),
counterclaim, cross-claim, defense, or disallowance under
applicable law. The TOPrS would receive the following in
settlement of their existing Claims: |
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• $45 million in cash to be paid upon the earlier of
(i) the Effective Date if, after giving effect to the
payment to the TOPrS the Unrestricted Cash of the
Reorganized Debtor would equal or exceed $20 million; (ii)
within 45 days following the receipt of the Anticipated Tax
Refund; (iii) one hundred and twenty days (120) after the
Effective Date or (iv) a date determined by the Board of
Directors of the Reorganized Debtor. So long as the cash
payment has not been made, the Reorganized Debtor shall not
use, transfer, convey, encumber or hypothecate the
Anticipated Tax Refund. |
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• $39 million in new note(s) bearing 9% annual
interest, payable quarterly commencing one quarter after
the Effective Date and continuing quarterly thereafter,
with a final maturity on December 31, 2016, in
substantially the form attached as Exhibit 4 to this Plan
and to be issued under the New Notes Indenture. |
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• 21 million shares of Common Stock. |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
22
Nothing contained in this Plan shall be deemed to modify, impair, terminate, or otherwise
disturb in any way the provisions of section 510(a) of the Bankruptcy Code or the subordination
provisions in any applicable agreement, and all such rights are expressly preserved under this
Plan.
4. Class of Equity Interests (Class 4)
Equity Interest Holders shall receive the following Treatment:
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Class |
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Description |
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Impaired |
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Treatment |
4
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Equity Interests
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Yes
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Holders of existing Equity Interests in the
Debtor will retain their Equity Interests in the
Reorganized Debtor in full and final satisfaction
of their Equity Interests, subject to dilution
for the issuance of securities to the TOPrS Group
and the Signature Investors on the Effective Date
in connection with the Plan, and the Common Stock
which may be issued to the Holders of Allowed
Class 5 Claims, if any. |
5. Class or Claims Subordinated Under 11 U.S.C. § 510(b) (Class 5)
Section 510(b) Claims, if any, shall receive the following treatment:
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5
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Section 510(b) Claims
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No
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The Holders of Allowed Section 510(b) Claims
will receive newly-issued interests in the
Reorganized Debtor in full and final
satisfaction of their Allowed
Section 510(b)
Claims. The percentage interest of common
stock to which such Holders will be entitled
shall be based upon the average trading
value of the common stock of the shares of
the Reorganized Debtor for the thirty days
preceding the date on which any Section
510(b) Claims become Allowed Section 510(b)
Claims if such allowance occurs after the
Effective Date. If the Court determines in a
Final Order that the Allowed Class 5 Claim
is not subject to subordination under 11
U.S.C. § 510(b), then the Holder of the
Allowed Class 5 Claim will receive the same
treatment as Holders of Claims in the
appropriate Class of Unsecured Claims or
Equity Interests. |
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Certain of the Section 510(b) Claims may be
satisfied by insurance coverage. |
III.
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
Effective upon the Effective Date, the Debtor will reject all executory contracts and unexpired
leases between the Debtor and any other party that have not previously been rejected, other than
the
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
23
Executive Employment Agreements, certain insurance contracts and those executory contracts and
unexpired leases which are listed on the final Schedule of Assumed Agreements to be filed
twenty-one (21) days before the Confirmation Hearing Date with the Bankruptcy Court of executory
contracts and unexpired leases to be assumed under this Plan on the Effective Date. That schedule
will list the amount of the proposed cure payment required by 11 U.S.C. § 365(b)(1). A copy of the
schedule and notice of the objection deadline will be served on the contract parties.
Any party that objects to the assumption of its executory contract or unexpired lease by the
Debtor or to the proposed cure payment must file with the Court and serve on interested parties a
written objection with supporting evidence that states the basis for the objection. This objection
must be filed with the Court and served no later than ten (10) days before the Confirmation
Hearing. Any entity that fails to timely file and serve an opposition will be deemed to have waived
any and all objections to the proposed assumption or the amount of the proposed cure payment. In
the absence of a timely objection by such a party, the Confirmation Order shall constitute a final
determination of the amount of the cure payment and that the Reorganized Debtor has shown adequate
assurances of its future performance.
In the event of a dispute regarding the cure payment, adequate assurances, or some other
matter related to assumption, the cure payment required by 11 U.S.C. § 365(b)(1) shall not be made
until after entry of a Final Order resolving the dispute and approving the assumption. Pending the
entry of a Final Order, the executory contract or unexpired lease at issue will be deemed assumed
by the Reorganized Debtor unless otherwise ordered by the Court. Upon payment of the cure amount
required by 11 U.S.C. § 365(b)(1), any prepetition or postpetition arrearage or other Claim
asserted in a Filed proof of Claim or listed in the Schedules shall be deemed satisfied in full and
the Claim shall be deemed disallowed, without further order of the Court or action by any party.
All Allowed Claims arising from the rejection of executory contracts or unexpired leases
will be treated as Class 3A General Unsecured Claims, and a proof of claim must be filed with
the Bankruptcy Court and served on the Reorganized Debtor within thirty days of the Effective
Date of this Plan or be forever barred and unenforceable against the Debtor, the Reorganized
Debtor, or their property.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
24
IV.
MEANS OF EFFECTUATING THE SIGNATURE PLAN
A. Merger
On the Effective Date, and effective contemporaneously with the occurrence of the Effective
Date, FGCC will first be merged into the Debtor or the Reorganized Debtor (as applicable), and
then FRC will be merged into the Debtor or the Reorganized Debtor (as applicable), with the
resulting merged entity surviving as the Reorganized Debtor (the “Merger”). The Reorganized
Debtor will thereafter continue to operate its business in the ordinary course without the
supervision or oversight of the Bankruptcy Court.
As a result of the Merger, the assets of the Debtor, FGCC and FRC will become assets of the
Reorganized Debtor and any existing liabilities of FGCC and FRC that are unsatisfied as of the date
of the Merger, any guarantees by FGCC or FRC of any obligations of the Debtor and any joint and
several liabilities of the Debtor, FGCC and/or FRC will become obligations of the Reorganized
Debtor. The liabilities of FGCC and FRC constitute Post-Effective Date Merger Claims that will
satisfied by the Reorganized Debtor in the ordinary course of business in accordance with
applicable non-bankruptcy law; those liabilities are not classified or treated as Claims under this
Plan. The equity securities of FGCC and FRC will also be cancelled and all Intercompany Claims
between the Debtor, FGCC and FRC will be eliminated.
The decisions of the Reorganized Debtor, including the timing and amounts of distributions to
creditors, will be made by an external manager and a single Board of Directors.
The Signature Investors will invest $10 million in cash on the Effective Date, and receive for
this investment 12,500,000 shares of Common Stock at $.80 per share.
In addition, the Signature Investors will pay up to an aggregate of $300,000 to acquire
Warrants to purchase 15 million shares of Common Stock at an exercise price of $1.03 per share.
The Warrants will vest as to 20% on the Effective Date, and 20% in annual installments thereafter
until the Warrants are fully vested on the fourth anniversary of the Effective Date. Assuming the
Warrants are exercised for cash, the Warrants represent an additional potential future equity
infusion to the
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
25
Reorganized Debtor of $15.75 million, including an aggregate purchase price of $300,000 and an
aggregate exercise price of $15,450,000 paid for the Warrants. The purchase price shall be payable
by the Signature Investors as the Warrant shares vest, with $60,000 payable on the Effective Date
and $60,000 payable on each subsequent vesting installment.
B. Postconfirmation Business Operations of the Reorganized Debtor
1. Post-Confirmation Business Plan for the Reorganized Debtor
The Reorganized Debtor shall utilize the asset base of the current Fremont estate in all
commercially reasonable ways for the creation of a broad based, high growth, and solidly profitable
licensed commercial finance platform oriented toward originating special situations financing in
what is commonly referred to as the “middle market.” For purposes of this Plan, the term “middle
market” refers to corporate entities which generate annual gross sales in the range of $10 million
to $500 million.
The Reorganized Debtor’s proposed management team (including its board Chairman) shall be made
up of a highly experienced and seasoned group of financial professionals who have operated very
successfully within this market segment for decades. The assets underlying the portfolio in this
Plan are not securities; they are loans sourced through the Signature team’s proprietary network,
individually structured based on the unique circumstances of the individual situation, subjected to
appropriate due diligence and documented through the collective efforts of the Signature team,
drawing on the significant breadth of experience of Signature and its team.
The Reorganized Debtor’s proposed management team shall use commercially reasonable efforts to
leverage its expertise in this market by reformulating Fremont General into a well-capitalized and
profitable finance company serving this large and attractive market in the following areas:
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Commercial Finance – Financings collateralized by assets typically for
businesses in transition. The loans are expected to cover a broad cross section of
industries, including without limitation, industrial, retail, franchise food,
leasing and transportation, media and entertainment |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
26
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Portfolio Acquisitions – Opportunistic purchases of senior secured bank loans either
as a whole portfolio or as “carved out” from large bank owned portfolios at meaningful
discounts to face value. Frequently, acquired portfolios may be focused on specialized
industries such as technology, retail, media, restaurants, casino, hospitality,
healthcare, agriculture and lead to further opportunities over the long term,
particularly when they come with talented management. |
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Individual Loan Purchases – The Reorganized Debtor shall continue to be
actively involved in purchasing sub performing and distressed loans from financial
institutions. As an example, Signature recently acquired the debt of the largest
domestic operator of auto racing schools from a top 5 financial institution.
Although the business is very sensitive to, and, therefore, reeling from the current
economic environment, management has aggressively reduced its cost base and
shareholders have supported it through additional capital injections. Signature is
currently negotiating with management regarding the terms for extending one of the
facilities which would otherwise mature in December. |
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Equity Investments – In the right circumstances, the Reorganized Debtor
may acquire controlling interests in operating companies, including through
purchasing senior debt of companies to be later converted into equity, or through
outright purchases of controlling equity interests. |
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Distressed Situations – The Company will also pursue opportunistic
corporate financings for asset-rich companies requiring near-term liquidity
including, without limitation, bridge loans, transition financing,
debtor-in-possession loans (“DIPs”), senior secured bank debt, bonds in liquidation
and trade claims in anticipation of a recapitalization or other clearly defined
event. By way of example, Signature recently provided a structured lending solution
for the Fatburger franchisor that included both DIP financing to subsidiaries
reorganizing in Chapter 11 and traditional financing to the parent franchisor who
does not anticipate a bankruptcy filing. |
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Specialty Lending Niches – The Reorganized Debtor may identify specific market |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
27
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niches (technology, retail, media, restaurants, casino, hospitality, healthcare,
agriculture) that are underserved and present excellent risk/reward business opportunities. These
may be identified as a result of portfolio acquisitions (see above) or through other activities
the Reorganized Debtor. The Reorganized Debtor anticipates that it will be contacted by
management teams seeking a new platform to put their expertise to
work. |
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Good Bank/Bad Bank Transactions – As widely reported, many community banks face significant
capital constraints, high ratios of criticized assets, and doubts regarding their future
viability. Signature believes there are opportunities for structured transactions where
Signature buys their criticized assets enabling them to raise new capital or complete a merger
that would not otherwise be feasible due to regulatory and other issues. This line has similar
metrics as its other lines that acquire sub-performing and distressed loans with the added
incentive that the purchaser may be able to augment its return with a significant equity kicker.
Although the Reorganized Debtor may acquire a significant ownership position or even 100%
ownership as a result of such a transaction, there may be significant regulatory impediments and
such transactions are not central to the Reorganized Debtor’s
plan. |
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Senior Stretch and Tranche B – The Reorganized Debtor may pursue opportunities to acquire or
originate senior secured “stretch” loans and Tranche B loans that are junior secured loans subject
to an intercreditor agreement. These loans go beyond normal senior lending guidelines but present
significant risk/reward opportunities. |
The Reorganized Debtor’s business plan will build upon the
existing platform established by Signature. In conjunction with assuming managerial responsibility
for the Reorganized Debtor, the Reorganized Debtor shall seek to wind down all of its existing
activities or fold them into the Reorganized Debtor as appropriate while pursuing the long-term
strategy to utilize the assets of the Reorganized Debtor to expand Signature’s existing special
situation lending platform and expand the business to grow a significant portfolio of income
generating assets.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
28
The Reorganized Debtor may utilize the Fremont NOL carry forwards to the fullest extent
allowed under applicable law to generate significant after-tax returns to the Reorganized Debtor’s
shareholders.
C. Management Agreement with Credit Partners Management, Inc.
The Reorganized Debtor’s activities will be managed by CP Management acting as an external
investment advisor. On the Effective Date, the Reorganized Debtor’s Board of Directors will enter
into a temporary management contract with the senior management team of Signature to provide day
to day interim management services to the Company consistent with the post-confirmation business
plan for the Reorganized Debtor, as outlined herein, and to oversee the wind-down of the business
affairs of the Debtor, FRCC, and FRC while a more complete management agreement is negotiated
between the Board and the newly formed entity, CP Management. Such temporary management contract
will terminate upon execution of the Management Agreement, which is expected to occur within 45
days of the Effective Date.
The “Management Agreement” for the Reorganized Debtor for the calendar year 2010 will be based
upon a commercially standard business plan, consistent with the Signature Plan. It will be prepared
and submitted by CP Management, to the Board of Directors for approval within twenty (20) days of
the Effective Date. The form of the proposed Management Agreement, which CP Management anticipates
will be submitted to the Board of Directors for approval, is attached as Exhibit 3 to the
Signature Plan and has been the subject of arms length negotiations between Signature and a
steering committee.
Following the entry into the Management Agreement, CP Management shall register with the U.S.
Securities and Exchange Commission as an investment adviser pursuant to the Investment Advisers Act
of 1940 (the “Advisers Act”). Subject to the supervision of the Reorganized Debtor’s Board of
Directors, CP Management shall then manage the company’s day-to-day operations (other than the
wind-down of legacy assets) and provide investment advisory services pursuant to the Management
Agreement. If any of the Remaining Executives elect to continue with the Reorganized Debtor, they
will continue to manage the legacy assets of the Debtor through the end of their contract.
Under the terms of the proposed Management Agreement, CP Management shall:
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
29
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identify, evaluate and negotiate the structure of the investments made by the
Reorganized Debtor; |
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determine the investments and other assets that the Reorganized Debtor will
purchase, retain, or sell; |
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determine the composition of the portfolio of the Reorganized Debtor, the nature
and timing of the changes therein and the manner of implementing such changes; |
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close and monitor the Reorganized Debtor’s investments; |
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manage, service, administer, and collect payments related to the Reorganized
Debtor’s investments; |
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negotiate, restructure, settle and/or compromise any loan or other debt
obligations related to the investment portfolio; |
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supervise a limited staff of FRC employees who will be employed directly by the
Reorganized Debtor to continue with the orderly wind-down of the Debtor and FRC’s legacy
business activities; |
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engage, interact and supervise any financial advisors, legal counsel,
accountants, or other outside consultants engaged by the Reorganized Debtor to continue
with the orderly wind-down of the Debtor and FRC’s legacy business activities; |
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engage, interact and supervise any financial advisors, legal counsel,
accountants, or other outside consultants engaged by the Reorganized Debtor to
facilitate the Reorganized Debtor’s return to compliance with the SEC and any other
governmental agencies; |
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file, continue, amend and modify any financing statements, Uniform Commercial
Code filings, mortgages, deeds, title policies, etc. related to any liens or collateral
associated with any loan or other debt obligations related to the investment portfolio;
and |
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provide the Reorganized Debtor with such other investment advisory, research and
related services as the Reorganized Debtor may, from time to time, reasonably require
for the investment of its funds. |
The compensation arrangements set forth in the Management Agreement shall be renewable
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
30
annually based on such terms as the Manager and the independent members of the Board of Directors
shall agree. Under the Management Agreement, the Reorganized Debtor will pay CP Management a fee
for its services pursuant to the Management Agreement. The Management Agreement and its fee
structure were established by arm’s-length negotiation between Signature and a Steering Committee
consisting of James McIntyre and Seth Hamot, neither of whom holds any direct or indirect economic
interest in Signature or CP Management. The management fee during the initial term shall be based
upon an expense budget setting forth projected, commercially reasonable operating expenses to be
incurred by CP Management in its management of the Reorganized Debtor. The framework established
by the Steering Committee also provides that annual salaries for each of Messrs. Noell, Grossman,
Donatelli and Ross shall be limited to $150,000 per year for services provided to the Reorganized
Debtor under the Management Agreement. The Management Agreement and the proposed budget shall be
subject to review and approval by the entire Board of Directors within 120 days after the
Effective Date.
Under the Management Agreement and pursuant to the established budget, CP Management is solely
responsible for: (i) compensating CP Management’s investment professionals and their respective
staffs (and pursuant to agreed upon limits on the compensation of Messrs. Noell, Grossman,
Donatelli and Ross), when and to the extent engaged in providing investment advisory and management
services to the Reorganized Debtor, and (ii) the compensation and routine overhead expenses of such
personnel allocable to such services. Notwithstanding the above, the Reorganized Debtor’s Board of
Directors in its sole discretion may award an annual bonus to CP Management above and beyond the
budget based upon performance.
The Management Agreement will have an initial term through December 31, 2010 and will renew
automatically thereafter for annual periods subject to the vote of the Reorganized Debtor’s board
of directors or shareholders.
D. The CP Management Team and the Reorganized Debtor’s Management Team
The CP Management team will be led by Craig Noell, Kyle Ross, Thomas Donatelli and Kenneth
Grossman.
In addition to the CP Management team, the Reorganized Debtor shall seek out accomplished
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
31
commercial finance industry executives based in Atlanta, Los Angeles, and New York to participate
in the management of the Reorganized Debtor in accordance with the terms and structure of this
Plan.
Signature has requested that the Remaining Executives enter into new arrangements with the
Reorganized Debtor providing for their continued employment through the expiration of their
contracts in November 2010 or under other mutually agreeable arrangements while a transition plan
is implemented. No agreement has been reached with these executives, nor can there be any
assurance that any such an agreement will be reached.
E. The Reorganized Debtor’s Board of Directors
The Reorganized Debtor would have a Board of Directors consisting of nine directors including
Craig Noell and Kenneth Grossman of CP Management, and the following directors expected to satisfy
the independence requirements of the New York Stock Exchange: John Nickoll, Robert Schwab, John
Koral, Norman Matthews, Richard A. Rubin, and two directors nominated by the TOPrS Group (which
shall be mutually acceptable to Signature, the TOPrS Group and James
McIntyre). The TOPrS Group
has informed Signature that it expects to recommend Howard Amster and Seth W. Hamot as independent
directors.
F. Reporting Requirements
While it implements its initial investment strategy, the Reorganized Debtor will remain a
public company with Equity Interests trading on national securities exchange. The Reorganized
Debtor will seek an accommodation from the SEC of filing and past due reporting requirements, if
feasible, commencing with a comprehensive Form 10K in the first quarter in which this Plan goes
effective, which is anticipated to be the first or second quarter of 2010. In the event that the
Reorganized Debtor is unable to obtain the requested accommodation or if there are other
impediments, the Reorganized Debtor will become current in its SEC reporting requirements post
emergence.
G. Amendment of Corporate Governance Documents to Authorize Certain
Transactions
Under the Signature Plan, the Reorganized Debtor and its affiliates shall amend and restate
certain of their corporate governance documents, including its articles of incorporation and
bylaws in
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
32
substantially
the form attached as Exhibit 5 and Exhibit 6, respectively, to this
Plan, to the extent necessary to, among other things authorize: (1) the restructuring transactions
contemplated by the Signature Plan, including but not limited to the issuance of Common Stock and
Warrants to be issued under the Signature Plan, (2) implementation of a “Leucadia Provision” (as
discussed in detail below), and (3) the following actions to be taken in the discretion of the
Reorganized Debtor’s board of directors within eighteen months of the Effective Date: a corporate
name change, a new Committee on Uniform Securities Identification Procedures (CUSIP) number, an
exchange of certificates representing common stock of the Debtor par value $1.00 per share for
certificates (for the same number of shares) representing Common Stock of the Reorganized Debtor
par value $0.01 per share (to the extent shares are certificated), a reincorporation to Delaware
or another state (provided that the Reorganized Debtor’s Board of Directors, after receiving
advice from legal and financial advisors, believes that the advantages of such a reincorporation
outweigh the disadvantages).
H. Transfer Restrictions: the “Leucadia Provision”
The Reorganized Debtor, at the option of its Board of Directors, may implement a “Leucadia
Provision” to restrict certain transfers of the common stock or other equity of the Reorganized
Debtor in order to avoid adverse federal income tax consequences caused by certain subsequent
ownership changes (as defined in section 382 of the Internal Revenue Code of the Tax Code, as
described in more detail below).
The Leucadia Provision shall restrict transfers on certain shares of the common stock with the
following material terms:
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no Person may acquire or accumulate five percent or more (as determined under
tax law principles governing the application of Section 382 of the Tax Code) of the
common stock or other equity of the Reorganized Debtor (together, “the Securities”);
and |
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no Person owning directly or indirectly (as determined under such tax law
principles) on the Effective Date, after giving effect to this Plan, or after any
subsequent issuances of securities pursuant to transactions contemplated by this Plan,
five percent or more (as determined under such tax law principles) of the Securities,
may acquire additional |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
33
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shares of that common stock or other equity of the Reorganized Debtor, subject to
certain exceptions, and |
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no person holding 5% or more of the total fair market value of the Securities
may transfer, or agree to transfer, Securities. |
The restrictions on transfer will not apply to certain transactions approved by the board of
directors of the Reorganized Debtor.
The express intent of the Leucadia Provision is to reduce the risk that any change in the
ownership of the Reorganized Debtor’s common stock may jeopardize the preservation of federal
income tax attributes of the Reorganized Debtor for purposes of sections 382 and 383 of the Tax
Code.
Each certificate representing shares of the Reorganized Debtor’s common stock shall bear a
legend in substantially the following form:
“The shares of Reorganized Debtor’s common stock represented by this certificate are issued
pursuant to this Plan of Reorganization for the Reorganized Debtor, as confirmed by the United
States Bankruptcy Court for the Central District of California. The transfer of securities
represented hereby is subject to restriction pursuant to the Bylaws of the Reorganized Debtor. The
Reorganized Debtor will furnish a copy of its Bylaws to the holder of record of this certificate
without charge upon written request addressed to the Reorganized Debtor at its principal place of
business.”
I. Certain Insurance Policy Matters
Westchester Surplus Lines Insurance Company (“WSLIC”) and Pacific Employers Insurance Company
(“PEIC”) are members of the ACE Group of companies. WSLIC issued pre-petition to the Debtor a
claims made directors and officers excess liability insurance policy for claims made against the
insured for wrongful acts occurring between January 1, 2008 and December 31, 2014 (the “WSLIC
Policy”). PEIC issued pre-petition to the Debtor high deductible workers compensation occurrence
policies for the calendar years 2000, 2001 and 2002 (the “PEIC Policies”). The WSLIC Policy and the
PEIC Policies are collectively referred to hereinafter as the “ACE Policies.” Unless rejected
pursuant to the Plan, in which case Claims will be treated solely as set forth in the Plan, nothing
in the Disclosure Statement, the Plan, the Confirmation Order, any
exhibit to this Plan or any
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
34
other Plan document (together the “Plan Documents”) (including any provision that purports to be
preemptory or supervening), shall in any way operate to, or have the effect of, impairing in any
respect the legal, equitable or contractual rights and defenses, if any, of the insured or insurer
with respect to the ACE Policies or any prepetition agreement with the Debtor related to any of
the ACE Policies (the “ACE Policies and Related Agreements”). Unless rejected pursuant to the
Plan, in which case the terms of the Plan shall govern, the rights and obligations of the insured
and insurer shall be determined under the ACE Policies and Related Agreements and under applicable
non-bankruptcy law. Any assumption of the Plan Documents of the ACE Policies and Related
Agreements will not enlarge the prepetition rights of the insured or insurers thereunder.
J. Repurchase Claims Reserves
On the Effective Date of the Signature Plan, Signature will establish a balance sheet cash
reserve of $15,000,000 reflecting its best estimate of the likely liability for Repurchase Claims
payable over time. (This reserve is in addition to Signature’s assumption that the Debtor will
utilize $20 million in cash to pay known Repurchase Claims on or before the Effective Date and
reduce corresponding liabilities in the same amount.) After the Effective Date of the Signature
Plan, the Reorganized Debtor’s Board of Directors may determine to increase or decrease the amount
reserved for the satisfaction of Repurchase Claims (the Signature Plan proposes periodic
adjustments after the Effective Date that maintain a reserve equal to or greater than anticipated
claims payments for the following 12 months), subject to any applicable Court order governing the
reserves. Upon obtaining a line of credit after the Effective Date of the Signature Plan, the
Reorganized Debtor’s Board of Directors may determine that a cash reserve may not be in the best
interest of the company and may, alternatively, elect to establish a reserve under the line of
credit to satisfy the potential liability for Repurchase Claims.
K. Retention of Jurisdiction
The Bankruptcy Court will retain jurisdiction of all matters arising in or related to this Plan to
the fullest extent provided by law until this Plan is fully consummated, including, without
limitations:
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1. |
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The adjudication of the validity, scope, classification, allowance, and disallowance of
any Claim; |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
35
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2. |
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The estimation of any Claim; |
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3. |
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The allowance or disallowance of Professional Fee Claims, compensation, or
other Administrative Claims; |
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4. |
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To hear and determine Claims concerning taxes pursuant to sections 346, 505,
525, and 1146 of the Bankruptcy Code; |
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5. |
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To hear and determine any action or proceeding brought under section 108, 510,
543, 544, 545, 547, 548, 549, 550, 551, and 553 of the Bankruptcy Code; |
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6. |
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To hear and determine all actions and proceedings relating to pre-confirmation matters; |
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7. |
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To hear and determine any issue relating to the assumption or rejection of
executory contracts and unexpired leases; |
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8. |
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To hear and determine any modification to this Plan in accordance with the
Bankruptcy Rules and the Bankruptcy Code; |
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9. |
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To enforce and interpret terms of this Plan; |
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10. |
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To correct any defects, cure any omissions, or reconcile any inconsistency in
this Plan or the Confirmation Order as may be necessary to carry out the purpose and
intent of this Plan; |
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11. |
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To hear and determine such matters and make such orders as are consistent with
this Plan as may be necessary to carry out the provisions thereof and to adjudicate any
disputes arising under or related to any order entered by the Court in this Case; and |
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12. |
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The entry of an order concluding and terminating this Case. |
L. Cancellation and Treatment of Senior Notes and Junior Notes
On the Effective Date, all
Senior Notes and the Senior Notes Indenture shall be deemed automatically canceled and discharged
on the Effective Date, and (ii) the obligations of the Debtor (and Reorganized Debtor) under any
agreements, indentures, or certificates of designation governing the Senior Notes, shall be
discharged in each case without further act or action under any applicable agreement, law,
regulation, order, or rule and without any action on the part of the Court or any Person;
provided, however, that the Senior Notes and the Senior Notes Indenture shall continue in effect
solely for the purposes of (i) allowing the Holders of the Senior Notes to receive their
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
36
Distributions hereunder, (ii) allowing the Indenture Trustee for the Senior Notes to make the
Distributions, if any, to be made on account of the Senior Notes, (iii) permitting the Indenture
Trustee for the Senior Notes to assert its Indenture Trustee Charging Lien against such
Distributions for payment of its Indenture Trustee Fees, and (iv) allowing the Indenture trustee
for the Senior Notes to enforce the subordination provisions contained in the Subordinated
Debenture.
On the Effective Date, except as otherwise provided for herein, (i) the Junior Notes, the
Junior Notes Indenture and TOPrS shall be deemed extinguished, cancelled and of no further force
or effect, and (ii) the obligations of the Indenture Trustee and the Debtor (and Reorganized
Debtor) under any agreements, indentures, or certificates of designation governing the Junior
Notes and TOPrS, shall be discharged in each case without further act or action under any
applicable agreement, law, regulation, order, or rule and without any action on the part of the
Bankruptcy Court or any Person; provided, however, that the Junior Notes, TOPrS and Junior Notes
Indenture shall continue in effect to the extent necessary to permit the Indenture Trustee for the
Junior Notes to (i) maintain or assert any rights or Charging Lien it may have on distributions
pursuant to the Plan, (ii) permit the Indenture Trustee for the Junior Notes to exercise its
rights and obligations relating to the interests of the TOPrS or applicable Holders pursuant to
the Junior Notes Indenture, (iii) allow the Indenture Trustee for the Junior Notes to make
distributions pursuant to the Plan, (iv) permit the Indenture Trustee for the Junior Notes to
assert any rights to indemnity pursuant to the indenture, which indemnification obligations of the
Reorganized Debtor shall survive; (v) permit the Indenture Trustee for the Junior Notes to perform
such other functions as provided under the Junior Notes Indenture, (vi) implement the terms of the
plan, and (vii) appear in the Case.
Subsequent to the performance by the Indenture Trustee for the Junior Notes, the FGFI Trust
trustees or their agents of any duties that are required under the Plan, the Confirmation Order
and/or under the terms of the Indenture, the Indenture Trustee, the trustees and its agents shall
be relieved of, and released from, all obligations associated with the TOPrS, the Junior Notes or
under other applicable trust agreements or law and the Indenture shall be deemed to be discharged
and released.
Upon receipt and distribution of the cash and equity to the Holders of the TOPrS and issuance
and receipt of the New Note and execution of the New Note Indenture as provided under the Plan and
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
37
after payment of the Indenture Trustee Fees, the Fremont General Financing Declaration of Trust
shall be deemed terminated and dissolved and, if necessary or desirable, the Reorganized Debtor or
Junior Note Indenture Trustee may file a certificate of cancellation with the Secretary of State
of Delaware, and upon such termination and dissolution, the Preferred Securities Guarantee shall
be deemed terminated.
V.
CLAIMS
A. Maintenance of Post-Confirmation Claims Register
In order to reduce the administrative burdens on the Bankruptcy Court and to improve the
efficiency of the remaining claims allowance process, the Reorganized Debtor shall be entitled to
retain a third party, including, without limitation, Kurtzman Carson Consultants LLC, to maintain
the official claims register for this Case (the “Post-Confirmation Claims Register”).
The Post-Confirmation Claims Register shall be based, in the first instance, upon an updated
claims database (the “Register Update”) that shall be filed by the Debtor at least twenty-one (21)
days prior to the Confirmation Hearing. Objections by any party in interest to the form or
substance of the Register Update may be considered as part of the Confirmation Hearing. On the
Effective Date, the Register Update shall be deemed to amend and supersede the Bankruptcy Court’s
official register, and may thereafter be relied upon by the Reorganized Debtor and any retained
third party as the official Post-Confirmation Claims Register. Following the Effective Date,
copies of the current Post-Confirmation Claims Register may be obtained by any party in interest
upon written request to the Reorganized Debtor.
Prior to the Effective Date, the Debtor may file a further updated Post-Confirmation Claims
Register that includes updates based upon events in the claims allowance process since the filing
of the initial Post-Confirmation Claims Register.
B. Claim Objections
The Reorganized Debtor or any other party in interest shall file objections to Claims or
Equity Interests within 180 days of the Effective Date. The Reorganized Debtor may obtain an
extension of
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
38
this date by filing a motion in the Bankruptcy Court, based upon a showing of “cause.” Once a
Claim or Equity Interest becomes an Allowed Claim or Equity Interest, it will receive the
treatment afforded by this Plan.
VI.
SECURITIES RELATED MATTERS
A. Issuance of Securities
Except as set forth below, common stock to be issued to Holders of Allowed Claims, if any,
will be issued without registration under the Securities Act or any similar federal, state or
local law in reliance upon the exemptions set forth in section 1145 of the Bankruptcy Code.
Common Stock and Warrants to be issued in connection with the equity investment by the
Signature Investors, as well the common stock to be issued upon the exercise of such Warrants,
will be issued without registration under the Securities Act or any similar state or local law in
reliance upon the exemption set forth in section 4(2) of the Securities Act and the rules set
forth in Regulation D promulgated thereunder. In that regard, the Signature Investors intend to
make customary representations to the Reorganized Debtor, including that it is an “accredited
investor” as defined under Rule 501 of Regulation D.
B. Registration Rights
The Reorganized Debtor shall be responsible for providing mandatory registration rights to the
Signature Investors in order to accommodate the resale of common stock and Warrants sold in
reliance upon the section 4(2) exemption of the Securities Act. Accordingly, on or about the
Effective Date, the Reorganized Debtor shall execute and deliver a Registration Rights Agreement in
substantially the form attached as Exhibit 1 to this Plan.
The Reorganized Debtor shall have twelve (12) months to affect resale registration. The
Registration Rights Agreement shall include customary terms and conditions associated with
mandatory registration provisions. The Reorganized Debtor shall be responsible for all registration
expenses, excluding selling expenses. To the extent that it is currently delinquent in its
reporting
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
39
obligations under the Securities Exchange Act of 1934, the Reorganized Debtor shall use its
reasonable efforts to obtain a waiver and/or become compliant with such reporting obligations.
Consistent with the closing conditions for this Plan to go effective, the Reorganized Debtor
shall execute and deliver the Registration Rights Agreement.
C. Security Certificates
Certificates evidencing shares of preferred stock and warrants received by (i) Holders of
securities issued in reliance upon the exemption set forth in section 4(2) of the Securities Act,
(ii) holders of five percent or more of the outstanding common stock or (iii) by holders that
request legended certificates and who certify that they may be deemed to be underwriters within
the meaning of section 1145 of the Bankruptcy Code, will bear a legend substantially in the form
below:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE AND, IF APPLICABLE, THE COMMON STOCK UNDERLYING SUCH
SECURITIES, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR
OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE SECURITIES
LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
Any person that would receive legended securities as provided above may instead receive
certificates evidencing securities without such legend if, prior to the Effective Date, such person
or entity delivers to the Debtor (a) an opinion of counsel reasonably satisfactory to the Debtor to
the effect that the shares to be received by such person or entity (or the common stock underlying
such shares) may be sold without registration under the Securities Act and (b) a certification that
such person or entity is not an “underwriter” within the meaning of section 1145 of the Bankruptcy
Code.
Any holder of a certificate evidencing shares of the Reorganized Debtor bearing such legend
may present such certificate to the transfer agent for exchange for one or more new certificates
not bearing such legend or for transfer to a new holder without such legend at such times as (a)
such
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
40
shares are sold pursuant to an effective registration statement under the Securities Act or (b)
such holder delivers to the Reorganized Debtor an opinion of counsel reasonably satisfactory to
the Reorganized Debtor to the effect that such shares are no longer subject to the restrictions
pursuant to an exemption under the Securities Act and such shares may be sold without registration
under the Securities Act, in which event the certificate issued to the transferee will not bear
such legend.
D. Investment Company Act Status
The Reorganized Debtor expects that CP Management will register as an investment adviser
under the Advisers Act, but that the Reorganized Debtor will not be required to register under the
1940 Act.
The Reorganized Debtor intends to structure and operate its business and its investments in
such a way that it will not be deemed an “investment company” under the 1940 Act. The Reorganized
Debtor intends to operate as a commercial lender engaged in various financing activities as
discussed herein, and will not be primarily in the business of investing, reinvesting or trading
in securities. However as of the Effective Date of this Plan, the Reorganized Debtor is projected
to own: i) assets that could be deemed “investment securities” as defined in Section 3(a)(1)(C) of
the Company Act, that might exceed 40 percent of its total assets, less government securities,
investments in majority-owned subsidiaries, cash and cash items, and consequently could be
considered an investment company under that section. In such instance, the Reorganized Debtor will
seek to register with the SEC as an investment company unless it can rely on an exception or
exemption from the 1940 Act, or obtain an order from the SEC allowing it to operate under the
terms of the order without registering. For up to a year from the Effective Date of this Plan, the
Reorganized Debtor intends to rely upon the provisions of Rule 3a-2 of the 1940 Act, which
provides a one-year period in which it may operate without being subject to registration and
regulation as an investment company.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
41
VII.
DISBURSEMENTS
A. Manner of Distribution
At the option of the Reorganized Debtor, monetary distributions may be made in Cash, by wire
transfer, or by a check drawn on a domestic bank. Distributions on account of holders of Allowed
Class 3B Claims and Allowed Class 3C Claims shall be made to (a) the applicable Indenture Trustee
or (b) with the prior written consent of the applicable Indenture Trustee, through the facilities
of DTC. If a distribution is made to the applicable Indenture Trustee, the applicable Indenture
Trustee, in its capacity as disbursing agent, shall administer the distributions in accordance
with the Plan and the Senior Notes Indenture or Junior Notes Indenture, as applicable, and be
compensated as described below; provided, however, that nothing herein shall be deemed to impair,
waive or extinguish any rights of the Indenture Trustee with respect to the Charging Lien.
The applicable Indenture Trustee acting as disbursing agent shall only be required to act and
make distributions in accordance with the terms of the Plan and shall have no (A) liability for
actions taken in accordance with the Plan or in reliance upon information provided to it in
accordance with the Plan or (B) obligation or liability for distributions under the Plan to any
party who does not hold a Claim against the Debtor as of the Distribution Record Date or who does
not otherwise comply with the terms of the Plan.
Each Indenture Trustee acting as disbursing agent by providing services related to
distributions under the Plan will receive from the Reorganized Debtor, without further approval of
the Court, reasonable compensation for such services and reimbursement of reasonable out-of-pocket
expenses incurred in connection with such services. These payments will be made by the Reorganized
Debtor and will not be deducted from distributions to be made pursuant to the Plan to Holders of
Allowed Class 3B Claims and Allowed Class 3C Claims receiving distributions from the Indenture
Trustee as disbursing agent. All payments to Holders of Allowed Class 3B Claims and Allowed Class
3C Claims shall only be made to such Holders after the surrender by each such Holder of the Senior
Notes or Junior Notes certificates representing such Class 3B or Class 3C Claim, or in the event
that such certificates are lost, stolen, mutilated or destroyed, upon the Holder’s compliance
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
42
with the
requirements set forth in Section IV.L hereof, or if such Senior Notes or Junior Notes are
held electronically, ownership of such Claims is surrendered in a manner acceptable to the
applicable Indenture Trustee. As soon as practicable after surrender of certificates evidencing
Allowed Class 3B and Allowed Class 3C Claims, the applicable Indenture Trustee shall distribute to
each Holder thereof such Holder’s pro rata share of the Distribution, subject to the rights of the
Indenture Trustee to assert a Charging Lien against such distribution.
Notwithstanding any provision contained in this Plan to the contrary, the distribution
provisions contained in the Senior Notes Indenture and the Junior Notes Indenture shall continue
in effect to the extent necessary to authorize the applicable Indenture Trustee to receive and
distribute to the Holders of Allowed Class 3B Claims and Allowed Class 3C Claims Distributions
pursuant to this Plan and shall terminate upon completion of all such Distributions.
Any Distribution required to be made to satisfy Priority Tax Claims or Administrative Tax
Claims shall include interest at the applicable rate pursuant to Section 511 of the Bankruptcy Code
calculated as of the actual date of Distribution.
B. Undeliverable Distributions
If a Distribution is returned to the Disbursing Agent as undeliverable, then such Distribution
amount shall be deemed to be “Unclaimed Property.” Nothing contained in this Plan shall require the
Disbursing Agent, or anyone else, to attempt to locate such Person. The Unclaimed Property shall be
set aside and (in the case of Cash) held in a segregated interest-bearing account to be maintained
by the Disbursing Agent. If such Person presents itself within one (1) year following the Effective
Date, the Unclaimed Property distributable to such Person, together with any interest or dividends
earned thereon, shall be paid or distributed to such Person. If such Person does not present itself
within one (1) year following the Effective Date, any such Unclaimed Property and accrued interest
or dividends earned thereon shall become the property of the Reorganized Debtor for use under this
Plan, if required, then to the Reorganized Debtor.
C. Rounding of Payments
Whenever payment of a fraction of a cent would otherwise be called for, the actual payment
shall reflect a rounding down of such fraction to the nearest whole cent. To the extent Cash
remains
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
43
undistributed as a result of the rounding of such fraction to the nearest whole cent, such Cash
shall be treated as “Unclaimed Property” and shall be dealt with in as described above.
D. Compliance with Tax Requirements
The Disbursing Agent shall comply with all withholding and reporting requirements imposed by
federal, state, or local taxing authorities in connection with making Distributions pursuant to
this Plan.
In connection with each Distribution with respect to which the filing of an information
return (such as an Internal Revenue Service Form 1099 or 1042) or withholding is required, the
Disbursing Agent shall file such information return with the Internal Revenue Service and provide
any required statements in connection therewith to the recipients of such Distribution, or effect
any such withholding and deposit all moneys so withheld to the extent required by law. With
respect to any Person from whom a tax identification number, certified tax identification number,
or other tax information required by law to avoid withholding has not been received by the
Disbursing Agent, then the Disbursing Agent may, at its sole option, withhold the amount required
and distribute the balance to such Person or decline to make such Distribution until the
information is received.
E. Distribution of Unclaimed Property
If a distribution is returned to the Disbursing Agent as undeliverable, then such distribution
amount shall be deemed to be “Unclaimed Property.” Nothing contained in this Plan shall require the
Disbursing Agent, or anyone else, to attempt to locate such Person. The Unclaimed Property shall be
set aside and (in the case of Cash) held in a segregated interest-bearing account to be maintained
by the Disbursing Agent. If such Person presents itself within one (1) year following the Effective
Date, the Unclaimed Property distributable to such Person, together with any interest or dividends
earned thereon, shall be paid or distributed to such Person. If such Person does not present itself
within one (1) year following the Effective Date, any such Unclaimed Property and accrued interest
or dividends earned thereon shall become the property of the Reorganized Debtor for use under this
Plan, if required, then to the Reorganized Debtor.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
44
F. No De Minimis Distributions
If any single distribution required by this Plan would be for an amount of $25.00 or less,
then the Disbursing Agent shall not be required to process the distribution and may, at its
option, either add the distribution to the next distribution if the collective amount would be
greater than $25.00 or may treat the distribution as Unclaimed Property.
G. Setoff
Any Claims of any nature which the Debtor or the Estate may have against the Holder of a Claim
may be, but are not required to be, set off against any Claim and the Distribution to be made
pursuant to this Plan in respect of such Claim. Neither the failure by the Disbursing Agent or any
other Person to affect such a setoff nor the allowance of any Claim shall constitute a waiver or a
release of any claim which any or all of the foregoing may have against the Holder of a Claim.
Except as otherwise provided in this Plan, all Causes of Action are retained and preserved
pursuant to section 1123(b) of the Bankruptcy Code including, without limitation, the pending or
contemplated Causes of Action identified on Exhibit 1 to the Disclosure Statement, a
revised, amended and modified version of which may be submitted prior to the ten (10) days prior to
the Confirmation Hearing. From and after the Effective Date, all Causes of Action will be
prosecuted or settled by the Reorganized Debtor. To the extent any Cause of Action is already
pending on the Effective Date, the Reorganized Debtor as successor to the Debtor will continue the
prosecution of such Cause of Action In addition, and without limiting the generality of Section of
this Plan, from and after the Effective Date (as a result of the Merger), the Reorganized Debtor is
the successor-in-interest to any and all interests of FGCC or FRC in any and all claims rights, and
causes of action which have been or could have been commenced by FGCC or FRC immediately prior to
the Effective Date. Notwithstanding the foregoing, nothing herein shall be deemed to require the
Reorganized Debtor to prosecute any Cause of Action.
H. Distribution Record Date
At the close of business on the Distribution Record Date, the claims registers for all Claims
and the transfer ledgers for the Senior Notes shall be closed, and there shall be no further
changes in the record holders of such Claims or such Senior Notes. Except as provided herein, the
Reorganized
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
45
Debtor, the Disbursing Agent, the Indenture Trustee, and each of their respective agents,
successors, and assigns shall have no obligation to recognize any transfer of Claims or any
transfer of Senior Notes occurring after the Distribution Record Date and shall be entitled
instead to recognize and deal for all purposes hereunder with only those record holders stated on
the claims registers or transfer ledgers as of the close of business on the Distribution Record
Date irrespective of the number of distributions to be made under this Plan to such Persons or the
date of such distributions.
I. Delivery and Surrender of Senior Notes
Each Holder of any Senior Note shall surrender such Senior Note to the Indenture Trustee for
the Senior Notes. No Distribution hereunder shall be made to or on behalf of any such Holder unless
and until such Senior Note is received by the Indenture Trustee for the Senior Notes, or the loss,
theft or destruction of such Senior Note is established to the satisfaction of the Indenture
Trustee for the Senior Notes, including requiring such Holder (i) to submit a lost instrument
affidavit and an indemnity bond, and (ii) to hold the Debtor and the Indenture Trustee for the
Senior Notes harmless in respect of such Senior Note and any Distributions made in respect thereof.
Upon compliance with this Section by a Holder of any Senior Note, such Holder shall, for all
purposes under this Plan, be deemed to have surrendered such Senior Note. Any such Holder that
fails to surrender such Senior Note or satisfactorily explain its non-availability to the Indenture
Trustee for the Senior Notes within eighteen months of the Effective Date shall be deemed to have
no further Claim against the Debtor or its property, or the Indenture Trustee for the Senior Notes
in respect of such Claim, and shall not participate in any Distribution hereunder, and the
Distribution that would otherwise have been made to such Holder shall be distributed by the
Indenture Trustee for the Senior Notes to all Holders who have surrendered their Senior Notes or
satisfactorily explained their non-availability to the Indenture Trustee for the Senior Notes
within eighteen months of the Effective Date.
J. Delivery and Surrender of Junior Notes
Except as provided in the Plan for lost, stolen, mutilated or destroyed notes, each Holder of
any Junior Note not held through book entry must tender such note to the Reorganized Debtor or the
Indenture Trustee for the Junior Notes acting as distribution agent in accordance with a letter of
transmittal to be provided to such Holders by the Reorganized Debtor or Indenture Trustee as
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
46
promptly as practicable on the Effective Date. The letter of transmittal will include, among
other provisions, customary provisions with respect to the authority of the Holder of such note
to act and the authenticity of any signatures required thereon. All surrendered notes will be
marked as cancelled and delivered to the Reorganized Debtor. If the record Holder of a note is
DTC or its nominee or such other securities depository or custodian thereof or is held in book
entry or electronic form pursuant to a global security held by DTC, then the beneficial Holder of
such a note shall be deemed to have surrendered such Holder’s security, note, debenture or other
evidence of indebtedness upon surrender of such global security by DTC or such other securities
depository or custodian thereof.
K. Outside Effective Date Distributions Date
Distributions payable as of the Effective Date or “as soon thereafter as is practicable” (such
Distributions, “Effective Date Distributions”) must occur by the following outside dates: (i) with
respect to Effective Date Distributions to be made to the respective Indenture Trustee for
distribution to Holders of Senior Notes and, if applicable, the Holders of Junior Notes, such
Distributions shall be made no later than by the third (3rd) Business Day after the Effective Date;
and (ii) with respect to all other Effective Date Distributions, such Distributions shall be made
no later than by the fifth (5th) Business Day after the Effective Date.
VIII.
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
A. Conditions to Confirmation
The following are conditions precedent to the occurrence of the Confirmation Date, each of
which must be satisfied or waived in accordance with this Plan:
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1. |
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An order finding that the Disclosure Statement contains adequate
information pursuant to section 1125 of the Bankruptcy Code shall have been
entered; and |
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2. |
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The proposed Confirmation Order shall be in form and substance
reasonably satisfactory to Signature and wholly consistent with this Plan, and
shall provide that, notwithstanding Bankruptcy Rule 3020(e), such Confirmation
Order shall be immediately effective upon entry on the Court’s docket. |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
47
B. Conditions to Effective Date
The following conditions precedent must be satisfied or waived on or prior to the Effective
Date in accordance with the provisions of this Plan:
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1. |
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The Confirmation Order shall have been entered in form and substance
reasonably satisfactory to Signature, and shall, among other things: |
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a. |
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Provide that the Debtor and the Disbursing Agent
are authorized and directed to take all actions necessary or appropriate
to enter into, implement, and consummate the obligations under the Plan; |
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b. |
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Authorize the issuance of the Common Stock and the Warrants; and |
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2. |
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All conditions precedent to the financing commitments required to
consummate the Reorganized Debtor’s obligations on the Effective Date shall have
been waived or satisfied; |
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3. |
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The Confirmation Order shall not then be stayed, vacated, or reversed; |
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4. |
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All documents, instruments and agreements provided for under this Plan or
necessary to implement this Plan (including the Management Agreement, the
Subscription Agreement(s) and the Registration Rights Agreement, but not necessarily
the Warrant) shall have been executed and delivered by all parties thereto, unless
such execution or delivery has been waived by the parties benefited; |
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5. |
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All corporate governance documents in a commercially reasonable form
shall have been adopted; |
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6. |
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All material authorizations, consents, and regulatory approvals required,
if any, in connection with consummation of this Plan shall have been obtained; and |
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7. |
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All material actions, documents, and agreements necessary to implement
this Plan shall have been effected or executed. |
C. Waiver of Conditions
Each of the conditions set forth in this Section, with the express exception of the
conditions contained in Section VIII.B.l(a), VIII.B.l(b) and VIII.B.2, may be waived in whole or in
part by Signature with notice to parties-in-interest without a hearing.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
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D. Outside Effective Date
Notwithstanding anything contained to the contrary in this Plan, the Effective Date shall
occur no later than 25 days after entry of the Confirmation Order, unless (a) the Confirmation
Order is stayed on appeal by a court of competent jurisdiction, in which case then the Effective
Date shall by the first Business Day occurring ten (10) days after such stay is dissolved by Final
Order, or (b) the Effective Date is extended with the written consent of the Creditor’s Committee,
which consent shall not be unreasonably withheld.
IX.
EFFECT OF CONFIRMATION OF PLAN
A. Discharge
Because this Plan does not contemplate the liquidation of substantially all of the property of
the estate and the Reorganized Debtor will engage in business after consummation of this Plan, the
rights under this Plan and the treatment of Claims and Equity Interests under this Plan will be in
exchange for, and in complete satisfaction, discharge, and release of all Claims of any nature
whatsoever against the Debtor, the Reorganized Debtor, or their property, except as otherwise
provided in this Plan or the Confirmation Order,
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On the Effective Date, except as otherwise provided for in this Plan the
Debtor, the Debtor’s Estate, Reorganized Debtor, and their property will be deemed
discharged and released from any and all Claims, including without limitation, all
demands, liabilities, and Claims, that arose before the Confirmation Date or that are
based upon or otherwise relate to acts, events, omissions, transactions or other
activities of any kind that occurred before the Confirmation Date, and all debts of the
kind specified in Bankruptcy Code §§ 502(g), 502(h), or 502(i) regardless of whether:
(a) a proof of Claim based on such debt is filed or deemed filed; (b) a Claim based on
such debt is allowable under Bankruptcy Code § 502; or (c) the Person holding the Claim
based on such a debt has accepted this Plan; |
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All Persons will be precluded from asserting against the Debtor, the Estate, or the |
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
49
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Reorganized Debtor, or their property, any other or further Claims based on, arising
from, or in connection with any act, event, omission, transaction, or other activity
of any kind that occurred before the Confirmation Date; |
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Any debt of the Debtor, whether secured or unsecured, which was in default up
to the Confirmation, will no longer be deemed in default. Moreover, to the extent that
the Debtor and Reorganized Debtor comply with the terms and conditions of this Plan,
these obligations will be deemed in good standing; |
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As set forth in sections 524 and 1141 of the Bankruptcy Code, except as
otherwise provided in this Plan or the Confirmation Order, the Confirmation Order
constitutes a discharge or any and all Claims against, and all debts and liabilities
of, the Debtor. The Reorganized Debtor and its property will be deemed discharged and
released from any and all Claims and Equity Interests, including, without limitation,
all demands, liabilities, Claims and Equity Interests that arose before the
Confirmation Date or that are based on or otherwise relate to acts, events,
transactions, or other activities of any kind that occurred before the Confirmation
Date. This discharge will void any judgment that was obtained against the Debtor at any
time only to the extent that the judgment relates to a discharged Claim. |
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Subject to the limitations and conditions imposed under section 1125(e) of the
Bankruptcy Code, Persons who, in good faith and in compliance with applicable
provisions of the Bankruptcy Code, either solicit Plan acceptances or rejections or
participate in the offer, issuance, sale, or purchase of securities under this Plan
will not be liable on account of their solicitation or participation for violation of
any applicable law, rule, or regulation governing the solicitation of Plan acceptances
or rejections or the offer, issuance, sale, or purchase of such securities. |
B. Vesting of Property of the Estate
On the Effective Date, all Assets that are property of the Estate as of the Effective Date,
including all Causes of Action, Rights of Action and Avoidance Actions, will vest in the
Reorganized Debtor free and clear of the Claims of any Creditors.
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF
FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
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For the avoidance of doubt, on and after the Effective Date, the Reorganized Debtor
shall have the authority and right, without the need for Bankruptcy Court approval (unless
otherwise required by the Plan), to exercise its reasonable business judgment to direct and
control the disposition and use of all Assets that were property of the Estate as of the Effective
Date (including all Causes of Action, Rights of Action and Avoidance Actions) and to compromise,
settle, object to, dispute, seek to subordinate, or otherwise litigate any and all Claims asserted
against the Debtor, FRC, or FGCC.
X.
MISCELLANEOUS PROVISIONS
A. Modification of Plan
Signature may modify this Plan at any time before confirmation provided that the
modifications meet the requirements, of the Bankruptcy Code. Signature may also seek to modify
this Plan at any time after confirmation only if (1) this Plan has not been substantially
consummated and (2) the Court authorizes the proposed modifications after notice and a hearing.
B. The Committees
Until the Effective Date, the Equity Committee and the Creditors Committee shall continue in
existence. As of the Effective Date, the Equity Committee and the Creditors Committee shall
terminate and disband and the members of the Equity Committee and the Creditors Committee shall be
released and discharged of and from all further authority, duties, responsibilities and
obligations related to and arising from their service as Committee members. Except as otherwise
provided in this Plan or Court order, the prohibition on members of the Equity Committee from
trading their respective Equity Interests shall cease as of the Confirmation Date.
C. Post-Confirmation Status Report
Within 120 days of the Confirmation Date, the Reorganized Debtor shall file a status report
with the Court explaining what progress has been made toward consummation of the confirmed Plan.
The status report shall be served on the United States Trustee and the members of the
Committees. Until the entry of the Final Decree (as defined below), further status reports shall
be filed every 180 days and served on the same Persons. Following the Entry of the Final Decree,
the
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
51
Reorganized Debtor will post quarterly status reports on the Reorganized Debtor’s website
until the earlier of (a) eighteen months after the Effective Date, or (b) the date upon which the
Reorganized Debtor has become current in its SEC reporting requirements.
D. Post-Confirmation United States Trustee Fees
Pursuant to 28 U.S.C. § 1930(a)(6), quarterly fees to the United States Trustee will continue
to be due until the bankruptcy case is closed, at the rate in effect at the time such fees are
due. Such fees shall be paid by the Disbursing Agent.
E. Exemption From Securities Laws
The issuance of the stock pursuant to the Plan shall be exempt from any securities laws
regulation requirements to the fullest extent permitted by Section 1145 of the Bankruptcy Code,
Section 4(2) of the Securities Act and any other applicable exemptions.
F. Exculpation
As of the Effective Date, neither the Debtor, FGCC or FRC (including, without limitation,
their successors or assigns, including, without limitation, the Reorganized Debtor, the Disbursing
Agent, the Board of Directors and Board of Directors’ Agents) or the Creditors’ Committee, the
Equity Committee, the Indenture Trustees, Signature, New World Acquisition, LLC, Kenneth S.
Grossman, Daniel Pfeiffer or James A. Mclntyre, Sr., and, in each case, none of their respective
present or former officers, directors, employees, members, agents, representatives, shareholders,
attorneys, accountants, Financial advisors, investment bankers, lenders, consultants, experts, and
professionals and agents for the foregoing shall have or incur any liability for, and are expressly
exculpated and released from, any claims (as such term is defined in Section 101 of the Bankruptcy
Code) (including, without limitation, any claims whether known or unknown, foreseen or unforeseen,
then existing or thereafter arising, in law, equity or otherwise) for any past or present or future
actions taken or omitted to be taken under or in connection with, related to, effecting, or arising
out of the Case, including those claims arising out of the discharge of the powers and duties
conferred upon the Indenture Trustee for the Senior Notes and the Indenture Trustee for the Junior
Notes by the Senior Notes Indenture or Junior Notes Indenture, respectively, or the Plan or any
order of the Court entered pursuant to or in furtherance of the Plan, or applicable law, including,
without limitation, the
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
52
formulation, negotiation, documentation, preparation, dissemination, implementation,
administration, confirmation, solicitation, or consummation of this Plan and the Disclosure
Statement; except only for actions or omissions to act to the extent determined by a court of
competent jurisdiction (in a Final Order) to be by reason of such party’s gross negligence, willful
misconduct, or fraud, and in all respects, such party shall be entitled to rely upon the advice of
counsel with respect to its duties and responsibilities under this Plan. It, being expressly
understood that any act or omission with the approval of the Bankruptcy Court, will be conclusively
deemed not to constitute gross negligence, willful misconduct, or fraud unless the approval of the
Bankruptcy Court was obtained by fraud or misrepresentation. No Holder of a Senior Note Claim or a
Junior Note Claim or other party in interest shall have or pursue any claim or cause of action
against the Indenture Trustee for the Senior Notes or the Junior Notes, as applicable, for making
Distributions in accordance with this Plan or for implementing the provisions of this Plan.
In addition to the exculpation set forth above, similar exculpation is hereby provided to each
of U.S. Bank National Association, Wells Fargo Bank, National Association, and Deutsche Bank
National Trust Company, consistent with the provisions of (1) paragraph 5 of that certain Order
Granting Motion for Order Approving Settlement and Mutual Release Agreement By and Among U.S. Bank
National Association, as Trustee, Fremont Reorganizing Corporation, and Fremont General Corporation
[Docket No. 1661]; (2) paragraph 7 of that certain Order Granting Motion for Order Approving
Settlement and Mutual Release Agreement By and Among Wells Fargo Bank, National Association, as
Trustee, Fremont Reorganizing Corporation, and Fremont General Corporation [Docket No. 1987]; and
(3) paragraph 5 of that certain Order Granting Motion for Order Approving Stipulations By and Among
Deutsche Bank National Trust Company, as Trustee, Fremont Reorganizing Corporation, and Fremont
General Corporation [Docket No. 1803].
G. Governing Law
Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code
and Bankruptcy Rules), the laws of (a) the State of California shall govern the construction and
implementation of the Plan and (except as may be provided otherwise in any such agreements,
documents, or instruments) any agreements, documents, and instruments executed in connection with
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
53
the Plan and (b) the laws of the state of incorporation of the Debtor shall govern corporate
governance matters; in each case without giving effect to the principles of conflicts of law
thereof.
H. Notices
Any notice, request, or demand required or permitted to be or provided under the Plan shall be
(a) in writing, (b) served by (i) certified mail, return receipt requested, (ii) hand delivery,
(iii) overnight delivery service, (iv) first class mail, or (v) facsimile transmission, and (c)
deemed to have been duly given or made when actually delivered or, in the case of notice by
facsimile transmission, when received and telephonically confirmed, addressed as follows:
Counsel for Signature Group Holdings LLC
Manderson, Schafer & McKinlay
John P. Schafer, Esq.
Chris Manderson, Esq.
4695 MacArthur Court, Suite 1270
Newport Beach, CA 92660
Facsimile: (949) 743-8310
Counsel for the Creditors’ Committee
Klee, Tuchin, Bogdanoff & Stern LLP
Jonathan S. Shenson, Esq.
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Facsimile: (310) 407-9090
Debtor’s Co-Reorganization Counsel
Stutman, Treister & Glatt
Theodore Stolman, Esq.
1901 Avenue of the Stars, Suite 1200
Los Angeles, California 90067
Facsimile: (310) 228-5788
Counsel for the Official Committee of Equity Holders
Weiland, Golden, Smiley, Wang, Ekvall & Strok, LLP
Evan D. Smiley, Esq.
650 Town Center Drive, Suite 950
Costa Mesa, California 92626
Facsimile (714) 966-1002
I. Payment of the Signature Plan Proponents’ Expenses
On the Effective Date, the Disbursing Agent shall pay the expenses of Signature, New World and
James Mclntyre, including reasonable fees of their attorneys and advisors. The Signature Plan
Proponents shall submit application(s) pursuant to Sections 503(b)(3)(D) and (b)(4) of the
Bankruptcy Code no later than ten (10) Business Days following entry of the Confirmation Order
seeking
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
54
allowance of such fees and expenses incurred on the basis that confirmation of the Plan constitutes
a “substantial contribution” that directly benefits the estate, its creditors, and other interested
parties.
J. ERISA Claims
Nothing in the Plan or in any Order confirming the Plan shall enjoin or otherwise prevent the
prosecution of the ERISA Action or the collection from available insurance proceeds by plaintiffs
in the ERISA Action on the basis provided for by the Court’s Order dated October 29, 2009 [Docket
No. 1163] (the “ERISA Order”) and the terms and conditions of the ERISA Order shall not be modified
in any manner by the Plan and shall remain in full force and effect.
K. New York State Teachers’ Retirement System Class Action
The Reorganized Debtor shall continue to comply with any obligations of the Debtor under
applicable law regarding the preservation and retention of books, records and other documents.
Notwithstanding anything to the contrary in the Plan or the Confirmation Order, nothing in the
Plan or the Confirmation Order shall preclude the New York State Teachers’ Retirement System, for
itself and on behalf of the putative class in the consolidated securities class action styled as
New York State Teachers’ Retirement System v. Fremont General Corporation et al., Case No.
2:07-cv-05756-FMC-FFM, United States District Court for the Central District of California (the
“Securities Class Action”), from (a) satisfying any of its alleged claims against the Debtor from
available insurance coverage and proceeds, or (b) from seeking discovery in connection with the
Securities Class Action from the Debtor or the Reorganized Debtor, in each instance as may be
permitted under applicable law in order to prosecute any of its alleged claims against non-Debtor
third parties.
L. Final Decree
Upon substantial consummation of this Plan and the occurrence of the Effective Date, the
Estate shall be deemed fully administered as referred to in Bankruptcy Rule 3022, and the
Reorganized Debtor shall file a motion with the Court to obtain a final decree to close the
Reorganization Case (the “Final Decree”).
SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
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Dated: May 24, 2010 |
SIGNATURE GROUP HOLDINGS, LLC
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/s/ Craig F. Noell |
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Craig F. Noell |
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Managing Director |
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/s/ John P. Schafer |
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JOHN P. SCHAFER, an attorney with |
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MANDERSON, SCHAFER & McKINLAY LLP, attorneys for SIGNATURE GROUP HOLDINGS, LLP |
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JAMES MCINTYRE, an Individual
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By: |
/s/ James Mclntyre |
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James Mclntyre |
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SIGNATURE GROUP HOLDINGS, LLC’S FOURTH AMENDED CHAPTER 11 PLAN OF
REORGANIZATION OF FREMONT GENERAL CORPORATION, JOINED BY JAMES MCINTYRE AS CO-
PLAN PROPONENT, DATED MAY 24, 2010
56
EXHIBIT 1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of , 2010 by and among the
Company (as defined below) and (together
with its affiliates, referred to herein as the “Investors”).
RECITALS
WHEREAS, the form of this Agreement was submitted as a part of the Investors’ plan of
reorganization (the “Plan”) for Fremont General Corporation, a Nevada Corporation (as reorganized
pursuant to the Plan, the “Company”); and
WHEREAS, in connection with the consummation of the transactions contemplated by the Plan,
including the sale of Common Stock and Warrants to the Investors, the parties desire to enter into
this Agreement in order to grant certain registration rights to the Investors as set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1 GENERAL
1.1 Definitions. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to those terms in the Plan. As used in this Agreement, the following terms shall
have the following respective meanings:
“Affiliate” of any particular Person means any other Person controlling, controlled by or
under common control with such particular person or entity.
“Common Stock” means shares of common stock, $1.00 par value per share, of the Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or similar federal
statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in
effect at the time.
“Form S-3” means such form under the Securities Act as in effect on the date hereof or any
successor or similar registration form under the Securities Act subsequently adopted by the SEC
which permits inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
“Holder” means any Investor who holds Registrable Securities and any holder of Registrable
Securities to whom the registration rights conferred by this Agreement have been transferred in
compliance with Section 2.8 hereof.
“Person” means any individual, corporation, partnership, joint venture, limited liability
company, business trust, joint stock company, trust or unincorporated organization or any
government or any agency or political subdivision thereof.
“Register,” “registered,” and “registration” shall refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities Act and applicable
rules and regulations thereunder, and the declaration or ordering of effectiveness of such
registration statement.
“Registrable Securities” means (a) the Shares; and (b) any Common Stock issued as (or issuable
EXHIBIT 1
1
upon the conversion or exercise of any warrant, right, preferred stock or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for or in replacement
of, the Shares held by the Holders provided, however, that Registrable Securities shall not
include any shares of Common Stock (i) which have been sold to the public by a Holder either
pursuant to a registration statement or Rule 144 under the Securities Act; (ii) which have been
sold in a private transaction in which the transferor’s rights under this Agreement are not
assigned in compliance with the terms of this Agreement; or (iii) which may be sold pursuant to
Rule 144 and otherwise without restriction or limitation pursuant to Rule 144 (or any successor
thereto) under the Securities Act, after taking into account any Holders’ status as an Affiliate
of the Company as determined by counsel to the Company pursuant to a written opinion letter
addressed to the Company’s transfer agent to such effect.
“Registrable Securities then outstanding” shall be the number of shares determined by
calculating the total number of shares of Common Stock that are Registrable Securities issued and
outstanding.
“Registration Expenses” shall mean all expenses incurred by the Company in effecting any
registration pursuant to this Agreement (including any Mandatory Registration or Shelf
Registration), including, without limitation, all registration and filing fees, printing expenses,
fees and disbursements of counsel for the Company, blue sky fees and expenses, and expenses of the
Company’s independent accountants in connection with any regular or special reviews or audits
incident to or required by any such registration, and fees and expenses of underwriters (excluding
discounts and commissions) and any other Persons retained by the Company, but shall not include
Selling Expenses, certain fees and disbursements of counsel for the Holders (except as set forth
below) and the compensation of regular employees of the Company, which shall be paid in any event
by the Company.
“SEC” or “Commission” means the Securities and Exchange Commission.
“Securities Act” shall mean the Securities Act of 1933, as amended, or similar federal
statute, and the rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
“Selling Expenses” shall mean all underwriting discounts, selling commissions, fees of
underwriters, selling brokers, dealer managers and similar securities industry professionals and
stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of
counsel for any Holder (other than the fees and disbursements of counsel included in Registration
Expenses).
“Shares” mean shares of Common Stock to be issued by the Company to the Investors in
accordance with the terms of the Plan or the Warrants.
“Trading Day” means a day on which the principal securities exchange or automated quotation
system upon which the Registrable Securities are then listed for public trading) shall be open for
business.
“Warrants” means the warrants issued pursuant to the Plan to the Signature Investors, to
purchase an aggregate of 15,000,000 shares of Common Stock.
SECTION 2 REGISTRATION
2.1 Registration
(a) In accordance with the requirements of Section 2.3 below, the Company shall use its
commercially reasonable efforts to file with the SEC, and to cause to be declared effective by the
SEC, a registration statement on the applicable SEC form with respect to the resale from time to
time, whether underwritten or otherwise, of the Registrable Securities by the Holders thereof. The
Company shall also use its commercially reasonable efforts to maintain the effectiveness of the
registration effected pursuant to this Section 2.1 and keep such registration statement free of any
material misstatements or omissions at all times, subject only to the limitations on effectiveness
set forth below. The registration contemplated by this Section 2.1 is referred to herein as the
“Mandatory Registration.”
EXHIBIT 1
2
The Mandatory Registration shall be filed with the SEC in accordance with and pursuant to Rule 415
promulgated under the Securities Act (or any successor rule then in effect) (a “Shelf
Registration”). The Company shall use its commercially reasonable efforts to cause the
registration statement filed on Form S-3 or any similar short-form registration as the Company may
elect to remain effective until such date (the “Shelf Termination Date”) as is the earlier of (i)
the date on which all Registrable Securities included in the registration statement shall have
been sold or shall have otherwise ceased to be Registrable Securities and (ii) the date on which
all remaining Registrable Securities may be sold pursuant to Rule 144 and otherwise without
restriction or limitation pursuant to Rule 144 (or any successor thereto) under the Securities
Act, after taking into account any Holders’ status as an Affiliate of the Company as determined by
counsel to the Company pursuant to a written opinion letter addressed to the Company’s transfer
agent to such effect. If the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, such registration shall be on another appropriate form in accordance
herewith. In the event the Mandatory Registration must be effected on Form S-l or any similar
long-form registration as the Company may elect, the Company shall use commercially reasonable
efforts to file such registration as a Shelf Registration and the Company shall use its
commercially reasonable efforts to keep such registration current and effective, including by
filing periodic post-effective amendments to update the financial statements contained in such
registration statement in accordance with Regulation S-X promulgated under the Securities Act
until the Shelf Termination Date. By 9:30 a.m. on the Trading Day immediately following the
effective date of the applicable registration statement, the Company shall file with the
Commission in accordance with Rule 424 under the Securities Act the final prospectus to be used in
connection with sales pursuant to such registration statement.
(b) Without the written consent of the Investors, the Company shall not include securities,
whether on behalf of itself or any other person, other then the Registrable Securities on any
registration statement filed pursuant to this Section 2.
(c) Notwithstanding anything to the contrary contained in this Agreement, in the event the
Commission seeks to characterize any offering pursuant to a Mandatory Registration filed pursuant
to this Agreement as constituting an offering of securities by or on behalf of the Company, or in
any other manner, such that the Commission does not permit such registration statement to become
effective and used for resales in a manner that does not constitute such an offering and that
permits the continuous resale at the market by the Holders participating therein (or as otherwise
may be acceptable to each Holder) without being named therein as an “underwriter,” then the Company
shall reduce the number of shares to be included in such registration statement until such time as
the Commission shall so permit such registration statement to become effective as aforesaid. In
making such reduction, the Company shall then reduce the number of shares to be included by all
Holders of Registrable Securities on a pro rata basis (based upon the number of Registrable
Securities otherwise required to be included for each such Holder). As soon as reasonably
practicable thereafter (as permitted by the Commission), the Company shall register the additional
Registrable Securities on such additional registration statements as may be required to register
the resale of all of the Registrable Securities (to the extent it can without causing the foregoing
problem). In no event shall a Holder be required to be named as an “underwriter” in a registration
statement without such Holder’s prior written consent.
2.2 Expenses of Registration. All reasonable Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder shall be borne by the
Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be
borne by the Holders of the Registrable Securities so registered pro rata on the basis of the
number of shares so registered.
2.3 Additional Obligations of the Company. The Company shall:
(a) After the closing of the sale of the Common Stock and the Warrant (the “Closing Date”),
prepare and file with the SEC a registration statement on Form S-3 (or on Form S-l, if the Company
is not eligible to use Form S-3), and all amendments and supplements thereto and related
prospectuses as may be necessary to comply with applicable securities laws, with respect to such
Registrable Securities and use its best efforts to cause such registration statement to become
effective within six (6) months
EXHIBIT 1
3
after the Closing Date (provided that at least three (3) Trading Days before filing a registration
statement or prospectus or any amendments or supplements thereto, the Company shall furnish to the
counsel selected by the Holders of a majority of the Registrable Securities covered by such
registration statement copies of all such documents proposed to be filed, and the Company shall in
good faith consider any reasonable comments of such counsel).
(b) Promptly notify the Holders (i) when the Company has been notified by the Commission
whether or not a registration statement or any amendment thereto will be subject to a review by
the Commission and (ii) if reviewed, when the Company has been notified by the Commission that a
registration statement or amendment thereto will not be subject to further review. Upon the
request of a Holder, the Company shall provide such Holder true and complete copies of all
correspondence from and to the Commission relating to a registration statement (with all material,
non-public information regarding the Company redacted from such copies). The Company shall respond
as promptly as reasonably practicable to any comments received from the Commission with respect to
the registration statement or any amendments thereto. The Company shall promptly file with the
Commission a request for acceleration of effectiveness in accordance with Rule 461 promulgated
under the Securities Act after the Company is notified (orally or in writing, whichever is
earlier) by the Commission that a registration statement will not be reviewed, or will not be
subject to further review, such that the Registration Statement shall be declared effective no
later than seven (7) Trading Days after such notification.
(c) Furnish to the Investors and Holders such number of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its commercially reasonable efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holders unless an exemption from registration and
qualification exists; provided that the Company shall not be required in connection therewith or
as a condition thereto to qualify to do business, file a general consent to service of process or
subject itself to general taxation in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of
such offering. Each Investor and/or Holder participating in such underwriting shall also enter
into and perform its obligations under such an agreement.
(f) Promptly notify each Investor who holds, and each Holder of Registrable Securities covered
by the registration statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then existing (provided
that in no event shall such notice contain any material, non-public information regarding the
Company) and, the Company shall promptly prepare and furnish to each such Holder a reasonable
number of copies of a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state a fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made.
(g) Use its commercially reasonable efforts to furnish, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are being sold
through
underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company
for the
purposes of such registration, in form and substance as is customarily given to underwriters
in an
underwritten public offering, addressed to the underwriters, if any, and (ii) a letter dated
as of such
EXHIBIT 1
4
date, from the independent registered public accountants of the Company, in form and substance as
is customarily given by independent registered public accountants to underwriters in an
underwritten public offering addressed to the underwriters.
(h) Use its commercially reasonable efforts to (i) prevent the issuance of any stop order or
other suspension of effectiveness of a registration statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction in the United
States, and (ii) in the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or any order suspending or preventing the use of any related prospectus or
suspending the qualification of any equity securities included in such registration statement for
sale in any jurisdiction, the Company shall use its commercially reasonable efforts promptly to
obtain the withdrawal of such order.
(i) Use its commercially reasonable efforts to cooperate with the Holders who hold
Registrable Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the Holders may
reasonably request and, registered in such names as the Holders may request.
(j) Provide and cause to be maintained a registrar and transfer agent for all Registrable
Securities covered by any registration statement from and after a date not later than the
effective date of such registration statement.
(k) Use its commercially reasonable efforts to maintain eligibility to use Form S-3 (or any
successor form thereto) for the registration of the resale of the Registrable Securities.
(1) Not, nor shall any Subsidiary or affiliate thereof, identify any Investor as an
underwriter in any public disclosure or filing with the SEC without the Investor’s written
consent, and any Investor being deemed an underwriter by the SEC shall not relieve the Company of
any obligations it has under this Agreement or any other transaction document contemplated by the
Plan.
2.4 Suspension of Sales. Upon receipt of written notice from the Company that the
registration statement or a prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the statements therein
not misleading (a “Misstatement”), each Investor who holds, and each Holder of, Registrable
Securities shall forthwith discontinue disposition of Registrable Securities until such Investor
and/or Holder has received copies of the supplemented or amended prospectus that corrects such
Misstatement, or until such Investor and/or Holder is advised in writing by the Company that the
use of the prospectus may be resumed, and, if so directed by the Company, such Investor and/or
Holder shall deliver to the Company all copies, other than permanent file copies then in such
Investor’s or Holder’s possession, of the prospectus covering such Registrable Securities current
at the time of receipt of such notice. The Company will not suspend the sales under the prospectus
more than two times in any three hundred-sixty-five (365) day period and the total number of days
that any such suspension may be in effect in any three hundred-sixty-five (365) day period shall
not exceed 90 days.
2.5 Termination of Registration Rights. An Investor’s and a Holder’s registration
rights shall expire if all Registrable Securities held by such Investor or Holder (and its
Affiliates, partners, members and former members) may be sold pursuant to Rule 144 without the
requirement to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144 (or any successor thereto) under the Securities Act, after taking into account
any Holder’s status as an Affiliate of the. Company as determined by counsel to the Company
pursuant to a written opinion letter addressed to the Company’s transfer agent to such effect
(provided at least 12 months have lapsed since the Registrable Securities were acquired form the
Company, as calculated in accordance with Rule 144). Termination of such registration rights shall
be conditioned upon the Company’s action to remove the restrictive legends from any Registrable
Securities held by such Investor or Holder and the reissuance of unlegended certificates, in
physical or electronic format, to such Investor or Holder.
EXHIBIT 1
5
2.6 Furnishing Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 2.1 or 2.3 that the selling
Investors and/or Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of such securities as
shall be required to effect the registration of their Registrable Securities.
2.7 Indemnification. In the event any Registrable Securities are included in a
registration statement under this Section 2:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each
Investor, Holder, any underwriter (as defined in the Securities Act) for such Investor or Holder
and each person, if any, who controls such Investor or Holder or underwriter within the meaning of
the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint
or several) to which they may become subject under the Securities Act, or the Exchange Act or
other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements, omissions or
violations (collectively, a “Violation”): (i) any untrue statement or alleged untrue statement of
a material fact contained in such registration statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state securities law in
connection with the registration of the Registrable Securities; and the Company will pay to each
such Investor, Holder, underwriter or controlling person, as accrued any legal or other expenses
reasonably incurred by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement contained in this
Section 2.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for
any such loss, claim, damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration statement by any such Investor,
Holder, underwriter or. controlling person or any failure of such person to deliver or cause to be
delivered a prospectus made available by the Company in a timely manner.
(b) To the extent permitted by law and provided that such Holder is not entitled to
indemnification pursuant to Section 2.7(a) above with respect to such matter, each selling Investor
or Holder (severally and not jointly) will indemnify and hold harmless the Company, each of its
directors, officers, persons, if any, who control the Company within the meaning of the Securities
Act, any underwriter, any other Investor or Holder selling securities in such registration
statement and any controlling person of any such underwriter or other Investor or Holder, against
any losses, claims, damages, or liabilities to which any of the foregoing persons may become
subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based
upon any (i) untrue statement or alleged untrue statement of a material fact regarding such Holder
and provided in writing by such Holder which is contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any amendments or supplements
thereto or (ii) the omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, in each case to the
extent (and only to the extent) that such untrue statement or alleged untrue statement or omission
or alleged omission was made in such registration statement, preliminary or final prospectus,
amendment or supplement thereto, in reliance upon and in conformity with written information
furnished by such Investor or Holder expressly for use in connection with such registration
statement; and each such Investor or Holder will pay, as accrued, any legal or other expenses
reasonably incurred by any Person intended to be indemnified pursuant to this Section 2.7(b), in
connection with investigating or defending any such loss, claim, damage, liability, or
EXHIBIT 1
6
action as a result of such Holder’s untrue statement or omission; provided, however, that the
indemnity agreement contained in this Section 2.7(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is effected without the
consent of the Investor or Holder (which consent shall not be unreasonably withheld); provided,
that, (x) the indemnification obligations in this Section 2.7(b) shall be individual and ratable
not joint and several for each Holder and (y) in no event shall the aggregate of all
indemnification payments by any Investor and/or Holder under this Section 2.7(b) exceed the net
proceeds from the offering received by such Investor and/or Holder.
(c) Promptly after receipt by an indemnified party under this Section 2.7 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 2.7,
deliver to the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable
fees and expenses of such counsel to be paid by the indemnifying party, if (i) the indemnifying
party shall have failed to assume the defense of such claim within seven (7) days after receipt of
notice of the claim and to employ counsel reasonably satisfactory to such indemnified party, as
the case may be; or (ii) in the reasonable opinion of counsel retained by the indemnifying party,
representation of such indemnified party by such counsel would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party represented by
such counsel in such proceeding. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all information reasonably
available to the indemnified party which relates to such action or claim. The indemnifying party
shall keep the indemnified party reasonably apprised of the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its prior written consent;
provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition
its consent. The failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying party of any
liability to the indemnified party under this Section 2.8, except to the extent such failure to
give notice has a material adverse effect on the ability of the indemnifying party to defend such
action.
(d) If the indemnification provided for in this Section 2.7 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim,
damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the indemnifying party
or by the indemnified party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. Notwithstanding the foregoing, the
amount any Investor or Holder will be obligated to contribute pursuant to this Section 2.7(d) will
be limited to an amount equal to the per share public offering price (less any underwriting
discount and commissions) multiplied by the number of shares of Registrable Securities sold by such
Investor or Holder pursuant to the registration statement which gives rise to such obligation to
contribute (less the aggregate amount of any damages which such Investor or Holder has otherwise
been required to pay in respect of such loss, liability, claim, damage, or expense or any
substantially similar loss, liability, claim, damage, or expense arising from the sale of such
Registrable Securities). No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of
EXHIBIT 1
7
the Securities Act) will be entitled to contribution hereunder from any person who was not guilty
of such fraudulent misrepresentation.
(e) The obligations of the Company and Holders under this Section 2.7 shall survive the
completion of any offering of Registrable Securities in a registration statement under this
Section 2, and otherwise.
2.8 Assignment of Registration Rights. The rights to cause the Company to register
Registrable
Securities pursuant to this Agreement may be assigned by an Investor or Holder to a
transferee or
assignee of Registrable Securities to which (a) such transferee is an investment advisory
client,
Affiliate, subsidiary or parent company, family member or family trust for the benefit of a
party hereto,
(b) such transferee shares a common discretionary investment advisor with such Investor or Holder,
or
(c) such transferee or transferees are partners or members of an Investor or Holder, who agree to
act through a single representative; provided, however, (i) the transferor shall furnish to the
Company written notice of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned and (ii) such transferee shall
agree to be subject to all restrictions set forth in this Agreement.
2.9 Rule 144 Reporting. With a view to making available to the Investors and Holders
the benefits
of certain rules and regulations of the SEC which may permit the sale of the Registrable
Securities to
the public without registration, the Company agrees to use its best efforts to:
(a) make and keep public information available, as those terms are understood and defined in
SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times
after the effective date of this Agreement;
(b) file with the SEC, in a timely manner, all reports and other documents required of the
Company under the Exchange Act; and
(c) so long as an Investor or Holder owns any Registrable Securities, furnish to such Investor
or Holder forthwith upon request: a written statement by the Company as to its compliance with the
reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; a copy of the
most recent annual or quarterly report of the Company; and such other reports and documents as an
Investor or Holder may reasonably request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities without registration.
2.10 Obligations of the Holders
(a) Each Holder shall furnish in writing to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such registration as the
Company may reasonably request. In connection therewith, upon the execution of this Agreement, each
Holder shall complete, execute and deliver to the Company a selling securityholder notice and
questionnaire in form reasonably satisfactory to the Company. At least five (5) business days prior
to the first anticipated filing date of any Registration Statement, the Company shall notify each
Holder of any additional information the Company requires from such Holder if such Holder elects to
have any of the Registrable Securities included in the Registration Statement. A Holder shall
provide such information to the Company at least two (2) business days prior to the first
anticipated filing date of such Registration Statement if such Holder elects to have any of the
Registrable Securities included in the Registration Statement.
(b) Each Holder, by its acceptance of the Registrable Securities agrees to cooperate with the
Company as reasonably requested by the Company in connection with the preparation and filing of a
Registration Statement hereunder, unless such Holder has notified the Company in writing of its
election to exclude all of its Registrable Securities from such Registration Statement.
EXHIBIT 1
8
(c) Each Holder covenants and agrees that it shall comply with the prospectus delivery
requirements of the 1933 Act as applicable to it in connection with sales of Registrable
Securities pursuant to any Registration Statement.
SECTION 3 MISCELLANEOUS
3.1 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this
Agreement shall inure to the benefit of and be binding upon the respective successors and
assigns of
the parties (including transferees of any shares of Registrable Securities). Nothing in this
Agreement,
express or implied, is intended to confer upon any party other than the parties hereto or
their respective
successors and assigns any rights, remedies, obligations, or liabilities under or by reason of
this
Agreement, except as expressly provided in this Agreement.
3.2 Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the State of
California,
without giving effect to any choice of law or conflict of law provision or rule (whether of
the State of
California or any other jurisdictions) that would cause the application of the laws of any
jurisdictions
other than the State of California.
3.3 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
3.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
3.5 Notices. Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon personal delivery
to the party to be notified or upon deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified at the address indicated
for such party on the signature page hereof, or at such other address as such party may designate
by ten (10) days’ advance written notice to the other parties.
3.6 Expenses. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees,
costs and necessary disbursements in addition to any other relief to which such party may be
entitled.
3.7 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the holders of a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each Holder of any
Registrable Securities then outstanding, each future Holder of all such Registrable Securities, and
the Company. No such amendment shall be effective to the extent that it applies to less than all of
the holders of the Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
3.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
3.9 Aggregation of Stock. All shares of Registrable Securities held or acquired by
any Investors which are Affiliates shall be aggregated together for the purpose of determining the
availability of any
EXHIBIT 1
9
rights under this Agreement,
3.10 Entire Agreement. This Agreement constitutes the full and entire understanding
and agreement between the parties with regard to the subject matter hereof.
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SIGNATURE PAGE FOLLOWS]
EXHIBIT 1
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth
in the first paragraph hereof.
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“REORGANIZED DEBTOR”
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“SIGNATURE INVESTORS”
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EXHIBIT 1
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EXHIBIT 2
[Form of Warrant]
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN A
MANNER CONSISTENT WITH THE SECURITIES ACT IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY
SUCH SECURITIES.
REORGANIZED DEBTOR
WARRANT
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Warrant No. [
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Reorganized Debtor (the “COMPANY”), hereby certifies that, for aggregate consideration of $
, , or its registered assigns (the “HOLDER”), is entitled to purchase from the
Company up to a total of shares of common stock (the “COMMON STOCK”), of the
Company (each such share, a “WARRANT SHARE” and all such shares, the “WARRANT SHARES”) at an
exercise price equal to $1.03 per share (as adjusted from time to time as provided in Section 9,
the “EXERCISE PRICE”), at any time and from time to time from and after the date hereof and through
and including the date that is the tenth anniversary of the date hereof (the “EXPIRATION DATE”),
and subject to the following terms and conditions:
1. Registration of Warrant; Registration of Transfers.
(a) Registration of Warrant. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “WARRANT REGISTER”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.
(b) Registration of Transfers. The Company shall register the transfer of any portion of this
Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment
attached hereto duly completed and signed, to the Company at its address specified herein. Upon
any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the
form of this Warrant (any such new Warrant, a “NEW WARRANT”), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the
remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance
by such transferee of all of the rights and obligations of a holder of a Warrant.
2. Purchase Price. The purchase price for this Warrant of $ in the aggregate, or $0.02 per
share, shall be payable by the Holder as follows: $ shall be paid on the Effective Date, and $
shall be paid on each anniversary thereafter until the final payment is made on the fourth
anniversary
EXHIBIT 2
1
of the Effective Date. The obligation to pay each $ installment of the purchase price shall be
contingent on, and concurrent with, the vesting of each installment of Warrant Shares as set
forth under Section 3(a).
3. Vesting; Exercise and Duration of Warrants.
(a) Reference is made to Signature Group Holdings, LLC’s Chapter 11 Third Amended Plan of
Reorganization of Fremont General Corporation, Joined by Certain TOPRS Holders and James Mclntyre,
Dated April 9, 2010 (the “Plan”). This warrant shall vest as to shares of underlying Common Stock
according to the following schedule: Warrant Shares (or 20%), shall vest on the Effective Date (as
defined in the Plan), and Warrant Shares (or 20%), shall vest in annual installments thereafter
until this Warrant is fully vested on the fourth anniversary of the Effective Date. This Warrant
shall be exercisable as to vested shares by the registered Holder at any time and from time to
time on or after the date hereof to and including the Expiration Date. At 6:30 p.m., Pacific time
on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and
become void and of no value, provided, that if the closing sales price of the Common Stock on the
Expiration Date is greater than 102% of the Exercise Price on the Expiration Date, then this
Warrant shall be deemed to have been exercised in full (to the extent not previously exercised) on
a “cashless exercise” basis at 6:30 P.M. Pacific time on the Expiration Date. The Company may not
call or redeem all or any portion of this Warrant without the prior written consent of the Holder.
(b) Notwithstanding anything to the contrary herein, at the option of the Holder, the Expiration
Date may be extended for the number of Trading Days during any period occurring after the
Effectiveness Date in which (i) trading in the Common Stock is suspended by any Trading Market,
(ii) the Registration Statement is not effective, or (iii) the prospectus included in the
Registration Statement may not be used by the Holders for the resale of Registrable Securities
thereunder.
4. Delivery of Warrant Shares.
(a) To effect exercises hereunder, the Holder shall not be required to physically surrender this
Warrant unless the aggregate Warrant Shares represented by this Warrant is being exercised. Upon
delivery of the Exercise Notice to the Company (with the attached Warrant Shares Exercise Log) at
its address for notice set forth herein and upon payment of the Exercise Price multiplied by the
number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly
(but in no event later than three Trading Days after the Date of Exercise (as defined herein))
issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise,
which, unless otherwise required by the Purchase Agreement, shall be free of restrictive legends.
The Company shall, upon request of the Holder and subsequent to the date on which a registration
statement covering the resale of the Warrant Shares has been declared effective by the Securities
and Exchange Commission, use its best efforts to deliver Warrant Shares hereunder electronically
through The Depository Trust Corporation or another established clearing corporation performing
similar functions, if available, provided, that, the Company may, but will not be required to
change its transfer agent if its current transfer agent cannot deliver Warrant Shares
electronically through the Depository Trust Corporation. A “DATE OF EXERCISE” means the date on
which the Holder shall have delivered to Company: (i) the Exercise Notice (with the Warrant
Exercise Log attached to it), appropriately completed and duly signed and (ii) if such Holder is
not utilizing the cashless exercise provisions set forth in this Warrant, payment of the Exercise
Price for the number of Warrant Shares so indicated by the Holder to be purchased.
(b) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required
number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder will
have the right to rescind such exercise.
(c) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required
number of Warrant Shares in the manner required pursuant to Section 5(a), and if after such third
Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases (in an open
market
EXHIBIT 2
2
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a
“BUY-IN”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares
that the Company was required to deliver to the Holder in connection with the exercise at issue by
(B) the closing bid price of the Common Stock at the time of the obligation giving rise to such
purchase obligation or (2) at the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver
to the Holder the number of shares of Common Stock that would have been issued had the Company
timely complied with its exercise and delivery obligations hereunder. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect of the Buy-In.
(d) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to
enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of law by the Holder
or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing shares of
Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
5. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer
tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the
issuance of such certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for Warrant Shares or
Warrants in a name other than that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this Warrant or receiving
Warrant Shares upon exercise hereof.
6. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or
in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which may include a surety bond for any Holder other than the original Holder
of the Warrant), if requested. Applicants for a New Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a
mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as
a condition precedent to the Company’s obligation to issue the New Warrant.
7. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant
as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other contingent purchase
rights of persons other than the Holder (taking into account the adjustments and restrictions of
Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued and fully paid and nonassessable.
EXHIBIT 2
3
8. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of
this Warrant are subject to adjustment from time to time as set forth in this Section 9.
(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of
capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by
a fraction of which the numerator shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i)
of this paragraph shall become effective immediately after the record date for the determination
of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant to
clause (ii) or (iii) of this paragraph shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an adjustment under this
paragraph occurs during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
(b) Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding,
distributes to all holders of Common Stock (i) evidences of its indebtedness, (ii) any security
(other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or
warrants to subscribe for or purchase any security, or (iv) any other asset (in each case,
“DISTRIBUTED PROPERTY”), then, at the request of any Holder delivered before the 90th day after the
record date fixed for determination of shareholders entitled to receive such distribution, the
Company will deliver : to such Holder, within five Trading Days after such request (or,
if later, on the effective date of such distribution), the Distributed Property that such Holder
would have been entitled to receive in respect of the Warrant Shares for which such Holder’s
Warrant could have been exercised immediately prior to such record date. If such Distributed
Property is not delivered to a Holder pursuant to the preceding sentence, then upon any exercise of
the Warrant that occurs after such record date, such Holder shall be entitled to receive, in
addition to the Warrant Shares otherwise issuable upon such conversion, the Distributed Property
that such Holder would have been entitled to receive in respect of such number of Warrant Shares
had the Holder been the record holder of such Warrant Shares immediately prior to such record date.
Notwithstanding the foregoing, this Section 9(b) shall not apply to any distribution of rights or
securities in respect of adoption by the Company of a shareholder rights plan which events shall be
covered by the anti-dilution provisions of Section 9(a).
(c) Fundamental.Transactions. If, at any time while this Warrant is outstanding, (1) the Company
effects any merger or consolidation of the Company with or into another Person, (2) the Company
effects any sale of all or substantially all of its assets in one or a series of related
transactions, (3) any tender offer or exchange offer approved or authorized by the Board of
Directors of the Company (whether by the Company or another Person) is completed pursuant to
which holders of Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, or (4) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property, other than in connection with the
transactions contemplated by the Plan (in any such case, a “FUNDAMENTAL TRANSACTION”), then the
Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount
and kind of securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of
this Warrant (the “ALTERNATE CONSIDERATION”). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of
Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any
choice as to the securities, cash or property to be received in
EXHIBIT 2
4
a Fundamental Transaction, then the Holder shall be given the same choice as to the
Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. At the Holder’s request, any successor to the Company or surviving entity in such
Fundamental Transaction shall, issue to the Holder a new warrant substantially in the form of this
Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase
the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The terms of
any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring
any such successor or surviving entity to comply with the provisions of this paragraph (c) and
insuring that the Warrant (or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Transaction.
(d) Subsequent Equity Sales.
(i) While any portion of this Warrant is outstanding, if the Company issues any shares of
Common Stock or the Company or any subsidiary thereof issues any rights, warrants, options or other
securities or debt that is convertible into, exchangeable for, exercisable into, or otherwise
entitling any Person to acquire shares of Common Stock (any such securities, “COMMON STOCK
EQUIVALENTS”), at a price per share less than the Exercise Price (if the holder of the Common Stock
or Common Stock Equivalent so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights issued in connection with such issuance, be entitled to receive
shares of Common Stock at a price less than the Exercise Price, such issuance shall be deemed to
have occurred for less than the Exercise Price), then the Exercise Price shall be adjusted to equal
the conversion, exchange or purchase price for such Common Stock or Common Stock Equivalents
(including any reset provisions thereof) at issue and which adjusted Exercise Price shall continue
for as long as this Warrants remain outstanding. Such adjustment shall be made whenever such Common
Stock or Common Stock Equivalents are issued. The Company shall notify the Holder in writing, no
later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalent
subject to this section, indicating therein the applicable issuance price, or of applicable reset
price, exchange price, conversion price and other pricing terms.
(ii) For purposes of this subsection 9(d), the following subsections (d)(ii)(l) to (d)(ii)(6)
shall also be applicable:
(1) Issuance of Rights or Options. In case at any time the Company shall in any manner grant
(directly and not by assumption in a merger or otherwise) any warrants or other rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any stock or security
convertible into or exchangeable for Common Stock (such warrants, rights or options being called
“OPTIONS” and such convertible or exchangeable stock or securities being called “CONVERTIBLE
SECURITIES”) whether or not such Options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which Common Stock is issuable
upon the exercise of such Options or upon the conversion or exchange of such Convertible Securities
(determined by dividing (i) the sum (which sum shall constitute the applicable consideration) of
(x) the total amount, if any, received or receivable by the Company as consideration for the
granting of such Options, plus (y) the aggregate amount of additional consideration payable to the
Company upon the exercise of all such Options, plus (z), in the case of such Options which relate
to Convertible Securities, the aggregate amount of additional consideration, if any, payable upon
the issue or sale of such Convertible Securities and upon the conversion or exchange thereof, by
(ii) the total maximum number of shares of Common Stock issuable upon the exercise of such Options
or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options) shall be less than the
Exercise Price in effect immediately prior to the time of the granting of such Options, then the
total number of shares of Common Stock issuable upon the exercise of such Options or upon
conversion or exchange of the total amount of such Convertible Securities issuable upon the
exercise of such Options shall be deemed to have been issued for such price per share as of the
date of granting of such Options or the issuance of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the Exercise Price. Except as otherwise
provided in subsection 9(d)(ii)(3), no adjustment of the Exercise Price shall be made upon the
actual issue of such
EXHIBIT 2
5
Common Stock or of such Convertible Securities upon exercise of such Options or upon the actual
issue of such Common Stock upon conversion or exchange of such Convertible Securities.
(2) Issuance of Convertible Securities. In case the Company shall in any manner issue
(directly and not by assumption in a merger or otherwise) or sell any Convertible Securities,
whether or not the rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount received or receivable by the Company as consideration for
the issue or sale of such Convertible Securities, plus (y) the aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange thereof, by (ii) the
total number of shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Exercise Price in effect immediately prior to the
time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to have been issued for
such price per share as of the date of the issue or sale of such Convertible Securities and
thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise Price, provided
that (a) except as otherwise provided in subsection 9(d)(ii)(3), no adjustment of the Exercise
Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities and (b) no further adjustment of the Exercise Price shall be made by
reason of the issue or sale of Convertible Securities upon exercise of any Options to purchase any
such Convertible Securities for which adjustments of the Exercise Price have been made pursuant to
the other provisions of subsection 9(d).
(3) Change in Option Price or Conversion Rate. Upon the happening of any of the following
events, namely, if the purchase price provided for in any Option referred to in subsection
9(d)(ii)(l) hereof, the additional consideration, if any, payable upon the conversion or exchange
of any Convertible Securities referred to in subsections 9(d)(ii)(l) or 9(d)(ii)(2), or the rate at
which Convertible Securities referred to in subsections 9(d)(ii)(l) or 9(d)(ii)(2) are convertible
into or exchangeable for Common Stock shall change at any time (including, but not limited to,
changes under or by reason of provisions designed to protect against dilution), the Exercise Price
in effect at the time of such event shall forthwith be readjusted to the Exercise Price which would
have been in effect at such time had such Options or Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or conversion rate, as the case
may be, at the time initially granted, issued or sold. On the termination of any Option for which
any adjustment was made pursuant to this subsection 9(d) or any right to convert or exchange
Convertible Securities for which any adjustment was made pursuant to this subsection 9(d)
(including without limitation upon the redemption or purchase for consideration of such Convertible
Securities by the Company), the Exercise Price then in effect hereunder shall forthwith be changed
to the Exercise Price which would have been in effect at the time of such termination had such
Option or Convertible Securities, to the extent outstanding immediately prior to such termination,
never been issued.
(4) Stock Dividends. Subject to the provisions of this Section 9(d), in case the Company shall
declare a dividend or make any other distribution upon any stock of the Company (other than the
Common Stock) payable in Common Stock, Options or Convertible Securities, then any Common Stock,
Options or Convertible Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration.
(5) Consideration for Stock. In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for cash, the consideration received therefor shall be deemed to
be the net amount received by the Company therefor, after deduction therefrom of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any shares of Common Stock, Options or Convertible Securities shall
be issued or sold for a consideration other than cash, the amount of the consideration other than
cash received by the Company shall be deemed to be the fair value of such consideration as
determined in good faith by the Board of Directors of the Company, after deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any Options shall be issued in connection with the issue and sale of
other securities of the Company,
EXHIBIT 2
6
together comprising one integral transaction in which no specific consideration is allocated to
such Options by the parties thereto, such Options shall be deemed to have been issued for such
consideration as determined in good faith by the Board of Directors of the Company. If Common
Stock, Options or Convertible Securities shall be issued or sold by the Company and, in connection
therewith, other Options or Convertible Securities (the “ADDITIONAL RIGHTS”) are issued, then the
consideration received or deemed to be received by the Company shall be reduced by the fair market
value of the Additional Rights (as determined using the Black-Scholes option pricing model or
another method mutually agreed to by the Company and the Holder). The Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the Holders as to the fair market
value of the Additional Rights. In the event that the Board of Directors of the Company and the
Holders are unable to agree upon the fair market value of the Additional Rights, the Company and
the Holders shall jointly select an appraiser, who is experienced in such matters. The decision of
such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne evenly
by the Company and the Holder.
(6) Record Date. In case the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them (i) to receive a dividend or other distribution payable in Common
Stock, Options or Convertible Securities or (ii) to subscribe for or purchase Common Stock, Options
or Convertible Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
(iii) Notwithstanding the foregoing, no adjustment will be made under this Section 9(d) as a result
of: (i) the issuance of securities upon the exercise or conversion of any Common Stock Equivalents
issued by the Company prior to the date of this Agreement (but will apply to any amendments,
modifications and reissuances thereof), (ii) the grant of options or warrants, or the issuance of
additional securities, under any duly authorized company stock option, stock incentive plan,
restricted stock plan or stock purchase plan in existence on the Closing Date of the
Reorganization, or (iii) the issuance of Common Stock to Signature Group Holdings, LLC, the TOPrS
Group or their affiliates in connection with the Plan (each, an “EXEMPTED ISSUANCE”).
(e) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraph (a) of this Section, the number of Warrant Shares that may be purchased upon
exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant
Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.
(f) Calculations. All calculations under this Section 9 shall be made to the nearest cent or
the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at
any given time shall not include shares owned or held by or for the account of the Company, and the
disposition of any such shares shall be considered an issue or sale of Common Stock.
(g) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9,
the Company at its expense will promptly compute such adjustment in accordance with the terms of
this Warrant and prepare a certificate setting forth such adjustment, including a statement of the
adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable
upon exercise of this Warrant (as applicable), describing the transactions giving rise to such
adjustments and showing in detail the facts upon which such adjustment is based. Upon written
request, the Company will promptly deliver a copy of each such certificate to the Holder and to the
Company’s transfer agent.
(h) Notice of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common Stock, including
without limitation any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits shareholder approval for any Fundamental Transaction or (iii) authorizes
the voluntary dissolution,
EXHIBIT 2
7
liquidation or winding up of the affairs of the Company, then the Company shall deliver to the
Holder a notice describing the material terms and conditions of such transaction, at least 20
calendar days prior to the applicable record or effective date on which a Person would need to hold
Common Stock in order to participate in or vote with respect to such transaction, and the Company
will take all steps reasonably necessary in order to insure that the Holder is given the practical
opportunity to exercise this Warrant prior to such time so as to participate in or vote with
respect to such transaction; provided, however, that the failure to deliver such notice or any
defect therein shall not affect the validity of the corporate action required to be described in
such notice.
9. Payment of Exercise Price. The Holder may pay the Exercise Price in one of the following
manners:
(a) Cash Exercise. The Holder may deliver immediately available funds; or
(b) Cashless Exercise. The Holder may notify the Company in an Exercise Notice of its election
to utilize cashless exercise, in which event the Company shall issue to the Holder the number of
Warrant Shares determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the Holder.
Y = the number of Warrant Shares with respect to which this Warrant is being exercised.
A = the average of the closing prices for the five Trading Days immediately prior to (but not
including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to
have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued.
10. No Fractional Shares. No fractional shares of Warrant Shares will be issued in connection
with any exercise of this Warrant. In lieu of any fractional shares which would, otherwise be
issuable, the Company shall pay cash equal to the product of such fraction multiplied by the
closing price of one Warrant Share as reported by the applicable Trading Market on the date of
exercise.
11. Notices. Any and all notices or other communications or deliveries hereunder (including,
without limitation, any Exercise Notice) shall be in writing and shall he deemed given and
effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m.
(pacific time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in this
Section on a day that is not a Trading Day or later than 6:30 p.m. (Pacific time) on any Trading
Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized
overnight courier
service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be: (i) if to the Company, to Reorganized Debtor, 2425
Olympic Boulevard, Santa Monica, CA 90404 Attn:
[ ]
Fax:
[ ],
or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such other address or facsimile
number as the Holder may provide to the Company in accordance with this Section.
12. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 30 days’
notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the
Company or any new warrant agent may be merged or any corporation resulting from any
EXHIBIT 2
8
consolidation to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly cause notice of
its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder’s last address as shown on the Warrant Register.
13. Miscellaneous.
(a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall
be construed to give to any Person other than the Company and the Holder any legal or equitable
right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder and their successors and assigns.
(b) All questions concerning the construction, validity, enforcement and interpretation of
this Warrant shall be governed by and construed and enforced in accordance with the internal laws
of the State of California, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations, enforcement and defense of
this Warrant and the transactions herein contemplated (“PROCEEDINGS”) (whether brought against a
party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the Counties of Los Angeles or Orange, California (the
“CALIFORNIA COURTS”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of
the California Courts for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any California Court, or that such Proceeding has been commenced in an improper or
inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial
by jury in any legal proceeding arising out of or relating to this Warrant or the transactions
contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this
Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for
its attorney’s fees and other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
(c) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.
(d) In case anyone or more of the provisions of this Warrant shall be invalid or unenforceable
in any respect, the validity and enforceability of the remaining terms and provisions of this
Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefore, and upon so agreeing, shall incorporate such substitute provision in this
Warrant.
(e) Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Plan.
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SIGNATURE PAGE FOLLOWS]
EXHIBIT 2
9
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.
REORGANIZED DEBTOR
By:
Name:
Title:
EXHIBIT 2
10
EXERCISE NOTICE
To REORGANIZED DEBTOR:
The undersigned hereby irrevocably elects to purchase
___ shares of common stock, par value $1.03 per share, of REORGANIZED DEBTOR (“COMMON STOCK”), pursuant to Warrant No. [ ],
originally issued [ ] (the “WARRANT”), and, if such Holder is not utilizing the cashless exercise
provisions set forth in the Warrant, encloses herewith $ in cash, certified or official bank check
or checks or other immediately available funds, which sum represents the aggregate Exercise Price
(as defined in the Warrant) for the number of shares of Common Stock to which this Exercise Notice
relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant.
The undersigned requests that certificates for the shares of Common Stock issuable upon this
exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
(Please print name and address)
EXHIBIT 2
11
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto ___
the right represented by the within Warrant to purchase
___
shares of Common Stock of REORGANIZED DEBTOR to which the within Warrant relates and appoints
___ attorney to transfer said right on the books of the Company with full power of substitution in the premises.
Dated: ___, ___
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
Address of Transferee:
In the presence of:
EXHIBIT 2
12
EXHIBIT 3
INVESTMENT ADVISORY MANAGEMENT AGREEMENT
Agreement is made this [ ] day of [ ,
],
by and between the Corporation (as defined below) and Credit Partners Management, Inc. (the “Adviser”).
WHEREAS, Signature Group Holdings, LLC has submitted a plan of organization for Fremont
General Corporation, a Nevada corporation (prior to reorganization, the “Debtor”, as reorganized,
the “Corporation”);
WHEREAS, the Adviser is a newly organized investment adviser that has registered under the
Investment Advisers Act of 1940 (the “Advisers Act”); and
WHEREAS, the Corporation desires to retain the Adviser to furnish investment advisory
services to the Corporation on the terms and conditions hereinafter set forth, and the Adviser
wishes to be retained to provide such services.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the parties hereby agree as follows:
1. Duties of the Adviser.
(a) The Corporation hereby engages the Adviser to act as the investment adviser to the
Corporation and to manage the investment and reinvestment of the assets of the Corporation,
subject to the supervision of the Board of Directors of the Corporation, for the period and upon
the terms herein set forth (i) in accordance with the investment objective, policies and
restrictions to which it is subject (ii) during the term of this Agreement in accordance with all
applicable federal and state laws, rules and regulations, and the Corporation’s charter and
bylaws.
Without limiting the generality of the foregoing, the Adviser shall, during the term and
subject to the provisions of this Agreement:
|
(i) |
|
identify, evaluate and. negotiate the structure of the investments made by the
Corporation; |
|
|
(ii) |
|
determine the investments and other assets that the Corporation will purchase,
retain, or sell; |
|
|
(iii) |
|
determine the composition of the portfolio of the Corporation, the nature and
timing of the changes therein and the manner of implementing such changes; |
|
|
(iv) |
|
close and monitor the Corporation’s investments; |
|
|
(v) |
|
manage, service, administer, and collect payments related to the Corporation’s
investments; |
|
|
(vi) |
|
negotiate, restructure, settle and/or compromise any loan or other debt
obligations related to the investment portfolio; |
|
|
(vii) |
|
advise a limited staff of FRC employees who will be employed directly by the
Corporation to continue with the orderly wind-down of the Debtor and FRC’s legacy
business activities; |
|
|
(viii) |
|
subject to the oversight of the Corporation’s board of directors, engage,
interact and supervise any financial advisors, legal counsel, accountants, or other outside
consultants engaged by the Corporation to continue with the orderly wind-down of the
Debtor and FRC’s legacy business activities; |
|
|
(ix) |
|
subject to the oversight of the Corporation’s board of directors, engage, interact
and supervise any financial advisors, legal counsel, accountants, or other outside |
EXHIBIT 3
1
|
|
|
consultants engaged by the Corporation to facilitate the
Corporation’s return to compliance with the SEC and any other governmental agencies; |
|
|
(x) |
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file, continue, amend and modify any financing statements, Uniform Commercial
Code filings, mortgages, deeds, title policies, etc. related to any liens or
collateral associated with any loan or other debt obligations related to the
investment portfolio; and |
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(xi) |
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provide the Corporation with such other investment advisory, research and
related services as the Corporation may, from time to time, reasonably require for
the investment of its funds. |
The Adviser shall have the power and authority on behalf of the Corporation to effectuate its
investment decisions for the Corporation, including the execution and delivery of all documents
relating to the Corporation’s investments and the placing of orders for other purchase or sale
transactions on behalf of the Corporation. In the event that the Corporation determines to acquire
debt financing, the Adviser will arrange for such financing on the Corporation’s behalf, subject
to the oversight and approval of the Corporation’s Board of Directors. If it is necessary for the
Adviser to make investments on behalf of the Corporation through a special purpose vehicle, the
Adviser shall have authority to create or arrange for the creation of such special purpose vehicle
and to make such investments through such special purpose vehicle in accordance with the
Investment Company Act of 1940.
(b) Subject to the requirements of applicable law, the Adviser is hereby authorized to enter
into one or more sub-advisory agreements with other investment advisers (each, a “Sub-Adviser”)
pursuant to which the Adviser may obtain the services of the Sub-Adviser(s) to assist the Adviser
in fulfilling its responsibilities hereunder. Specifically, the Adviser may retain a Sub-Adviser
to recommend specific securities or other investments based upon the Corporation’s investment
objective and policies, and work, along with the Adviser, in structuring, negotiating, arranging
or effecting the acquisition or disposition of such investments and monitoring investments on
behalf of the Corporation, subject to the oversight of the adviser and the Corporation. The
Adviser, and not the Corporation, shall be responsible for any compensation payable to any
Sub-Adviser. Any sub-advisory agreement entered into by the Adviser shall be in accordance with
the requirements of the Investment Company Act and other applicable federal and state law.
(c) The Adviser shall for all purposes herein provided be deemed to be an independent
contractor and, except as expressly provided or authorized herein, shall have no authority to act
for or represent the Corporation in any way or otherwise be deemed an agent of the Corporation.
The Advisor agrees during the term hereof to render the services described herein for the
compensation provided herein.
(d) The Adviser shall keep and preserve for the period required by the Investment Company Act
any books and records relevant to the provision of its investment advisory services to the
Corporation and shall specifically maintain all books and records with.respect to the
Corporation’s portfolio transactions and shall render to the Corporation’s Board of Directors such
periodic and special reports as the Board may reasonably request. The Adviser agrees that all
records that it maintains for the Corporation are the property of the Corporation and will
surrender promptly to the Corporation any such records upon the Corporation’s request, provided
that the Adviser may retain a copy of such records.
2. Corporation’s Responsibilities and Expenses Payable by the Corporation. All investment
professionals of the Adviser and their respective staffs, when and to the extent engaged in
providing investment advisory and management services hereunder, and the compensation and routine
overhead expenses of such personnel allocable to such services, will be provided and paid for by
the Adviser and not by the Corporation; provided, however that the Adviser shall not pay any
individual investment professional a base salary exceeding $150,000 per annum in compensation for
such professional’s services to the Corporation during the Initial Term. The Corporation’s board
of
EXHIBIT 3
2
directors shall have the authority to award bonuses to the Advisor’s professionals directly
pursuant to the Corporation’s incentive plans as in effect from time to time. The Corporation will
bear all other costs and expenses of its operations and transactions, including (without
limitation) those relating to: organization and offering; calculating the Corporation’s net asset
value (including the cost and expenses of any independent valuation firm); expenses incurred by
the Adviser payable to third parties, including agents, consultants or other advisors, in
monitoring financial and legal affairs for the Corporation and in monitoring the Corporation’s
investments and performing due diligence on its prospective portfolio companies; interest payable
on debt, if any, incurred to finance the Corporation’s investments; offerings of the Corporation’s
common stock and other securities; investment advisory and management fees; administration fees,
if any, payable under any applicable administration agreement between the Corporation and the
Corporation’s administrator; fees payable to third parties, including agents, consultants or other
advisors, relating to, or associated with, evaluating and making investments; transfer agent and
custodial fees; federal and state registration fees; all costs of registration and listing the
Corporation’s shares on any securities exchange; federal, state and local taxes; independent
directors’ fees and expenses; costs of preparing and filing reports or other documents required by
the Securities and Exchange Commission; costs of any reports, proxy statements or other notices to
stockholders, including printing costs; the Corporation’s allocable portion of the fidelity bond,
directors and officers/errors and omissions liability insurance, and any other insurance premiums;
direct costs and expenses of administration, including printing, mailing, long distance telephone,
copying, secretarial and other staff, independent auditors and outside legal costs; and all other
expenses incurred by the Corporation or the administrator in connection with administering the
Corporation’s business, including payments under any applicable administration agreement between
the Corporation its administrator based upon the Corporation’s allocable portion of the
administrator’s overhead in performing its obligations under an administration agreement (if
applicable), including rent and the allocable portion of the cost of the Corporation’s chief
compliance officer and chief financial officer and their respective staffs.
3. Compensation of the Adviser. The Corporation agrees to pay, and the Adviser agrees to
accept, as compensation for the services provided by the Adviser hereunder, a management fee (the
“Management Fee”) to be agreed to by the Adviser and the Corporation’s board of directors at the
beginning of each year of the Term. The Management Fee during the initial term shall be based upon
an expense budget setting forth projected, commercially reasonable operating expenses to be
incurred by the Adviser in its management of the Corporation. The Corporation shall make any
payments due hereunder to the Adviser or to the Adviser’s designee as the Adviser may otherwise
direct.
The Management Fee shall be the Adviser’s sole source of payment from the Corporation for: (i)
compensating the Adviser’s investment professionals and their respective staffs, when and to the
extent engaged in providing investment advisory and management services hereunder, and (ii) the
compensation and routine overhead expenses of such personnel allocable to such services, in each
case pursuant to the Adviser’s obligations under Section 2 hereof.
4. Covenants of the Adviser. The Adviser covenants that it is registered as an investment
adviser under the Advisers Act. The Adviser agrees that its activities will at all times be in
compliance in all material respects with all applicable federal and state laws governing its
operations and investments.
5. Excess Brokerage Commissions. The Adviser is hereby authorized, to the fullest extent
now or hereafter permitted by law, to cause the Corporation to pay a member of a national
securities exchange, broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another member of such exchange, broker or
dealer would have charged for effecting that transaction, if the Adviser determines in good faith,
taking into account such factors as price (including the applicable brokerage commission or dealer
spread), size of order, difficulty of execution, and operational facilities of the firm and the
firm’s risk and skill in positioning blocks of securities, that such amount of commission is
reasonable in relation to the value of the brokerage and/or research services provided by such
member, broker or dealer, viewed in terms of either that
EXHIBIT 3
3
particular transaction or its overall responsibilities with respect to the Corporation’s
portfolio, and constitutes the best net results for the Corporation.
6. Non-exclusive Services. The services of the Adviser to the Corporation are not
exclusive, and the Adviser may engage in any other business or render similar or different services
to others including, without limitation, the direct or indirect sponsorship or management of other
investment based accounts or commingled pools of capital, however structured, having investment
objectives similar to those of the Corporation, so long as its services to the Corporation
hereunder are not impaired thereby, and nothing in this Agreement shall limit or restrict the right
of any manager, partner, officer or employee of the Adviser to engage in any other business or to
devote his or her time and attention in part to any other business, whether of a similar or
dissimilar nature, or to receive any fees or compensation in connection therewith (including fees
for serving as a director of, or providing consulting services to, one or more of the Corporation’s
portfolio companies, subject to applicable law). So long as this Agreement or any extension,
renewal or amendment remains in effect, the Adviser shall be the only investment adviser for the
Corporation, subject to the Adviser’s right to enter into sub- advisory agreements. The Adviser
assumes no responsibility under this Agreement other than to render the services called for
hereunder. It is understood that directors, officers, employees and stockholders of the Corporation
are or may become interested in the Adviser and its affiliates, as directors, officers, employees,
partners, stockholders, members, managers or otherwise, and that the Adviser and directors,
officers, employees, partners, stockholders, members and managers of the Adviser and its affiliates
are or may become similarly interested in the Corporation as stockholders or otherwise.
7. Responsibility of Dual Directors, Officers and/or Employees. If any person who is a
manager, partner, officer or employee of the Adviser or the administrator is or becomes a
director, officer and/or employee of the Corporation and acts as such in any business of the
Corporation, then such manager, partner, officer and/or employee of the Adviser or the
administrator shall be deemed to be acting in such capacity solely for the Corporation, and not as
a manager, partner, officer or employee of the Adviser or the administrator or under the control
or direction of the Adviser or the administrator, even if paid by the Adviser or the
administrator.
8. Limitation of Liability of the Adviser; Indemnification. The Adviser (and its officers,
managers, partners, agents, employees, controlling persons, members and any other person or entity
affiliated with the Adviser, including without limitation its general partner and the
administrator) shall not be liable to the Corporation for any action taken or omitted to be taken
by the Adviser in connection with the performance of any of its duties or obligations under this
Agreement or otherwise as an investment adviser of the Corporation, except to the extent required
under applicable law concerning loss resulting from a breach of fiduciary duty (as the same is
finally determined by judicial proceedings) with respect to the receipt of compensation for
services, and the Corporation shall indemnify, defend and protect the Adviser (and its officers,
managers, partners, agents, employees, controlling persons, members and any other person or entity
affiliated with the Adviser, including without limitation its general partner and the
administrator, each of whom shall be deemed a third party beneficiary hereof) (collectively, the
“Indemnified Parties”) and hold them harmless from and against all damages, liabilities, costs and
expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred
by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit,
investigation or other proceeding (including an action or suit by or in the right of the
Corporation or its security holders) arising out of or otherwise based upon the performance of any
of the Adviser’s duties or obligations under this Agreement or otherwise as an investment adviser
of the Corporation. Notwithstanding the preceding sentence of this Paragraph 8 to the contrary,
nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or
entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any
liability to the Corporation or its security holders to which the Indemnified Parties would
otherwise be subject by reason of willful misfeasance, bad faith or negligence in the performance
of the Adviser’s duties or by reason of the reckless disregard of the Adviser’s duties and
obligations under this Agreement (as the same shall be determined in accordance with the applicable
law and any
EXHIBIT 3
4
interpretations or guidance by the Securities and Exchange Commission or its staff).
9. Effectiveness, Duration and Termination of Agreement. This Agreement shall become
effective as of the first date above written. This Agreement shall remain in effect through
December 31, 2010 (the “Initial Term”), and thereafter shall continue automatically for successive
one-year Terms, provided that such continuance is specifically approved at least annually by the
vote of the Corporation’s Board of Directors, or by the vote of a majority of the outstanding
voting securities of the Corporation. This Agreement may be terminated at any time, without the
payment of any penalty, upon 60 days’ written notice, by the vote of a majority of the outstanding
voting securities of the Corporation, by the vote of the Corporation’s Directors or by the Adviser.
This Agreement will automatically terminate in the event of its assignment. The provisions of
Paragraph 8 of this Agreement shall remain in full force and effect, and the Adviser shall remain
entitled to the benefits thereof, notwithstanding any termination of this Agreement. Further,
notwithstanding the termination or expiration of this Agreement as aforesaid, the Adviser shall be
entitled to any amounts owed under Section 3 through the date of termination or expiration and
Section 8 shall continue in force and effect and apply to the Adviser and its representatives as
and to the extent applicable.
10. Notices. Any notice under this Agreement shall be given in writing, addressed and
delivered or mailed, postage prepaid, to the other party at its principal office.
11. Amendments. This Agreement may be amended by mutual consent, subject to any applicable
requirements of the Investment Company Act of 1940.
12. Entire Agreement; Governing Law. This Agreement contains the entire agreement of the
parties and supersedes all prior agreements, understandings and arrangements with respect to the
subject matter hereof. This Agreement shall be construed in accordance with the laws of the State
of California.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
EXHIBIT 3
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on
the date above written.
“REORGANIZED DEBTOR”
By:
Name:
Title:
CREDIT PARTNERS MANAGEMENT, INC.
By:
Name:
Title:
EXHIBIT 3
6
EXHIBIT 4
INDENTURE
EXHIBIT 4
[FREMONT GENERAL CORPORATION]
TO
[ ], Trustee
Indenture
Dated as of , 2010
9.0% Notes due December 31, 2016
EXHIBIT 4
TABLE OF CONTENTS
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RECITALS OF THE COMPANY |
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1 |
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ARTICLE ONE Definitions and Other Provisions of General Application |
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2 |
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SECTION 101. Definitions |
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2 |
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SECTION 102. Compliance Certificates and Opinions |
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6 |
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SECTION 103. Form of Documents Delivered to Trustee |
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6 |
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SECTION 104. Acts of Holders; Record Dates |
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SECTION 105. Notices to Trustee and the Company |
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SECTION 106. Notice to Holders; Waiver |
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8 |
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SECTION 107. Conflict with Trust Indenture Act |
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SECTION 108. Effect of Headings and Table of Contents |
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8 |
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SECTION 109. Separability Clause |
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SECTION 110. Benefits of Indenture |
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SECTION 111. Governing Law |
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SECTION 112. Legal Holidays |
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SECTION 113. Indenture and Notes Solely Corporate Obligations |
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SECTION 114. No Security Interest Created |
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ARTICLE TWO Security Forms |
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SECTION 201. Forms Generally |
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SECTION 202. Form of Face of Security |
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SECTION 203. Form of Reverse of Security |
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SECTION 204. Form of Trustee’s Certificate of Authentication |
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ARTICLE THREE The Securities |
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13 |
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SECTION 301. Title and Terms |
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SECTION 302. Denominations |
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SECTION 303. Execution, Authentication, Delivery and Dating |
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SECTION 304. Temporary Securities |
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SECTION 305. Registration; Registration of Transfer and Exchange |
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SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities |
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SECTION 307. Payment of Interest; Interest Rights Preserved |
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SECTION 308. Persons Deemed Owners |
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SECTION 309. Cancellation |
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SECTION 310. Computation of Interest |
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SECTION 311. CUSIP Numbers |
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SECTION 312. Global Securities |
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SECTION 313 Restrictions on Transfer |
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ARTICLE FOUR Satisfaction and Discharge; Defeasance |
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EXHIBIT 4
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SECTION 401. Satisfaction and Discharge of Indenture |
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SECTION 402. Defeasance and Discharge |
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SECTION 403. Covenant Defeasance |
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SECTION 404. Conditions to Defeasance or Covenant Defeasance |
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SECTION 405. Application of Trust Money |
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SECTION 406. Indemnity for U.S. Government Obligations |
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ARTICLE FIVE Remedies |
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SECTION 501. Events of Default |
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SECTION 502. Acceleration of Maturity; Rescission and Annulment |
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee |
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SECTION 504. Trustee May File Proofs of Claim |
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SECTION 505. Trustee May Enforce Claims Without Possession of Securities |
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SECTION 506. Application of Money Collected |
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SECTION 507. Limitation on Suits |
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SECTION 508. Unconditional Right of Holders to Receive Principal and Interest |
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SECTION 509. Restoration of Rights and Remedies |
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SECTION 510. Rights and Remedies Cumulative |
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SECTION 511. Delay or Omission Not Waiver |
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SECTION 512. Control by Holders |
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SECTION 513. Waiver of Past Defaults |
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SECTION 514. Undertaking for Costs |
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SECTION 515. Waiver of Stay or Extension Laws |
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ARTICLE SIX The Trustee |
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SECTION 601. Certain Duties and Responsibilities |
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SECTION 602. Notice of Defaults |
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SECTION 603. Certain Rights of Trustee |
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SECTION 604. Not Responsible for Recitals or Issuance of Securities |
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SECTION 605. May Hold Securities |
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SECTION 606. Money Held in Trust |
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SECTION 607. Compensation; Reimbursement; and Indemnity |
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SECTION 608. Disqualification; Conflicting Interests |
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SECTION 609. Corporate Trustee Required; Eligibility |
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SECTION 610. Resignation and Removal; Appointment of Successor |
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SECTION 611. Acceptance of Appointment by Successor |
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SECTION 612. Merger, Conversion, Consolidation or Succession to Business |
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SECTION 613. Preferential Collection of Claims Against Company |
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ARTICLE SEVEN Holders’ Lists and Reports by Trustee and Company |
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SECTION 701. Company to Furnish Trustee Names and Addresses of Holders |
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EXHIBIT 4
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SECTION 702. Preservation of Information; Communications to Holders |
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SECTION 703. Reports by Trustee |
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SECTION 704. Reports by Company |
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ARTICLE EIGHT Consolidation, Merger, Conveyance, Transfer or Lease |
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SECTION 801. Successor Substituted |
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ARTICLE NINE Supplemental Indentures |
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SECTION 901. Supplemental Indentures Without Consent of Holders |
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SECTION 902. Supplemental Indentures with Consent of Holders |
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SECTION 903. Execution of Supplemental Indentures |
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SECTION 904. Effect of Supplemental Indentures |
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SECTION 905. Conformity with Trust Indenture Act |
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SECTION 906. Reference in Securities to Supplemental Indentures |
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SECTION 907. Notice of Supplemental Indenture |
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ARTICLE TEN Covenants; Representations and Warranties |
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SECTION 1001. Payment of Principal and Interest |
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SECTION 1002. Maintenance of Office or Agency |
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SECTION 1003. Money for Security Payments to Be Held in Trust |
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SECTION 1004. Statement by Officers as to Default |
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SECTION 1005. Existence |
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SECTION 1006. Maintenance of Properties |
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SECTION 1007. Payment of Taxes and Other Claims |
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SECTION 1008. Additional Covenants |
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SECTION 1009. Waiver of Certain Covenants |
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ARTICLE ELEVEN Redemption of Securities |
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39 |
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SECTION 1101. Optional Redemption; Conditions to Optional Redemption |
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SECTION 1102. Applicability of Article |
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SECTION 1103. Election to Redeem; Notice to Trustee |
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SECTION 1104. Selection by Trustee of Securities to Be Redeemed |
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40 |
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SECTION 1105. Notice of Redemption |
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40 |
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SECTION 1106. Deposit of Redemption Price |
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SECTION 1107. Securities Payable on Redemption Date |
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SECTION 1108. Securities Redeemed in Part |
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41 |
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ARTICLE TWELVE |
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41 |
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Meetings Of Holders |
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41 |
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SECTION 1201. Purposes for Which Meetings May Be Called |
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41 |
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SECTION 1202. Call, Notice and Place of Meetings |
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SECTION 1203. Persons Entitled to Vote at Meetings |
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42 |
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EXHIBIT 4
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SECTION 1204. Quorum; Action |
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42 |
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SECTION 1205. Determination of Voting Rights; Conduct and Adjournment of Meetings |
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SECTION 1206. Counting Votes and Recording Action of Meetings |
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43 |
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ARTICLE THIRTEEN |
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Expenses |
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SECTION 1301. Payment Upon Resignation or Removal |
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EXHIBIT 4
iv
INDENTURE, dated as of , 2010, between [Fremont General Corporation],
a corporation duly organized and existing under the laws of the State of Nevada (herein called the
“Company”), having its principal office at [ ], and [ ], a [ ], as
Trustee (herein called the “Trustee”).
RECITALS OF THE COMPANY
WHEREAS, pursuant to an Indenture dated as of March 6, 1996 between the Company and First
Interstate Bank of California, as Trustee (the “Old
Indenture”), the Company issued
$100,000,000 aggregate principal amount of its 9% Junior Subordinated Debentures due March 31,
2026 (the “Old Securities”) and in satisfaction of the purchase price for such Old
Securities, Fremont Financing General Financing I, a Delaware statutory trust (“Fremont
Financing”) issued to the Company common securities certificates evidencing an 100% ownership
interest in Fremont Financing;
WHEREAS Fremont Financing issued $100,000,000 of its 9% Trust Originated Preferred Securities
(the “Preferred Securities”) with a liquidation preference of $25 per Preferred Security;
WHEREAS, the Company guaranteed (i) the payment of distributions, (ii) payment of the
redemption price and (iii) any liquidation payments, in each case with respect to the Preferred
Securities;
WHEREAS, the Company [and certain of its Subsidiaries] filed for reorganization under chapter
11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy
Court for the Central District of California, Santa Ana Division (the “Bankruptcy Court”);
WHEREAS
by order, dated
,
2010, the Bankruptcy Court has confirmed the
Company’s plan of reorganization (the “Plan”) in accordance with Section 1129 of the Bankruptcy
Code and such Plan has become effective as of , 2010 (the “Effective Date”);
WHEREAS, as part of the Plan, the Company has agreed, among other forms of
consideration, to issue $39,000,000 of its Securities (hereinafter defined) to Holders of the
Preferred Securities in satisfaction of all rights of payment from the Company under the Old
Securities and the Preferred Securities for the period prior to the Effective Date;
WHEREAS, this Indenture is subject to the provisions of the Trust Indenture Act of 1939, as
amended, which are required to be part of this Indenture and shall, to the extent applicable, be
governed by such provisions;
WHEREAS, the Company has duly authorized the creation of an issue of its 9% Notes due
December 31, 2016 (the “Securities”), of substantially the tenor and amount hereinafter set forth
and to provide therefor the Company has duly authorized the execution and delivery of this
Indenture; and
WHEREAS, all things necessary to make the Securities, when executed by the Company and
authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the
Company, and to make this Indenture a valid agreement of the Company, in accordance with their and
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holder
thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
EXHIBIT 4
1
ARTICLE ONE
Definitions and Other Provisions of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles;
(4) the words “herein,” “hereof and “hereunder” and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or other
subdivision;
(5) a reference to any Person shall include its successors and assigns;
(6) a reference to any agreement or instrument shall mean such agreement or
instrument as supplemented, modified, amended or amended and restated and in effect from
time to time;
(7) a reference to any statute, law, rule or regulation, shall include any amendments
thereto applicable to the relevant Person, and any successor statute, law, rule or
regulation; and
(8) a reference to any particular rating category shall be deemed to include any
corresponding successor category, or any corresponding rating category issued by a
successor or subsequent rating agency.
“Act,” when used with respect to any Holder, has the meaning specified in Section 104.
“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 the purposes of this definition, “control” when used with respect to any specified
Person means the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise; and the
terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Authenticating Agent” means any Person authorized by the Trustee to act on behalf of the
Trustee to authenticate Securities.
“Board of Directors” means either the board of directors of the Company or any duly
authorized committee of that board as the context requires.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the Trustee.
“Business Day” means any day other than a Saturday or Sunday or other day on which banking
institutions in the City of New York are authorized or required by law or executive order to !
remain closed or a day on which the Corporate Trust Office of the Trustee is closed for
business.
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“Change in Control” means (A) a direct or indirect sale, transfer, or other disposition,
in one or a series of related transactions, of all or substantially all of the assets of the
Company, (B) as a result of a transaction or series of transactions following which the percentage
of stock of the Company owned by one or more persons holding 5% or more of the stock of the Company
(before or after such transaction or series of transactions) has increased by more than 50
percentage points as compared to such person(s) ownership prior to such transaction or series of
transactions, i.e., a change of ownership under Section 382(g) of the Internal Revenue Code of
1986, as amended, or (C) the consummation of any transaction, the result of which is that any
Person becomes the owner, directly or indirectly, of more than 50% of the equity interests of the
Company.
“Commission” means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
“Common Stock” includes any capital stock of any class of the Company which has no preference
in respect of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject to redemption by
the Company.
“Company” means the Person named as the “Company” in the first paragraph of this instrument
until a successor Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Company” shall mean such successor Person.
“Company Request” or “Company Order” means a written request or order signed in the name of
the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
“Corporate Trust Office” means the principal office of the Trustee at which at any particular
time its corporate trust business shall be administered. As of the date hereof, the Corporate
Trust Office of the Trustee is located at [ ].
“Covenant Defeasance” has the meaning specified in Section 403.
“Defaulted Interest” has the meaning specified in Section 307.
“Defeasance” has the meaning specified in Section 402.
“Depositary” means, with respect to Securities issuable in whole or in part in the form of
one or more Global Securities, a clearing agency registered under the Exchange Act that is
designated to act as Depositary for such Securities.
“Event of Default” has the meaning specified in Section 501.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and
any successor legislation.
“Global Security” means a Security that evidences all or part of the Securities and is
authenticated and delivered to, and registered in the name of, the Depositary for such Securities
or a nominee thereof.
“Holder” means a Person in whose name a Security is registered in the Security Register.
“Indebtedness” means, with respect to the Company and its Subsidiaries, (i) the principal,
premium, if any, and interest in respect of (A) indebtedness of the Company and its Subsidiaries,
for money borrowed and (B) indebtedness evidenced by securities, debentures, bonds or other
similar
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instruments issued by the Company and its Subsidiaries and other notes payable, short term
debt and open letters of credit of the Company, (ii) all capital lease obligations of the Company,
(iii) all obligations of the Company issued or assumed as the deferred purchase price of property,
all conditional sale obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the ordinary course of
business), (iv) all obligations of the Company for the reimbursement on any letter of credit,
banker’s acceptance, security purchase facility or similar credit transaction, (v) all obligations
arising under any rate or basis swap, forward contract, commodity swap or option, equity or equity
index swap or option, bond, note or bill option, interest rate option, foreign currency exchange
transaction, cross currency rate swap, currency option, cap, collar or floor transaction, swap
option, synthetic trust product, synthetic lease or any similar transaction or agreement, (vi)
all obligations of other Persons for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise including all obligations of the Company and its Subsidiaries to
insure specified levels of equity capital for another person or otherwise to maintain the net worth
or solvency of another person and (vii) all obligations of the type referred to in clauses (i)
through (vi) above of other Persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company).
“Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to
the applicable provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of
and govern this instrument and any such supplemental indenture, respectively.
“Interest Payment Date,” when used with respect to any installment of interest on a
Security, means the date specified in such Security as the fixed date on which an installment of
interest with respect to the Securities is due and payable.
“Maturity,” when used with respect to any Security, means the date on which the principal of
such Security becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
“Officers’ Certificate” means a certificate signed by (a) the Chairman of the Board, a Vice
Chairman of the Board, the President or a Vice President, and (b) by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee.
One of the officers signing an Officers’ Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company. Any Officers’ Certificate
delivered with respect to compliance with a condition or covenant provided for in this Indenture
shall include:
(a) a statement that each officer signing the Officers’ Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or investigation
undertaken by each officer in rendering the Officers’ Certificate;
(c) a statement that each such officer has made such examination or investigation as,
in such officer’s opinion, is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such condition or
covenant has been complied with.
“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company
(and who may be an employee of the Company), and who shall be reasonably acceptable to the
Trustee. An opinion of counsel may rely on certificates as to matters of fact.
“Outstanding,” when used with respect to Securities, means, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture, except: (i) any such
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Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(ii) any such Securities for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and (iii) any such Securities which have been paid
pursuant to Section 306, or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations
of the Company.
“Paying Agent” means any Person authorized by the Company to pay the principal of or interest
on any Securities on behalf of the Company.
“Person” means any individual, corporation, partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
“Plan of Reorganization” means Signature Group Holdings, LLC’s Chapter 11 Plan of
Reorganization of Fremont General Corporation Joined By James Mclntyre As Co-Plan Proponent, Dated
April 26, 2010, including, without limitation, all exhibits, supplements, appendices, and schedules
hereto, either in its present form or as it may be altered, amended, or modified from time to time.
“Predecessor Security” of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under Section 306 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Security.
“Redemption Date,” when used with respect to any Security to be redeemed, means the date
fixed for such redemption by or pursuant to this Indenture.
“Redemption Price,” when used with respect to any Security to be redeemed, means the price at
which it is to be redeemed pursuant to this Indenture.
“Regular Record Date” for the interest payable on any Interest Payment Date means the
Business Day next preceding such Interest Payment Date.
“Responsible Officer,” when used with respect to the Trustee, means the chairman or any
vice-chairman of the board of directors, the chairman or any vice-chairman of the executive
committee of the board of directors, the chairman of the trust committee, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any
trust officer or assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and familiarity with the
particular subject.
“Securities” has the meaning specified in the Recitals to this instrument.
“Securities Act” means the Securities Act of 1933, as amended.
“Security Register” and “Security Registrar” have the respective meanings specified in
Section 305.
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“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 307.
“Stated Maturity,” when used with respect to any Security or any installment of interest
thereon, means the date specified in such Security as the date on which the principal, together
with any accrued and unpaid interest, of such Security or such installment of interest is due and
payable.
“Subsidiary” means a corporation more than 50% of the outstanding voting stock of which is
owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock”
means stock which ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of any contingency.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean such successor Trustee.
“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of
which this instrument was executed; provided, however, that in the event the Trust Indenture Act
of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any
such amendment, the Trust Indenture Act of 1939 as so amended.
“United States”, except as otherwise provided in or pursuant to this Indenture or any
Security, means the United States of America (including the states thereof and the District of
Columbia), its territories and possessions and other areas subject to
its jurisdiction.
“U.S. Government Obligations” has the meaning specified in Section 404.
“Vice President,” when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the
title “vice president.”
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any action under any
provision of this Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall
be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or
an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the
Trust Indenture Act and any other requirement set forth in this Indenture.
SECTION
103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as it relates
to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an officer or officers
of the Company stating that the information with respect to such factual matters is in the
possession of the Company,
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unless such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the Trustee at its Corporate
Trust Office and, where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred
to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day
as the record date for the purpose of determining the Holders entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders. If not set by the Company
prior to the first solicitation of a Holder made by any Person in respect of any such action, or,
in the case of any such vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list of Holders required to be
provided pursuant to Section 701) prior to such first solicitation or vote, as the case may be.
With regard to any record date, only the Holders on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company
in reliance thereon, whether or not notation of such action is made upon such Security.
SECTION 105. Notices to Trustee and the Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or furnished to, or
filed with:
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(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, [Attention: ]; or
(2) the Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
Notwithstanding anything to the contrary set forth in this Indenture, any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other document provided or
permitted under this Indenture shall not be deemed to be made, given, filed or furnished to the
Trustee unless made, given, filed or furnished in writing to the Trustee at its Corporate Trust
Office.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his address as it appears
in the Security Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause
it shall be impracticable to give such notice by mail, then such notification as shall be made
with the approval of the Trustee shall constitute a sufficient notification for every purpose
hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such Trust Indenture Act to be a part of and govern this
Indenture, the latter provision shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
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SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF [NEW YORK], WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF. THIS
INDENTURE IS SUBJECT TO THE PROVISIONS OF THE TRUST INDENTURE ACT OF 1939, AS AMENDED, THAT ARE
REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY SUCH
PROVISIONS.
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture
or of the Securities) payment of interest or principal of the Securities need not be made on such
date, but may be made on the next succeeding Business Day (except that, if such Business Day is in
the next succeeding calendar year, such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, shall be the immediately preceding Business Day) with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided
that no interest shall accrue for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
SECTION 113. Indenture and Notes Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or interest on any
Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental
indenture or in any Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, agent, officer or director, as such,
past, present or future, of the Company or of any successor corporation, either directly or through
the Company or any successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood
that this Indenture and the obligations issued hereunder are solely corporate obligations, and that
no such personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, shareholders, officers or directors, as such, of the Company, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any Security or implied
therefrom; and that any and all such personal liability of every name and nature, either at common
law or in equity or by constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, employee, agent, officer or director, as such, because of the
creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants
or agreements contained in this Indenture or in any Security or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the execution of this
Indenture and the issuance of such Security.
SECTION 114. No Security Interest Created.
Nothing in this Indenture or in any Securities, express or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect in any jurisdiction where property of the Company or its
Subsidiaries is or may be located. Nothing in this Indenture, express or implied, shall be
construed to indicate the
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priority of the Securities which shall be subordinated to all other debt which the Company may
incur in the future.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee’s certificates of authentication shall be in substantially the
forms set forth in this Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon as may be required
to comply with the rules of any securities exchange or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or engraved or produced by any
combination of these or other methods, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 202. Form of Face of Security.
[FREMONT GENERAL CORPORATION]
9% Notes, Due December 31, 2016
$
No.
CUSIP No.
FREMONT GENERAL CORPORATION, a corporation duly organized and existing under the laws of the
State of Nevada (herein called the “Company”, which term includes any successor corporation under
the Indenture hereinafter referred to), for value received, hereby promises to pay to [Cede & Co.]
or registered assigns, the principal sum of Thirty Nine Million and 00/100 DOLLARS
($39,000,000) on December 31, 2016, and to pay interest on said principal sum from ,
2010 or from the most recent interest payment date (each such date, an “Interest Payment Date”) to
which interest has been paid or duly provided for, quarterly (subject to deferral as set forth
herein) in
arrears on March 31, June 30, September 30 and December 31 of each year, commencing ,
2010, at the rate of 9% per annum, until the principal hereof shall have become due and payable,
and on any overdue principal and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of interest at the same
rate per annum. The amount of interest payable for any period will be computed on the basis of
twelve 30-day months and a 360-day year. The amount of interest payable for any period shorter than
a full quarterly period for which interest is computed, will be computed on the basis of actual
number of days elapsed per 30-day month. In the event that any date on which interest is payable on
this Security is not a Business Day, then a payment of the interest payable on such date will be
made on the next succeeding day which is a Business Day (and without any interest or other payment
in respect of any such delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the date the payment was originally payable. A “Business Day”
shall mean any day other than a Saturday or Sunday or other day on which banking institutions in
the City of New York are authorized or required by law or executive order to remain closed or a day
on which the Corporate Trust Office of the Trustee is closed for business. The interest installment
so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities, as defined in the Indenture) is registered at the close of business on the
Regular Record Date for such interest installment, which shall be the close of business on the
Business Day next preceding such Interest
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Payment Date. Any such interest installment not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior
to such. Special Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and interest on this Security will be made at the office or
agency of the Paying Agent maintained for that purpose in the United States, in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company, payment of
interest may be made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer in immediately available
funds at such place and to such account as may be designated by the Person entitled thereto as
specified in the Security Register.
Reference is hereby made to the further provisions of the Indenture summarized on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Fremont General Corporation has caused this instrument to be duly
executed under its corporate seal.
Dated: , 2010
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FREMONT GENERAL CORPORATION
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Name: |
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Title: |
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Attest:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of the “Company”, designated as
its 9% Notes, due December 31, 2016 (herein called the “Securities”), limited in aggregate
principal
amount to $39,000,000 issued under an Indenture, dated as of , 2010 (herein called the
“Indenture”), between the Company and [ ], a [ ], as Trustee (herein called the
“Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
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At any time on or after , , the Company shall have the right, subject to the terms
and conditions of Article Twelve of the Indenture, to redeem this Security at the option of the
Company, without premium or penalty, in whole or in part, at a Redemption Price equal to 100% of
the principal amount to be redeemed plus accrued but unpaid interest, to, but excluding, the
Redemption Date. Any redemption pursuant to this paragraph will be made upon not less than 30, nor
more than 60, days’ notice to the Holders, at the Redemption Price. If the Securities are only
partially redeemed by the Company, the Securities will be redeemed pro rata.
In the event of redemption of this Security in part only, a new Security or Securities for
the unredeemed portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to the Securities shall occur and be continuing, the
principal of the Securities may be declared due and payable in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions for satisfaction and discharge at any time of the entire
indebtedness of this Security upon compliance by the Company with certain conditions set forth in
the Indenture.
The Indenture contains provisions permitting the Company and the Trustee, with the consent of
Holders of not less than a majority in principal amount of the Outstanding Securities affected by
such modification, to modify the Indenture in a manner affecting the rights of the Holders of the
Securities; provided that no such modification may, without the consent of the Holder of each
Outstanding Security affected thereby, (i) change the fixed maturity of the Securities, or reduce
the principal amount thereof, or reduce the rate or, except as described below, extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption thereof, or (ii)
reduce the percentage of principal amount of the Securities, the Holders of which are required to
consent to any such modification of the Indenture. The Indenture also contains provisions
permitting Holders of specified percentages in principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of and interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Company designated for such purpose
pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to’ the designated
transferee or transferees. No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to
the contrary.
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The Securities are issuable only in registered form without coupons in authorized
denominations of $ or any multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities are exchangeable for a like aggregate principal
amount of Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 204. Form of Trustee’s Certificate of Authentication.
This is one of the Securities referred to in the within-mentioned Indenture.
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ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is limited to $39,000,000 except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 304, 305, 306, 906 or 1208.
The Securities shall be known and designated as the “9% Notes, Due December 31, 2016” of the
Company. Their Stated Maturity is December 31, 2016. The Securities shall bear interest at the
rate of 9% per annum, from , 2010 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable quarterly, in arrears, on March
31, June 30, September 30 and December 31 of each year, commencing , 2010 until the
principal thereof is paid or made available for payment. Interest will compound quarterly and will
accrue at the rate of % per annum on any interest installment in arrears for more than one quarter.
In the event that any date on which interest is payable on the Securities is not a Business Day,
then a payment of the interest payable on such date will be made on the next succeeding day which
is a Business Day (except that, if such Business Day is in the next succeeding calendar year, such
Interest Payment Date shall be the immediately preceding Business Day) (and without any interest
or other payment in respect of any such delay).
The principal of and interest on the Securities shall be payable at the office or agency of
the Paying Agent in the United States maintained for such purpose and at any other office or agency
maintained by the Company for such purpose in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the Security Register or
(ii) by wire transfer in immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Security Register.
The Securities shall be redeemable as provided in Article Eleven.
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SECTION 302. Denominations.
Unless otherwise provided in or pursuant to this Indenture, the principal of, any premium and
interest with respect to the Securities shall be payable in Dollars. Unless otherwise provided in
or pursuant to this Indenture, Securities shall be issuable in registered form without coupons in
denominations of $25 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or one of its Vice Presidents, under its manual or
facsimile corporate seal reproduced thereon attested by its Treasurer or one of its Assistant
Treasurers, or Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and delivery of such Securities; and the Trustee in
accordance with such Company Order shall authenticate and deliver such Securities as in this
Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the Trustee by manual signature, and
such certificate upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive Securities to be
prepared without unreasonable delay. After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section 1002, without
charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the
Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
SECTION 305. Registration; Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register
(the register maintained in such office and in any other office or agency designated pursuant to
Section 1002 being herein sometimes collectively referred to as the “Security Register”) in which,
subject to
EXHIBIT 4
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such reasonable regulations as it may prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for
the purpose of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an office or agency of the
Company designated pursuant to Section 1002 for such purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee or transferees,
one or more new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other Securities of any
authorized denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be
the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall
(if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to the Holder for any registration of transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1208 not involving
any transfer.
If the Securities are to be redeemed in part, the Company shall not be required (A) to issue,
register the transfer of or exchange any Securities during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any such Securities
selected for redemption under Section 1203 and ending at the close of business on the day of such
mailing, or (B) to register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction
of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in
EXHIBIT 4
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relation thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the Company, whether or
not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and proportionately with any and all
other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost
or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security which is payable, but is not punctually paid or duly provided
for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Securities (or their respective Predecessor Securities) are registered at
the close of business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each Security and the
date of the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the proposed payment of
such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 days after the receipt by the
Trustee of the written notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as it
appears in the Security Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Securities (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be payable pursuant to
the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the Securities
may be listed, and, if so listed, upon such notice as may be required by such exchange, if,
after notice given by the Company in writing to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
EXHIBIT 4
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Subject to the foregoing provisions of this Section, each Security delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue (including in each such case
Additional Interest), which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee shall treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of principal of and
(subject to Section 307) interest on such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company
or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall
be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation
any Securities previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day
months. The amount of interest payable for any period shorter than a full quarterly period for
which interest is computed, will be computed on the basis of actual number of days elapsed per
30-day month.
SECTION 311. CUSIP Numbers.
The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use),
and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or omission of such
numbers.
SECTION 312. Global Securities.
The Securities will initially be issued as a Global Security. The Company shall execute and
the Trustee shall, in accordance with Section 303 and the Company Order, authenticate and deliver
one or more Global Securities that (i) shall represent and shall be denominated in an amount equal
to the aggregate principal amount of all of the Securities to be issued in the form of Global
Securities, (ii) shall be registered in the name of the Depositary for such Global Security or
Securities or the nominee of such Depositary, and (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary’s instructions.
Global Securities shall bear a legend substantially to the following effect:
This Security is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a nominee of a Depositary. This
Global Security is exchangeable for Securities registered in the name of a Person other than
EXHIBIT 4
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the Depositary or its nominee only in the limited circumstances described in the Indenture,
and no transfer of this Security (other than a transfer of this Security 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) may be registered except in such limited
circumstances. Every Security delivered upon registration of transfer of, or in exchange
for, or in lieu of, this Global Security shall be a Global Security subject to the
foregoing, except in the limited circumstances described above.
Unless this certificate is presented by an authorized representative of The Depositary
Trust Company, a New York corporation (“DTC”), to the Company or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative of DTC
(and any payment is to be made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.
Notwithstanding the provisions of Section 305, unless and until it is exchanged in whole or
in part for Securities in definitive registered form, a Global Security representing all or a part
of the Securities may not be transferred in the manner provided in Section 305 except as a whole
by the Depositary to a nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
If at any time the Depositary for any Securities represented by one or more Global Securities
notifies the Company that it is unwilling or unable to continue as Depositary for such Securities
or if at any time the Depositary for such Securities shall no longer be eligible under this Section
312, the Company shall appoint a successor Depositary with respect to such Securities. If a
successor Depositary for such Securities is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility, the Company’s election that
such Securities be represented by one or more Global Securities shall no longer be effective and
the Company shall execute, and the Trustee, upon receipt of a Company Order for the authentication
and delivery of definitive Securities, will authenticate and deliver Securities in definitive
registered form, in any authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such Securities in exchange for
such Global Security or Securities.
The Company may at any time and in its sole discretion determine that the Securities issued
in the form of one or more Global Securities shall no longer be represented by a Global Security
or Securities. In such event the Company shall execute, and the Trustee, upon receipt of a Company
Order or an Officers’ Certificate for the authentication and delivery of definitive Securities,
shall authenticate and deliver, Securities in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such Securities, in exchange for such Global Security or
Securities.
In accordance with the provisions of this Section 312, the Depositary for such Global
Security will surrender such Global Security in exchange in whole or in part for Securities in
definitive registered form on such terms as are acceptable to the Company and such Depositary.
Thereupon, the Company shall execute, and the Trustee shall authenticate and deliver, without
service charge:
(i) to the Person specified by such Depositary, a new Security or Securities, of any
authorized denominations as requested by such Person, in an aggregate principal amount equal to
and in exchange for such Person’s beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a denomination equal to the
difference, if any, between the principal amount of the surrendered Global Security
and
EXHIBIT 4
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the aggregate principal amount of Securities authenticated and delivered pursuant to
clause (i) above.
Upon the exchange of a Global Security for Securities in definitive registered form in
authorized denominations, such Global Security shall be cancelled by the Trustee or an agent of
the Company or the Trustee. Securities in definitive registered form issued in exchange for a
Global Security pursuant to this Section 312 shall be registered in such names and in such
authorized denominations as the Depositary for such Global Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee or an agent of the
Company or the Trustee. The Trustee or such agent shall deliver at its office such Securities to
or as directed by the Persons in whose names such Securities are so registered.
SECTION 313 Restrictions on Transfer
The Securities have not been registered under the Securities Act, or the securities laws of
any state or other jurisdiction. The Securities may not be reoffered, sold, assigned, transferred,
pledged, encumbered or otherwise disposed of (a “Transfer”) in the absence of such registration or
unless such transaction is exempt from, or not subject to, registration. The holder by its
acceptance of a Security agrees that it shall not offer, sell, assign, transfer, pledge, encumber
or otherwise dispose of this Security or any portion thereof or interest therein other than in a
minimum denomination of $25 principal amount (or any integral multiple thereof) and then (other
than with respect to a Transfer pursuant to a registration statement that is effective at the time
of such Transfer) only (a) to the Company, (b) pursuant to a person it reasonably believes to be
an institutional “accredited investor” within the meaning
of Rule (501(a)(1)(2)(3) or (7) under
the Securities Act or a qualified institutional buyer (as defined in Rule 144A under the
Securities Act), and in the case of (b) above in which the transferor furnishes the Company with
such certifications, legal opinions or other information as the Company may reasonably request to
confirm that such transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.
Upon presentation of a Security for registration of transfer at the office of the Company
specified herein accompanied by (i) certification by the transferor that such transfer is in
compliance with the terms hereof and (ii) by a written instrument of transfer in a form approved by
the Company executed by the registered holder, in person or by such holder’s attorney thereunto
duly authorized in writing, and including the name, address and telephone and fax numbers of the
transferee and name of the contact person of the transferee, such Security shall be transferred on
the Security register, and a new Security of like tenor and bearing the same legends shall be
issued in the name of the transferee and sent to the transferee at the address and c/o the contact
person so indicated. Transfers and exchanges of Securities shall be subject to such additional
restrictions as are set forth in the legends on the Securities and to such additional reasonable
regulations as may be prescribed by the Company as specified in herein. Successive registrations of
transfers as aforesaid may be made from time to time as desired, and each such registration shall
be noted on the Security register.
Each holder of the Securities represents that it is an “accredited investor” within the
meaning of Rule 501(a) of the Securities Act or a qualified institutional buyer (as defined in
Rule 144A under the Securities Act). Each such holder has been advised that the Securities have
not been registered under the Securities Act, or any state securities laws and, therefore, cannot
be resold unless it is registered under the Securities Act and applicable state securities laws or
unless an exemption from such registration requirements is available. Such holder is aware that
the Company is under no obligation to effect any such registration or to file for or comply with
any exemption from registration. Such holder has not been formed solely for the purpose of making
this investment and is acquiring the Security for its own account for investment, and not with a
view to, or for resale in connection with, the distribution thereof.
EXHIBIT 4
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ARTICLE FOUR
Satisfaction and Discharge; Defeasance
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Securities herein expressly provided for), and the Trustee,
on written demand of and at the expense of the Company, shall execute instruments supplied by the
Company acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 306 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) if redeemable at the option of the Company, are to be called for
redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name, and at
the expense, of the Company
and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal and interest to
the date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder by the
Company; and
(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company
to the Trustee under Section 607 and, if money shall have been deposited with the Trustee pursuant
to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive.
SECTION 402. Defeasance and Discharge.
The following provisions shall apply to the Securities unless specifically otherwise provided
in a Board Resolution, Officers’ Certificate or indenture supplemental hereto provided pursuant to
Section 301. In addition to discharge or defeasance of this Indenture pursuant to Sections 401 and
403, in the case of any Securities with respect to which the exact amount described in
subparagraph (a) of Section 404 can be determined at the time of making the deposit referred to in
such subparagraph (a), the Company shall be deemed to have paid and discharged the entire
indebtedness
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on all the Securities as provided in this Section on and after the date the conditions set forth
in Section 404 are satisfied, and the provisions of this Indenture with respect to the Securities
shall no longer be in effect (except as to (i) rights of registration of transfer and exchange of
Securities, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (iii)
rights of Holders of Securities to receive, solely from the trust fund described in subparagraph
(a) of Section 404, payments of principal thereof and interest, if any, thereon upon the original
stated due dates therefor (but not upon acceleration), (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) this Section 402 and (vi) the rights of the Holders of
Securities as beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them)(hereinafter called “Defeasance”), and the Trustee at the cost and
expense of the Company, shall execute proper instruments acknowledging the same.
SECTION 403. Covenant Defeasance.
In the case of any Securities with respect to which the exact amount described in subparagraph
(a) of Section 404 can be determined at the time of making the deposit referred to in such
subparagraph (a), (i) the Company shall be released from its obligations under any covenants
specified in or pursuant to this Indenture (except as to (i) rights of registration of transfer and
exchange of Securities, (ii) substitution of mutilated, defaced, destroyed, lost or stolen
Securities, (iii) rights of Holders of Securities to receive, from the Company pursuant to Section
1001, payments of principal thereof and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), (iv) the rights, obligations, duties and immunities of
the Trustee hereunder and (v) the rights of the Holders of Securities as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of them), and (ii) the
occurrence of any event specified in Section 501(3)(with respect to any of the covenants specified
in or pursuant to this Indenture) shall be deemed not to be or result in an Event of Default, in
each case with respect to the Outstanding Securities as provided in this Section on and after the
date the conditions set forth in Section 404 are satisfied (hereinafter called “Covenant
Defeasance”), and the Trustee, at the cost and expense of the Company, shall execute proper
instruments acknowledging the same. For this purpose, such Covenant Defeasance means that the
Company may omit to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant (to the extent so specified in the case of Section 501(4)
), 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, but the remainder of this Indenture and the Securities shall be unaffected thereby.
SECTION 404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 402 or 403 to the
Outstanding Securities:
(a) with reference to Section 402 or 403, the Company has irrevocably deposited or
caused to be irrevocably deposited with the Trustee as funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of Securities (i) cash
in an amount, or (ii) direct obligations of the United States of America, backed by its
full faith and credit (“U.S. Government Obligations”), maturing as to principal and
interest, if any, at such times and in such amounts as will insure the availability of
cash, or (iii) a combination thereof, in each case 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 (A) the principal of
and interest, if any, on all Securities on each date that such principal or interest, if
any, is due and payable, and (B) any mandatory sinking fund payments on the dates on which
such payments are due and payable in accordance with the terms of this Indenture and the
Securities;
(b) in the case of Defeasance under Section 402, the Company has delivered to the
Trustee an Opinion of Counsel based on the fact that (x) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (y), since the date
hereof,
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there has been a change in the applicable United States federal income tax law, in either
case to the effect that, and such opinion shall confirm that, the Holders of the Securities
of such series will not recognize income, gain or loss for federal income tax purposes as a
result of such deposit, Defeasance and discharge and will be subject to United States
federal income tax on the same amount and in the same manner and at the same times, as would
have been the case if such deposit, Defeasance and discharge had not occurred;
(c) in the case of Covenant Defeasance under Section 403, the Company has delivered to
the Trustee an Opinion of Counsel to the effect that, and such opinion shall confirm that,
the Holders of the Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of such deposit and Covenant Defeasance and will be
subject to United States federal income tax on the same amount and in the same manner and
at the same times, as would have been the case if such deposit and Covenant Defeasance had
not occurred;
(d) such Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under, any agreement or instrument to which the Company is a
party or by which it is bound; and
(e) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated by this
provision have been complied with.
SECTION 405. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money and U.S.
Government Obligations deposited with the Trustee pursuant to Section 401 shall be held in trust
and such money and all money from such U.S. Government Obligations shall be applied by it, in
accordance with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose
payment such money and U.S. Government Obligations has been deposited with the Trustee.
SECTION 406. Indemnity for U.S. Government Obligations.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to Section 404 or the
principal or interest received in respect of such obligations other than any such tax, fee or
other charge that by law is for the account of the Holders of Outstanding Securities.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
“Event of Default,” wherever used herein, means any one of the following events that has
occurred and is continuing (whatever the reason for such Event of Default and whether it is
voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative or governmental body):
(1) failure for 90 days to pay any interest on the Securities when due; or
(2) failure to pay any principal on the Securities when due whether at Stated Maturity,
following notice of redemption, by declaration, date fixed for payment thereto or otherwise;
or
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(3) failure by the Company to observe or perform in any material respect any other
covenant herein for ninety (90) days after written notice to the Company from the Trustee
or the Holders of at least 25% in principal amount of the Outstanding Securities; or
(4) default under any bond, debenture, indenture or any other evidence of Indebtedness
for money borrowed by the Company having an aggregate outstanding principal amount in
excess of $10 million, which default shall have resulted in such Indebtedness being
accelerated, without such Indebtedness being discharged or such acceleration having been
rescinded or annulled within 30 days after receipt of notice thereof by the Company from
the Trustee or by the Company and the Trustee from the Holders of not less than 25% in
aggregate principal amount at Maturity of the Securities then Outstanding; or
(5) entry by a court having jurisdiction of (A) a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization, receivership or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of substantially all of the property of the Company, or ordering the
winding up or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(6) (A) the commencement by the Company of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization, receivership or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or
(B) the consent by the Company or to the entry of a decree or order for relief in respect of
itself in an involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company, or (C) the filing by the
Company of a petition or answer or consent seeking reorganization or relief under any
applicable Federal or State law, or (D) the consent by the Company to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of all or
substantially all of the property of the Company, or (E) the making by the Company of an
assignment for the benefit of creditors.
(7) the Company shall become unable or fail generally to pay its debts as they become
due.
(8) failure by the Company to pay final judgments entered in a court or courts of
competent jurisdiction aggregating in excess of $5 million, which judgments are not paid,
discharged or stayed for a period of 90 days.
(9) except as provided in the Indenture, the Securities are held in any judicial
proceeding to be unenforceable or ceases for any reason to be in full force and effect or
the Company, or any authorized Person acting on behalf of the Company, denies or disaffirms
its obligations under the Securities.
(10) A material default, breach or violation of the Plan of Reorganization.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding Securities shall have the
right to declare the principal of and the interest on all the Securities and any other amounts
payable hereunder
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to be due and payable immediately and upon any such declaration such principal and all accrued
interest shall become immediately due and payable.
If an Event of Default with respect to the Company specified in clause (5) or (6) of Section
501 occurs, all unpaid principal of and accrued interest on the Outstanding Securities (or such
lesser amount as may be provided for in the Securities) shall become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder of any Security.
At any time after such a declaration of acceleration has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as hereinafter provided in
this Article, the Holders of a majority in principal amount of the Outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay:
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any Securities which have become
due otherwise than by such declaration of acceleration and interest thereon at the
rate borne by the Securities,
(C) to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate borne by the Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel;
(2) all Events of Default, other than the non-payment of the principal of Securities
which have become due solely by such declaration of acceleration, have been cured or waived
as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any Security when such interest
becomes due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of any Security at the Maturity
thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for principal and interest,
and, to the extent that payment thereof shall be legally enforceable, interest on any overdue
principal and on any overdue interest, at the rate borne by the Securities, and, in addition
thereto, 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.
If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or pursue any available remedy to collect payment of
principal, interest and other sums due under the Note or hereunder to enforce any other proper
remedy.
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SECTION 504. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled
and empowered, by intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee
allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official 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 it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of the Securities or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities
in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid for principal of and
interest on the Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and interest, respectively; and
THIRD: Any remainder, to any other Person lawfully entitled thereto or to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a continuing
Event of Default;
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(2) the Holders of not less than 25% in principal amount of the Outstanding Securities
shall have made written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity satisfactory to the
Trustee against the costs, expenses and liabilities to be incurred in compliance with such
request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Holders of a majority in principal amount of the
Outstanding Securities;
it being understood and intended that no one or more Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of and
(subject to Sections 305 and 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
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SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities shall have the
right to 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 the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or with this
Indenture or that may involve the Trustee in personal liability, or that the Trustee
determines to be unduly prejudicial to the rights of Holders not joining in such direction;
and
(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
Subject to Sections 902 and 1010 hereof, the Holders of not less than a majority in principal
amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any
past default hereunder and its consequences, except a default
(1) in the payment of the principal of or interest on any Security (unless such
default has been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the Trustee); or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be
modified or amended without the consent of the Holder of each Outstanding Security
affected;
Upon any such waiver, such default shall cease to exist, effective as of the date specified in
such waiver (and effective retroactively to the date of default, if so specified) and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 514. 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, suffered or omitted by it as Trustee, a court may
require any party litigant in such suit to file an undertaking to pay the costs of such suit, and
may assess costs, including reasonable attorneys’ fees and expenses, against any such party
litigant, in the manner and to the extent provided in the Trust Indenture Act; provided, that
neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require
such an undertaking or to make such an assessment in any suit instituted by the Company or the
Trustee or in any suit for the enforcement of the right to receive the principal of and interest
on any Security on or after the respective due dates therefore expressed in such security.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time hereafter in force, which 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 will not hinder, delay or impede the execution of any power herein granted to the Trustee,
but will suffer and permit the execution of every such power as though no such law had been
enacted.
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ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
(a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.
(b) Except during the continuance of an Event of Default:
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(1) |
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the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and |
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(2) |
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in the absence of bad faith on its art, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates of opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee will examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture. |
(c) The Trustee may not be relived from liabilities for its own grossly negligent action,
its own grossly negligent failure to act, or its own willful misconduct, except that:
|
(1) |
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this paragraph does not limit the effect of paragraph (b) of this Section 601; |
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(2) |
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the Trustee will not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and |
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(3) |
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the Trustee will 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 512 hereof. |
Whether or not therein expressly so provided, every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b) and (c) of Section 601.
(d) The duties and responsibilities of the Trustee shall be as provided by the Trust
Indenture Act, except as expressly provided herein and not in contravention of the Trust
Indenture Act.
(e) All indemnifications and releases from liability granted herein to the Trustee shall
extend to the directors, officers, employees and agents of the Trustee.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder which is made known to the
officer of the Trustee having primary responsibility for administering this Indenture, confirmed
in writing, and as and to the extent provided by the Trust Indenture Act; provided, however, that
except in the case of a default in the payment of the principal of or interest on any Security,
the Trustee shall
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be protected in withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the Holders of
Securities; provided, further, that in the case of any default of the character specified in
Section 501(3), no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term “default” means any event which is,
or after notice or lapse of time or both would become, an Event of Default. For purposes of this
Section, the officer of the Trustee having responsibility for administering this Indenture shall
not be deemed to have knowledge of a default unless the Trustee has actual knowledge of such
default or has received written notice of such default in the manner contemplated by Section 105.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining from acting in
accordance with any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an Officers’ Certificate;
(d) the Trustee may consult with counsel of its choice and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders pursuant
to this Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may 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;
and
(g) the Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and the Trustee shall
not be responsible for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
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SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee’s certificates of
authentication, shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar, or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Security Registrar, or such other agent. Money held by the Trustee
in trust hereunder shall not be invested by the Trustee pending distribution thereof to the holders
of the Securities.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from other funds except
to the extent required by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
SECTION 607. Compensation; Reimbursement; and Indemnity.
The Company agrees:
(1) to pay to the Trustee from time to time such reasonable compensation as the
Company and the Trustee shall from time to time agree in writing for all services rendered
by it hereunder (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its gross negligence or bad
faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for, and to hold it
harmless against, any and all loss, damage, claim, liability or expense, including taxes
(other than taxes based on the income of the Trustee) incurred without gross negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of this trust or the trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder (including, without limitation,
settlement costs). The Trustee will notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the
Company of its obligations hereunder. The Company will defend the claim and the Trustee
will cooperate in the defense. The Trustee may have separate counsel at its own expense,
but if (i) the Company fails to assume the defense of such claim, (ii) there is an actual
conflict of interests or (iii) there is the potential for the imposition of criminal
liability against the Company, then the Company will, in any such case, pay the reasonable
fees and expenses of such counsel.
The obligations of the Company under this Section to compensate the Trustee, to pay or
reimburse the Trustee for expenses, disbursements and advances and to indemnify and hold harmless
the Trustee shall constitute additional indebtedness hereunder and shall survive the satisfaction
and
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discharge of this Indenture. As security for the performance of such obligations of the Company,
the Trustee shall have a claim prior to the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the payment of principal of (and
premium, if any, on) or interest on particular Securities.
To the extent permitted by law, any compensation or expense incurred by the Trustee after a
default specified in or pursuant to Section 501 is intended to constitute an expense of
administration under any then applicable bankruptcy or insolvency law. “Trustee” for purposes of
this Section 607 shall include any predecessor Trustee but the negligence or bad faith of any
Trustee shall not affect the rights of any other Trustee under this Section 607.
The provisions of this Section 607 shall survive the satisfaction and discharge of this
Indenture or the earlier resignation or removal of the Trustee and shall apply with equal force
and effect to the Trustee in its capacity as Authenticating Agent, Paying Agent or Security
Registrar.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in
the manner provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so published. If at any
time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a majority in principal
amount of the Outstanding Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written request therefor
by the Company or by any Holder who has been a bona fide Holder of a Security for at least
six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign
after written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its property shall be appointed or any public
officer
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shall take charge or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the Trustee, or (ii)
subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed by the Company or
the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(f) The Company shall give notice of each resignation and each removal of the Trustee and
each appointment of a successor Trustee to all Holders in the manner provided in Section 106. Each
notice shall include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; provided that, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver
an instrument transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the parties hereto. In
case any Securities shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the same effect as if
such successor Trustee had itself authenticated such Securities.
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SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act
regarding the collection of claims against the Company (or any such other obligor).
ARTICLE SEVEN
Holders’ Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than February 15 and August 15 in each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of the Holders
to the extent the Company has knowledge thereof as of a date not more than 15 days prior to
the delivery thereof, and
(b) at such other times as the Trustee may request in writing, within 30 days after
the receipt by the Company of any such request, a list of similar form and content as of a
date not more than 15 days prior to the time such list is furnished;
provided that the Company shall not be required to furnish any such list so long as the Trustee is
acting as Security Registrar or the Securities are represented by one or more Global Securities.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names
and addresses of Holders contained in the most recent list furnished to the Trustee as provided in
Section 701 or supplied to the Trustee by the Depository at the Trustee’s request, and the names
and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The
Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list
so furnished.
(b) The rights of Holders to communicate with other Holders with respect to their rights
under this Indenture or under the Securities, and the corresponding rights and duties of the
Trustee, shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and
the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in
the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission to Holders, be filed
by the Trustee with each stock exchange upon which the Securities are listed, with the Commission
and with the Company. The Company will notify the Trustee when the Securities are listed on any
stock exchange.
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SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to Holders, such
information, documents and other reports, and such summaries thereof, as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided pursuant to such Trust
Indenture Act; provided that any such information, documents or reports required to be filed with
the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed with the
Commission.
The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, a
certificate stating whether any event of default has occurred and describing such event of
default, if applicable, and that the Company has kept and observed, performed and fulfilled the
covenants contained in this Indenture.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into, any other Person or
any conveyance, transfer or lease of the properties and assets of the Company substantially as an
entirety, the successor Person formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, 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, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities. Such successor Person shall promptly provide notice in writing to the
Trustee of such event.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or pursuant to a Board
Resolution, and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following
purposes:
(1) to evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders, or to
surrender any right or power herein conferred upon the Company; or
(3) to cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions with respect
to matters or questions arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture, provided that such action pursuant to this clause (3)
shall not adversely affect the interests of the Holders of the Securities; or
(4) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities and to add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the requirements of Section 610; or
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(5) to comply with the requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act; or
(6) to add to, delete from or revise the conditions, limitations and restrictions on
the authorized amount, terms or purposes of issue, authentication and delivery of
Securities, as herein set forth; or
(7) to add any additional Events of Default with respect to all Securities (as shall
be specified in such supplemental indenture); or
(8) to supplement any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the defeasance and discharge of the Securities pursuant
to Article 4, provided that any such action shall not adversely affect the interests of any
Holder of an Outstanding Security in any material respect; or
(9) to amend or supplement any provision contained herein or in any supplemental
indenture, provided that no such amendment or supplement shall materially adversely affect
the interests of the Holders of any Securities then Outstanding.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of modifying in any manner the
rights of the Holders under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of any Security, or reduce the principal amount
thereof, or the rate of interest thereon, or any installment of interest on, or change the
place of payment where, or the coin or currency in which, any Security or interest thereon
is payable, or impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders,
(2) reduce the percentage in principal amount of the Outstanding Securities, the
consent of whose Holders is required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or Section 1010, except
to increase any such percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected
in, and shall
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incur no liability that may result from, relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this Indenture and any
Officers’ Certificate stating that all conditions precedent to the execution of such supplemental
Indenture have been fulfilled. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.
SECTION 907. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to Section 902, the Company shall transmit to the Holders of Outstanding Securities a
notice setting forth the substance of such supplemental indenture.
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and interest on the Securities in
accordance with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain an office or agency in the United States where Securities may be
presented or surrendered for payment, where Securities may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or agency. If at any time
the Company shall fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee
as its agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices or agencies (in the
United States) where the Securities may be presented or surrendered for any or all such purposes
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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 United States for such purposes. The Company will 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.
SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on or at the option of
the Company on or before each due date of the principal of or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to
pay the principal or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of its action or
failure so to act. In such case the Company shall not invest the amount so segregated and held in
trust pending the distribution thereof.
Whenever the Company shall have one or more Paying Agents, it will, on or prior to each due
date of the principal of or interest on any Securities, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act; provided, however, that any such deposit on a due date shall be
initiated prior to 1:00 p.m. (New York time) in same-day funds.
The Company will cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will (i) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making of any payment in
respect of the Securities, upon the written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall
be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or interest on any Security and remaining unclaimed for
two years after such principal or interest has become due and payable shall be paid to the Company
on Company Request, or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall thereupon cease.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the performance and observance
of any of the material terms, conditions and covenants of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which they may have
knowledge.
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SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence in accordance with its organizational
documents, rights (charter and statutory), licenses and franchises; provided, however, that the
Company shall not be required to preserve any such right, license or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties, assets and interests used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the
Company or any Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary that comprise more than 10%
of the assets of the Company and its Subsidiaries taken as a whole; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings.
SECTION 1008. Additional Covenants.
The Company covenants and agrees that it shall not, and shall not permit any Subsidiary of the
Company (other than its wholly owned Subsidiaries) to: (a) declare or pay any dividends on or make
a distribution with respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock (other than (i) repurchases or acquisitions of shares of the
Common Stock of the Company as contemplated by any employment arrangement, benefit plan or other
similar contract with or for the benefit of employees, officers or directors entered into in the
ordinary course of business, (ii) as a result of an exchange or conversion of any class or series
of the Company’s capital stock for the Company’s Common Stock, (iii) the purchase of fractional
interests in shares of the Company’s capital stock pursuant to the conversion or exchange
provisions of such Company capital stock or the security being converted or exchanged, or (iv) the
payment of any stock dividend by the Company payable in the Company’s Common Stock or the same
stock as that on which the dividend is being paid) or make any guarantee payments with respect to
the foregoing and (b) make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior
to the Securities except as (i) required in accordance with the terms thereof (including, in the
case of junior debt, the subordination provisions thereof), (ii) in connection with a
contemporaneous refinancing of such debt securities with the proceeds of a new issuance of debt
securities which have terms and provisions no more favorable to the holder than those of the debt
securities repurchased or refinanced (iii) in connection with the contemporaneous conversion or
exchange of such debt securities for Common Stock of the Company; provided, however, that in no
event shall the amount to be paid by the Company or any of its Subsidiaries under (a) or (b)(ii) or
(iii) above exceed in the aggregate $500,000 per year if at such
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time (i) there shall have occurred and be continuing any event that (y) with the giving of notice
or the lapse of time or both, would constitute an Event of Default hereunder and (z) in respect of
which the Company shall not have taken reasonable steps to cure.
The Company shall not, during such time as the material financial obligations under this
Indenture remain outstanding, effect a Change in Control of the Company through a transaction or
series of related transactions without the prior written consent of a majority of the holders of
TOPrS as of the record date applicable to such transaction.
The Company shall not, directly or indirectly, purchase, acquire or lease any property from,
or sell, transfer or leas any property to, any officer, director, subsidiary or other affiliate of
the Company, except that are at prices and on terms and conditions no less favorable to the
Company that could be obtained in a comparable arms-length transaction from unrelated third
parties.
SECTION 1009. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for Securities, the Company may,
with respect to the Securities, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant set forth in Sections 1005, 1006, 1007 or 1008 with respect
to the Securities if before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Optional Redemption; Conditions to Optional Redemption.
At any time on or after , , the Company shall have the right to redeem
the Securities, in whole or in part, from time to time, at a Redemption Price equal to 100% of the
principal amount of Securities to be redeemed plus any accrued but unpaid interest, if any, to the
Redemption Date.
The Company shall not redeem the Securities in part unless all accrued and unpaid interest
has been paid in full on all Outstanding Securities for all quarterly interest periods terminating
on or prior to the Redemption Date.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company, as permitted by Section 1201, shall
be made in accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Securities pursuant to Section 1201 shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company, the Company shall,
at least 30 days and no more than 60 days prior to the Redemption Date fixed by the Company, notify
the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed and
provide a copy of the notice of redemption given to Holders of Securities to be redeemed pursuant
to Section 1204. To the extent that the Securities are or become publicly traded, the Company may
redeem Securities without regard to the provisions of (i) Sections 1104, 1106 and 1107, and (ii)
Section 1105 (if the amounts redeemed are less than $250,000).
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SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed (unless such redemption affects only a
single Security), the particular Securities to be redeemed shall be selected on a pro rata basis
(or such other method of selection as the Trustee may customarily employ) not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption as aforesaid and, in case of any Securities selected for partial redemption as
aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect to any redemption
affecting only a single Security, whether such Security is to be redeemed in whole or in part. In
the case of any such redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Securities redeemed or
to be redeemed only in part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less
than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed, at his address appearing in the Security Register.
All notices of redemption shall identify the Securities to be redeemed (including CUSIP
number) and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all Outstanding the Securities are to be redeemed, the identification
(and, in the case of partial redemption, the principal amount) of the particular Security
or Securities to be redeemed;
(4) in case any Security is to be redeemed in part only, the notice which relates to
such Security shall state that on and after the Redemption Date, upon surrender of such
Security, the Holder of such Security will receive, without charge, a new Security or
Securities of authorized denominations for the principal amount thereof remaining
unredeemed;
(5) that on the Redemption Date the Redemption Price will become due and payable upon
each such Security to be redeemed and that interest thereon will cease to accrue on and
after said date;
(6) the place or places where such Securities are to be surrendered for payment of the
Redemption Price and any accrued interest pertaining thereto; and
(7) the CUSIP number or the Euroclear or the Cedel reference numbers of such
Securities, if any (or any other numbers used by a Depository to identify such Securities).
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Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Company’s request, by the Trustee in the name and at the expense
of the Company.
SECTION 1106. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date; provided, however, that any such deposit on a
Redemption Date shall be initiated prior to 1:00 p.m. (New York time) in same-day funds.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be paid by the Company
at the Redemption Price, together with accrued interest to the Redemption Date; provided, however,
that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid, bear interest from the Redemption Date at the rate
borne by the Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a place of payment
therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the principal of the
Security so surrendered.
ARTICLE TWELVE
Meetings Of Holders
SECTION 1201. Purposes for Which Meetings May Be Called.
A meeting of Holders may be called at any time and from time to time pursuant to this Article
to make, give or take any request, demand, authorization, direction, notice, consent, waiver or
other Act provided by this Indenture to be made, given or taken by the Holders.
SECTION 1202. Call, Notice and Place of Meetings.
(1) The Trustee may at any time call a meeting of the Holders for any purpose specified in
Section 1201, to be held at such time and at such place as the Trustee shall determine. Notice of
every meeting of Holders, setting forth the time and the place of such meeting and in general
terms the
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action proposed to be taken at such meeting, shall be given, in the manner provided in Section
106, not less than 21 nor more than 180 days prior to the date fixed for the meeting.
(2) In case at any time the Company (by or pursuant to a Board Resolution) or the Holders of
at least 25% in principal amount of the Outstanding Securities shall have requested the Trustee to
call a meeting of the Holders for any purpose specified in Section 1201, by written request
setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee
shall not have mailed notice of or made the first publication of the notice of such meeting within
21 days after receipt of such request (whichever shall be required pursuant to Section 1.6) or
shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company
or the Holders in the amount above specified, as the case may be, may determine the time and the
place for such meeting and may call such meeting for such purposes by giving notice thereof as
provided in clause (1) of this Section.
SECTION 1203. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders, a Person shall be (1) a Holder of one or
more Outstanding Securities, or (2) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities by such
Holder or Holders. The only
Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the
Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and
its counsel and any representatives of the Company and its counsel.
SECTION 1204. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the Outstanding Securities
shall constitute a quorum for any meeting of Holders. In the absence of a quorum within 30 minutes
after the time appointed for any such meeting, the meeting shall, if convened at the request of
Holders, be dissolved. In any other case the meeting may be adjourned for a period of not less than
10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In
the absence of a quorum at any reconvened meeting, such reconvened meeting may be further adjourned
for a period of not less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such reconvened meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1202(1), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented to a meeting or
adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by
the affirmative vote of the Holders of a majority in principal amount of the Outstanding
Securities; provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any request, demand, authorization, direction, notice, consent, waiver
or other Act which this Indenture expressly provides may be made, given or taken by the Holders of
a specified percentage, which is less than a majority, in principal amount of the Outstanding
Securities may be adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities.
Any resolution passed or decision taken at any meeting of Holders duly held in accordance
with this Section shall be binding on all the Holders and the Coupons appertaining thereto,
whether or not such Holders were present or represented at the meeting.
SECTION 1205. Determination of Voting Rights; Conduct and Adjournment of Meetings.
(1) Notwithstanding any other provisions of this Indenture, the Trustee may make such
reasonable regulations as it may deem advisable for any meeting of Holders in regard to proof of
the
EXHIBIT 4
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holding of Securities and of the appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by any such regulations, the
holding of Securities shall be proved in the manner specified in Section 104 and the appointment
of any proxy shall be proved in the manner specified in Section 104 or by having the signature of
the person executing the proxy witnessed or guaranteed by any trust company, bank or banker
authorized by Section 104 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 104 or other proof.
(2) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the
meeting, unless the meeting shall have been called by the Company or by Holders as provided in
Section 1202(2), in which case the Company or the Holders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal
amount of the Outstanding Securities represented at the meeting.
(3) At any meeting, each Holder of a Security or proxy shall be entitled to one vote for each
$1,000 principal amount of Securities held or represented by him; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding
and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall
have no right to vote, except as a Holder of a Security or proxy.
(4) Any meeting of Holders duly called pursuant to Section 1202 at which a quorum is present
may be adjourned from time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities represented at the meeting; and the meeting may be held as so adjourned
without further notice.
SECTION 1206 Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders shall be by written ballots
on which shall be subscribed the signatures of the Holders or of their representatives by proxy
and the principal amounts and serial numbers of the Outstanding Securities held or represented by
them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in triplicate of all votes cast at the
meeting. A record, at least in triplicate, of the proceedings of each meeting of Holders shall be
prepared by the secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1202 and, if applicable, Section 1204.
Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary
of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters therein stated.
ARTICLE THIRTEEN
Expenses
SECTION 1301. Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or resignation of the Trustee pursuant to
Section 610, the Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation.
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This instrument may be executed in any number of counterparts, each of which so executed
shall be deemed to be an original, but all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and
their respective corporate seals to be hereunto affixed and attested, all as of the day and year
first above written.
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FREMONT GENERAL CORPORATION
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On the day of , before me personally came , to me known, who,
being by me duly sworn, did depose and say that he/she is the of Fremont General
Corporation, one of the corporations described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by authority of the Board of Directors of such corporation.
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STATE OF
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On the day of , before me personally came , to me known, who,
being by me duly sworn, did depose and say that he/she is the of Fremont General
Corporation, one of the corporations described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by authority of the Board of Directors of such corporation.
EXHIBIT 4
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EXHIBIT 5
ARTICLES OF INCORPORATION
EXHIBIT 5
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FREMONT GENERAL CORPORATION
ARTICLE 1
NAME
The name of the corporation is [REORGANIZED FREMONT] (the “Corporation”).
ARTICLE 2
RESIDENT AGENT AND ADDRESS
The name of the resident agent and the agent’s street address where process may be served upon
the Corporation are as follows: 303 East Proctor Street, Carson City, Nevada 89701.
ARTICLE 3
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which a
corporation may be organized under the Nevada Revised Statutes of the State of Nevada (“NRS”).
ARTICLE 4
CAPITAL STOCK
Section 4.1 Shares, Classes and Series Authorized
This Corporation is authorized to issue two classes of stock to be designated, respectively,
“Common Stock” and “Preferred Stock”. The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is Two Hundred Million (200,000,000) shares, of
which One Hundred Ninety Million (190,000,000) shares shall be designated as Common Stock with a
par value of $0.01 per share, and Ten Million (10,000,000) shares shall be designated as Preferred
Stock with a par value of $0.01 per share. The Common Stock and Preferred Stock may be collectively
referred to herein as the “Capital Stock.” The Corporation shall be prohibited from issuing
non-voting securities, whether Common Stock or Preferred Stock.
Section 4.2 Designations, Powers, Preferences, Rights, Qualifications, Limitations and
Restrictions Relating to the Capital Stock
The following is a statement of the designations, powers, preferences and rights in respect of
the classes of the Capital Stock, and the qualifications, limitations or restrictions thereof, and
of the authority with respect thereto expressly vested in the Board of Directors of the Corporation
(the “Board”):
1
(1) Preferred Stock. The Preferred Stock may be issued from time to time in one or more
series, the number of shares and any designation of each series and the powers, preferences and
rights of the shares of each series, and the qualifications, limitations or restrictions thereof,
to be as stated and expressed in a resolution or resolutions providing for the issue of such series
adopted by the Board, subject to the limitations prescribed by law, including 11 U.S.C.
§1123(a)(6). The Board in any such resolution or resolutions is expressly authorized to state for
each such series:
(a) the voting powers, if any, of the holders of shares of such series in addition to any
voting rights affirmatively required by law;
(b) the rights of shareholders in respect of dividends, including, without limitation, the
rate or rates per annum and the time or times at which (or the formula or other method pursuant to
which such rate or rates and such time or times may be determined) and conditions upon which the
holders of shares of such series shall be entitled to receive dividends and other distributions,
and whether any such dividends shall be cumulative or non-cumulative and, if cumulative, the terms
upon which such dividends shall be cumulative;
(c) whether any shares of the stock of each such series shall be redeemable by the Corporation
at the option of the Corporation or the holder thereof and, if redeemable, the terms and conditions
upon which any shares of the stock of such series may be redeemed;
(d) the amount payable and the rights or preferences to which the holders of the stock of such
series shall be entitled upon any voluntary or involuntary liquidation, dissolution or winding up
of the Corporation;
(e) the terms, if any, upon which shares of stock of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or classes or of any other series of the same
or any other class or classes, including the price or prices or the rate or rates of conversion or
exchange and the terms of adjustment, if any; and
(f) any other powers, designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, so far as they are not
inconsistent with the provisions of these Amended and Restated Articles of Incorporation (“Articles
of Incorporation”) and to the full extent now or hereafter permitted by the laws of the State of
Nevada.
Subject to any limitations or restrictions stated in the resolution or resolutions of the
Board originally fixing the number of shares constituting a series, the Board may by resolution or
resolutions likewise adopted increase (but not above the total number of authorized shares of
Preferred Stock) or decrease (but not below the number of shares of the series then outstanding)
the number of shares of the series subsequent to the issue of shares of that series; and, in case
the number of shares of any series shall be so decreased, the shares constituting the decrease
shall resume that status that they had prior to the adoption of the resolution originally fixing
the number of shares constituting such series.
2
(2) Common Stock. Except as otherwise provided for by law, the shares of Common Stock shall
entitle the holders thereof to one vote for each share on all matters on which shareholders have
the right to vote. The holders of shares of Common Stock shall not be permitted to cumulate their
votes for the election of directors. Notwithstanding the foregoing, except as otherwise required by
law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to these
Articles of Incorporation (including any Certificate of Designations relating to any series of
Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred
Stock if the holders of such affected series are entitled, either separately or together with the
holders of one or more other such series, to vote thereon pursuant to these Articles of
Incorporation (including any Certificate of Designations relating to any series of Preferred Stock)
or pursuant to the NRS.
Subject to the preferences, privileges and powers with respect to each class or series of
Preferred Stock having any priority over the Common Stock, and the qualifications, limitations or
restrictions thereof, the holders of the Common Stock shall have and possess all rights pertaining
to the Capital Stock; provided however, that in the event of any liquidation, dissolution, or
winding up of the Corporation, the holders of the Common Stock (and the holders of any class or
series of stock entitled to participate with the Common Stock in the distribution of assets) shall
be entitled to receive, in cash or in kind, the assets of the Corporation available for
distribution remaining after: (i) payment or provision for payment of the Corporation’s debts and
liabilities and (ii) distributions or provisions for distributions to holders of any class or
series of Capital Stock having preference over the Common Stock in the liquidation, dissolution, or
winding up of the Corporation.
ARTICLE 5
LIMITATION OF DIRECTOR LIABILITY
No director or officer of the Corporation shall be personally liable to the Corporation or any
of its shareholders for damages for breach of fiduciary duty as a director or officer involving any
act or omission of any such director or officer; provided, however, that the foregoing provision
shall not eliminate or limit the liability of a director or officer (1) for acts or omissions which
involve intentional misconduct, fraud, a knowing violation of law or breach of the duty of loyalty,
or (2) the payment of distributions in violation of
Section 78.300 of the NRS. Any repeal or
modification of this Article 5 shall be prospective only and shall not adversely affect any
limitation on the personal liability of a director or officer of the Corporation for acts or
omissions prior to such repeal or modification.
ARTICLE 6
INDEMNIFICATION
Section 6.1 Actions, Suits or Proceedings Other than by or in the Right of the
Corporation
To the fullest extent permitted by the NRS, the Corporation shall indemnify any person who is
or was or has agreed to become a director or officer of the Corporation who was or is made a party
to or is threatened to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than an
3
action by or in the right of the Corporation) by reason of the fact that he or she is or was or has
agreed to become a director or officer of the Corporation, or is or was serving or has agreed to
serve at the request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or by reason of any action
alleged to have been taken or omitted in such capacity, and the Corporation may indemnify any other
person who is or was or has agreed to become an employee or agent of the Corporation who was or is
made a party to or is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he or she is or was or has agreed
to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at
the request of the Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have
been taken or omitted in such capacity, against costs, charges, expenses (including attorneys’ fees
and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by
him or her or on his or her behalf in connection with such action, suit or proceeding and any
appeal therefrom, if he or she acted in good faith and in a manner he or she reasonably believed to
be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he or she reasonably believed to be in, or
not opposed to, the best interests of the Corporation and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was unlawful. Notwithstanding
anything contained in this Article 6, but subject to Section 6.7 hereof, the Corporation shall not
be obligated to indemnify any director or officer in connection with an action, suit or proceeding,
or part thereof, initiated by such person against the Corporation unless such action, suit or
proceeding, or part thereof, was authorized or consented to by the Board.
Section 6.2 Actions or Suits by or in the Right of the Corporation
To the fullest extent permitted by the NRS, the Corporation shall indemnify any person who is
or was or has agreed to become a director or officer of the Corporation who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is
or was or has agreed to become a director or officer of the Corporation, or is or was serving or
has agreed to serve at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity, and the Corporation may indemnify
any other person who is or was or has agreed to become an employee or agent of the Corporation who
was or is made a party or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in its favor by reason
of the fact that he or she is or was or has agreed to become an employee or agent of the
Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or omitted in such
capacity, against costs, charges and expenses (including attorneys’ fees and
4
expenses) actually and reasonably incurred by him or her or on his or her behalf in connection with
the defense or settlement of such action or suit and any appeal therefrom, if he or she acted in
good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best
interests of the Corporation, except no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of such liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to indemnity for such
costs, charges and expenses which the court shall deem proper. Notwithstanding anything contained
in this Article 6, but subject to Section 6.7 hereof, the Corporation shall not be obligated to
indemnify any director or officer in connection with an action or suit, or part thereof, initiated
by such person against the Corporation unless such action or suit, or part thereof, was authorized
or consented to by the Board.
Section 6.3 Indemnification for Costs, Charges and Expenses of a Successful Party
To the extent that a present or former director or officer of the Corporation has been
successful, on the merits or otherwise (including, without limitation, the dismissal of an action
without prejudice), in defense of any action, suit or proceeding referred to in Section 6.1 or 6.2,
or in defense of any claim, issue or matter therein, such person shall be indemnified against all
costs, charges and expenses (including attorneys’ fees and expenses) actually and reasonably
incurred by such person or on such person’s behalf in connection therewith.
Section 6.4 Indemnification for Expenses of a Witness
To the extent that any person who is or was or has agreed to become a director or officer of
the Corporation is made a witness to any action, suit or proceeding to which he or she is not a
party by reason of the fact that he or she was, is or has agreed to become a director or officer of
the Corporation, or is or was serving or has agreed to serve as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise, at the request
of the Corporation, such person shall be indemnified against all costs, charges and expenses
actually and reasonably incurred by such person or on such person’s behalf in connection therewith.
To the extent that any person who is or was or has agreed to become an employee or agent of
the Corporation is made a witness to any action, suit or proceeding to which he or she is not a
party by reason of the fact that he or she was, is or has agreed to become an employee or agent of
the Corporation, or is or was serving or has agreed to serve as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise, at the request
of the Corporation, such person may be indemnified against all costs, charges and expenses actually
and reasonably incurred by such person or on such person’s behalf in connection therewith.
Section 6.5 Determination of Right to Indemnification
Any indemnification under Section 6.1 or 6.2 (unless ordered by a court) shall be made, if at
all, by the Corporation only as authorized in the specific case upon a determination that
5
indemnification of the director, officer, employee or agent is proper under the circumstances
because he or she has met the applicable standard of conduct set forth in Section 6.1 or 6.2. Any
indemnification under Section 6.4 (unless ordered by a court) shall be made, if at all, by the
Corporation only as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper under the circumstances. Such determinations
shall be made with respect to a person who is a director or officer at the time of such
determination (1) by a majority vote of directors who were not parties to such action, suit or
proceeding even though less than a quorum of the Board, (2) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum, (3) if there are no
such directors, or if such directors so direct, by independent counsel in a written opinion or (4)
by the shareholders of the Corporation. To obtain indemnification under this Article 6, any person
referred to in Section 6.1, 6.2, 6.3 or 6.4 shall submit to the Corporation a written request,
including therewith such documents as are reasonably available to such person and are reasonably
necessary to determine whether and to what extent such person is entitled to indemnification.
Section 6.6 Advancement of Costs, Charges and Expenses
Costs, charges and expenses (including attorneys’ fees and expenses) incurred by or on behalf
of a director or officer in defending a civil or criminal action, suit or proceeding referred to in
Section 6.1 or 6.2 shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding; provided, however, that the payment of such costs, charges and expenses
incurred by or on behalf of a director or officer in advance of the final disposition of such
action, suit or proceeding shall be made only upon receipt of a written undertaking, by or on
behalf of the director or officer to repay all amounts so advanced in the event that it shall
ultimately be determined that such director or officer is not entitled to be indemnified by the
Corporation as authorized in this Article 6 or by law. No security shall be required for such
undertaking and such undertaking shall be accepted without reference to the recipient’s financial
ability to make repayment. The majority of the directors who were not parties to such action, suit
or proceeding may, upon approval of such director or officer of the Corporation, authorize the
Corporation’s counsel to represent such person, in any action, suit or proceeding, whether or not
the Corporation is a party to such action, suit or proceeding.
Section 6.7 Procedure for Indemnification
Any indemnification under Section 6.1, 6.2, 6.3 or 6.4 or advancement of costs, charges and
expenses under Section 6.6 shall be made promptly, and in any event within sixty (60) days (except
indemnification to be determined by shareholders which will be determined at the next annual or
special meeting of shareholders), upon the written request of the director or officer. The right to
indemnification or advancement of expenses as granted by this Article 6 shall be enforceable by the
director, officer, employee or agent in any court of competent jurisdiction in the event the
Corporation denies such request, in whole or in part, or if no disposition of such request is made
within sixty (60) days of the request. Such person’s costs, charges and expenses incurred in
connection with successfully establishing his or her right to indemnification or advancement, to
the extent successful, in any such action shall also be indemnified by the Corporation. It shall be
a defense to any such action (other than an action brought to enforce a claim for the advancement
of costs, charges and expenses under Section 6.6 where the required
6
undertaking, if any, has been received by the Corporation) that the claimant has not met the
standard of conduct set forth in Section 6.1 or 6.2, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation (including its directors, its
independent counsel and its shareholders) to have made a determination prior to the commencement of
such action that indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in Section 6.1 or 6.2, nor the fact that there
has been an actual determination by the Corporation (including its directors, its independent
counsel and its shareholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has not met the
applicable standard of conduct.
Section 6.8 Settlement
The Corporation shall not be obligated to reimburse the costs, charges and expenses of any
settlement to which it has not agreed. If, in any action, suit or proceeding (including any appeal)
within the scope of Section 6.1 or 6.2, the person to be indemnified shall have unreasonably failed
to enter into a settlement thereof offered or assented to by the opposing party or parties in such
action, suit or proceeding, then, notwithstanding any other provision of this Article 6, the
indemnification obligation of the Corporation to such person in connection with such action, suit
or proceeding shall not exceed the total of the amount at which settlement could have been made and
the expenses incurred by or on behalf of such person prior to the time such settlement could
reasonably have been effected.
Section 6.9 Other Rights; Continuation of Right to Indemnification; Individual Contracts
The indemnification and advancement of costs, charges and expenses provided by or granted
pursuant to this Article 6 shall not be deemed exclusive of any other rights to which any person
seeking indemnification or advancement of costs, charges and expenses may be entitled under law
(common or statutory) or any Bylaw, agreement, policy of indemnification insurance or vote of
shareholders or directors or otherwise, both as to action in his or her official capacity and as to
action in any other capacity while holding office, and shall continue as to any person who has
ceased to be a director, officer, employee or agent and shall inure to the benefit of the legatees,
heirs, distributees, executors and administrators of any such person. Nothing contained in this
Article 6 shall be deemed to prohibit the Corporation from entering into, and the Corporation is
specifically authorized to enter into, agreements with directors, officers, employees and agents
providing indemnification rights and procedures different from those set forth herein. All rights
to indemnification under this Article 6 shall be deemed to be a contract between the Corporation
and each director, officer, employee or agent of the Corporation who serves or served in such
capacity (or is or was serving or has agreed to serve at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise) at any time while this Article 6 is in effect.
Section 6.10 Savings Clause
If this Article 6 or any portion shall be invalidated on any ground by any court of competent
jurisdiction, the Corporation shall nevertheless indemnify each director or officer, and
7
may indemnify each employee or agent, of the Corporation as to any costs, charges, expenses
(including attorneys’ fees and expenses), judgments, fines and amounts paid in settlement with
respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative
(including any action by or in the right of the Corporation), to the full extent permitted by any
applicable portion of this Article 6 that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Section 6.11 Insurance
The Corporation may purchase and maintain insurance, at its expense, to protect itself and any
person who is or was a director, officer, employee or agent of the Corporation or is or was serving
or has agreed to serve at the request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise against any costs,
charges or expenses, liability or loss incurred by such person in any such capacity, or arising out
of such persons status as such, whether or not the Corporation would have the power to indemnify
such person against such costs, charges or expenses, liability or loss under these Articles of
Incorporation or applicable law; provided, however, that such insurance is available on acceptable
terms as determined by a vote of the Board. To the extent that any director, officer, employee or
agent is reimbursed by an insurance company under an indemnification insurance policy for any
costs, charges, expenses (including attorneys’ fees and expenses), judgments, fines and amounts
paid in settlement to the fullest extent permitted by any applicable portion of this Article 6, the
Bylaws, any agreement, the policy of indemnification insurance or otherwise, the Corporation shall
not be obligated to reimburse the person to be indemnified in connection with such proceeding.
Section 6.12 Definitions
For purposes of this Article 6, the following terms shall have the following meanings:
(1) “The Corporation” shall include, in addition to the resulting corporation, any constituent
corporation or entity (including any constituent of a constituent) absorbed by way of an
acquisition, consolidation, merger or otherwise, which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, employees or agents so
that any person who is or was a director, officer, employee or agent of such constituent
corporation or entity, or is or was serving at the written request of such constituent corporation
or entity as a director or officer of another corporation, entity, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions of this Article 6
with respect to the resulting or surviving corporation or entity as such person would have with
respect to such constituent corporation or entity if its separate existence had continued;
(2) “Other enterprises” shall include employee benefit plans, including, but not limited to,
any employee benefit plan of the Corporation;
(3) “Director or officer” of the Corporation shall include any director or officer of the
Corporation who is or was or has agreed to serve at the request of the Corporation as a director,
officer, partner or trustee of another corporation, partnership, joint venture, trust or other
enterprise;
8
(4) “Serving at the request of the Corporation” shall include any service that imposes
duties on, or involves services by a director, officer, employee or agent of the Corporation with
respect to an employee benefit plan, its participants or beneficiaries, including acting as a
fiduciary thereof;
(5) “Fines” shall include any penalties and any excise or similar taxes assessed on a person
with respect to an employee benefit plan;
(6) To the fullest extent permitted by law, a person shall be deemed to have acted in “good
faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests
of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his or her conduct was unlawful,” if his or her action is based on the records or books
of account of the Corporation or another enterprise, or on information supplied to him or her by
the officers of the Corporation or another enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another enterprise or on information or records
given or reports made to the Corporation or another enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by the Corporation or
another enterprise; and
(7) A person shall be deemed to have acted in a manner “not opposed to the best interests of
the Corporation,” as referred to in Sections 6.1 and 6.2 if such person acted in good faith and in
a manner he or she reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan.
Section 6.13 Subsequent Amendment and Subsequent Legislation
Neither the amendment, termination or repeal of this Article 6 or of relevant provisions of
the NRS or any other applicable laws, nor the adoption of any provision of these Articles of
Incorporation or the Bylaws of the Corporation or of any statute inconsistent with this Article 6
shall eliminate, affect or diminish in any way the rights of any director, officer, employee or
agent of the Corporation to indemnification under the provisions of this Article 6 with respect to
any action, suit or proceeding arising out of, or relating to, any actions, transactions or facts
occurring prior to the final adoption of any such amendment, termination, repeal, provision or
statute.
If the NRS is amended to expand further the indemnification permitted to directors and
officers of the Corporation, then the Corporation shall indemnify such persons to the fullest
extent permitted by the NRS, as so amended.
ARTICLE 7
AMENDMENTS
Section 7.1 Amendments of Articles of Incorporation
In addition to any affirmative vote required by applicable law and any voting rights granted
to or held by holders of shares of any series of Preferred Stock, any alteration, amendment, repeal
or rescission of any provision of these Articles of Incorporation must be approved by the Board and
by the affirmative vote of the holders of a majority (or such greater
9
proportion as may otherwise be required pursuant to any specific provision of these Articles of
Incorporation) of the total votes eligible to be cast by the holders of all outstanding shares of
Capital Stock entitled to vote thereon. Subject to the foregoing, the Corporation reserves the
right to amend these Articles of Incorporation from time to time in any and as many respects as may
be desired and as may be lawfully contained in an original articles of incorporation filed at the
time of making such amendment.
Except as may otherwise be provided in these Articles of Incorporation, the Corporation
reserves the right at any time, and from time to time, to amend, alter, change or repeal any
provision contained in these Articles of Incorporation and to add or insert herein any other
provisions authorized by the laws of the State of Nevada at the time in force, in the manner now or
hereafter prescribed by law, and all rights, preferences and privileges of any nature conferred
upon shareholders, directors or any other persons whomsoever by and pursuant to these Articles of
Incorporation in its present form or as hereafter amended are granted subject to the rights
reserved in this Section 7.1.
Section 7.2 Amendments of Bylaws
In furtherance and not in limitation of the powers conferred by statute, the Board of the
Corporation is expressly authorized to make, alter, amend, rescind or repeal from time to time any
of the Bylaws of the Corporation in accordance with the terms thereof; provided, however, that any
Bylaw made by the Board may be altered, amended, rescinded or repealed in accordance with the terms
thereof by the holders of a majority of the shares of Capital Stock entitled to vote thereon at any
annual meeting or at any special meeting called for that purpose. Notwithstanding the foregoing,
any provision of the Bylaws that contains a supermajority voting requirement shall only be altered,
amended, rescinded or repealed by a vote of the Board or holders of shares of Capital Stock
entitled to vote thereon that is not less than the supermajority specified in such provision.
10
EXHIBIT 6
BY LAWS
EXHIBIT 6
AMENDED AND RESTATED
BYLAWS
OF
[REORGANIZED FREMONT]
As of
[ , 2010]
TABLE OF CONTENTS
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ARTICLE 1 OFFICES |
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1 |
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ARTICLE 2 SHAREHOLDERS |
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1 |
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Section 2.1 Place of Meetings |
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1 |
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Section 2.2 Annual Meetings |
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1 |
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Section 2.3 Special Meetings |
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1 |
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Section 2.4 Notice of Meetings |
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2 |
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Section 2.5 Fixing of Record Date |
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2 |
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Section 2.6 Quorum; Adjournment |
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3 |
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Section 2.7 Conduct of Meetings |
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3 |
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Section 2.8 Voting; Voting of Shares in the Name of Two or More Persons |
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3 |
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Section 2.9 Proxies |
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4 |
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Section 2.10 Procedure for Nominations to the Board of Directors |
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4 |
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Section 2.11 Substitution of Nominees |
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6 |
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Section 2.12 Proposals Other Than Director Nominations |
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6 |
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Section 2.13 Inspectors of Election |
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7 |
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Section 2.14 Stockholders’ Action Without a Meeting |
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8 |
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ARTICLE 3 BOARD OF DIRECTORS |
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8 |
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Section 3.1 Number, Election and Term of Office |
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8 |
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Section 3.2 Duties and Powers |
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8 |
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Section 3.3 Regular Meetings; Notice |
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8 |
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Section 3.4 Special Meetings; Notice |
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9 |
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Section 3.5 Chairman |
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9 |
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Section 3.6 Quorum and Adjournments |
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9 |
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Section 3.7 Participation in Meetings by Conference Telephone |
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9 |
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Section 3.8 Conduct of Business |
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9 |
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Section 3.9 Directors’ Action Without A Meeting |
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10 |
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Section 3.10 Manner of Acting |
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10 |
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Section 3.11 Vacancies |
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10 |
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Section 3.12 Resignation |
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10 |
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Section 3.13 Removal |
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10 |
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Section 3.14 Salary |
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11 |
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Section 3.15 Contracts |
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11 |
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Section 3.16 Committees |
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11 |
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ARTICLE 4 OFFICERS |
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11 |
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Section 4.1 Number, Qualifications, Election and Term of Office |
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11 |
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Section 4.2 Resignation |
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12 |
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Section 4.3 Removal |
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12 |
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Section 4.4 Vacancies |
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12 |
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Section 4.5 Duties of Officers |
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12 |
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ARTICLE 5 CAPITAL STOCK |
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13 |
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Section 5.1 Certificates of Stock |
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13 |
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Section 5.2 Transfer Agent and Registrar |
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14 |
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Section 5.3 Registration and Transfer of Shares |
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14 |
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i
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Section 5.4 Lost, Destroyed and Mutilated Certificates |
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14 |
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Section 5.5 Holder of Record |
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15 |
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ARTICLE 6 DIVIDENDS |
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15 |
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ARTICLE 7 MISCELLANEOUS |
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15 |
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Section 7.1 Inspection of Corporate Record |
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15 |
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Section 7.2 Checks, Drafts, Etc |
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15 |
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Section 7.3 Contracts, Etc., How Executed |
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15 |
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Section 7.4 Representation of Shares of Stock of Other Corporations |
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16 |
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Section 7.5 Inspection, of Bylaws |
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16 |
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Section 7.6 Conflict |
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16 |
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ARTICLE 8 RESTRICTIONS ON TRANSFER OF SHARES |
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16 |
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Section 8.1 Definitions |
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16 |
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Section 8.2 Transfer And Ownership Restrictions |
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18 |
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Section 8.3 Exceptions |
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19 |
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Section 8.4 Excess Securities |
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19 |
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Section 8.5 Transfer To Agent |
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20 |
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Section 8.6 Application Of Proceeds And Prohibited Distributions |
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20 |
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Section 8.7 Modification Of Remedies For Certain Indirect Transfers |
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21 |
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Section 8.8 Legal Proceedings; Prompt Enforcement |
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21 |
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Section 8.9 Liability |
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22 |
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Section 8.10 Obligation To Provide Information |
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22 |
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Section 8.11 Legends |
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22 |
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Section 8.12 Authority Of Board Of Directors |
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23 |
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Section 8.13 Reliance |
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24 |
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Section 8.14 Benefits Of This Article 8 |
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24 |
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Section 8.15 Severability |
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24 |
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Section 8.16 Waiver |
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24 |
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ARTICLE 9 FISCAL YEAR |
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25 |
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ARTICLE 10 CORPORATE SEAL |
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25 |
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ARTICLE 11 RELIANCE UPON BOOKS, REPORTS AND RECORDS |
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25 |
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ARTICLE 12 AMENDMENTS |
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25 |
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ii
AMENDED AND RESTATED
BYLAWS
OF
[REORGANIZED FREMONT]
ARTICLE 1
OFFICES
The office of [Reorganized Fremont], a Nevada corporation (the “Corporation”) shall be located
in the City and State designated in the Corporation’s Articles of Incorporation, as amended. The
Corporation may also maintain offices at such other places within or without the United States as
the Board of Directors may, from time to time, determine.
ARTICLE 2
SHAREHOLDERS
Section 2.1 Place of Meetings
Meetings of shareholders of the Corporation shall be held at such place as may be designated
by the President or the Chief Executive Officer or the Board, or by the written consent of all
shareholders entitled to vote thereat given either before or after the meeting and filed with the
Secretary of the Corporation.
Section 2.2 Annual Meetings
The annual meeting of shareholders of the Corporation for the election of directors and the
transaction of any other business which may properly come before such meeting shall be held each
year on a date and at a time to be designated by the Board. Failure to hold the annual meeting
shall not cause a forfeiture or dissolution of the Corporation.
Section 2.3 Special Meetings
Special meetings of shareholders, for any purpose or purposes, may be called at any time only
by the Chairman, the President or the Chief Executive Officer, by an action of the board of
directors of the Corporation then in office (the “Board”), or by a shareholder or group of
shareholders holding collectively 35% of the outstanding shares. Special meetings shall be held on
the date and at the time and place as may be designated by the Board. At a special meeting, no
business shall be transacted and no corporate action shall be taken other than that stated in the
notice of meeting.
1
Section 2.4 Notice of Meetings
(a) Except as otherwise provided by the Nevada Revised Statutes, written notice of each meeting of
stockholders, whether annual or special, stating the time when and place where it is to be held,
shall be served either personally or by mail, not less than ten (10) or more than sixty (60) days
before the date on which the meeting is to be held, upon each stockholder of record entitled to
vote at such meeting, and to any other stockholder to whom the giving of notice may be required by
law. Notice of a special meeting shall also state the purpose or purposes for which the meeting is
called, and shall indicate that it is being issued by, or at the direction of, the person or
persons calling the meeting. If, at any meeting, action is proposed to be taken that would, if
taken, entitle stockholders to receive payment for their shares pursuant to the Nevada Revised
Statutes, the notice of such meeting shall include a statement of that purpose and to that effect.
If mailed, such notice shall be directed to each such stockholder at his address, as it appears on
the records of the stockholders of the Corporation, unless he shall have previously filed with the
Secretary of the Corporation a written request that notices intended for him be mailed to some
other address, in which case, it shall be mailed to the address designated in such request.
(b) Notice of any meeting need not be given to any person who may become a stockholder of record
after the mailing of such notice and prior to the meeting, or to any stockholder who attends such
meeting, in person or by proxy, or to any stockholder who, in person or by proxy, submits a signed
waiver of notice either before or after such meeting. Notice of any adjourned meeting of
stockholders need not be given, unless otherwise required by statute.
Section 2.5 Fixing of Record Date
For the purpose of determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive payment of any
dividend or other distribution or the allotment of any rights, or in order to make a determination
of shareholders for any other proper purpose, the Board shall fix a date as the record date for any
such determination of shareholders, which date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board. Such date in any case shall be not more than sixty
(60) days, and in the case of a meeting of shareholders not less than ten (10) days, prior to the
date of the meeting or event for the purposes of which it is fixed. When a record date is so fixed,
only shareholders of record on that date shall be entitled to notice of and to vote at the meeting,
or to receive the dividend, other distribution or the allotment of rights, or to exercise rights,
as the case may be, notwithstanding any transfer of any shares of stock on the books of the
Corporation after the record date. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this Section 2.5, such determination shall,
unless otherwise provided by the Board, also apply to any adjournment thereof. If no record date is
fixed, (a) the record date for determining shareholders entitled to notice of or vote at a meeting
of shareholders shall be at the close of business on the day preceding the day on which the notice
is given, or, if notice is waived, at the close of business on the day preceding the day on which
the meeting is held, and (b) the record date for determining shareholders for any other purpose
shall be at the close of business on the day on which the Board adopts the resolution relating
thereto.
2
Section 2.6 Quorum; Adjournment
The holders of record of a majority of the total number of votes eligible to be cast in the
election of directors, represented in person or by proxy, shall constitute a quorum for the
transaction of business at any meeting of shareholders, except as otherwise provided by law, these
Bylaws or the Articles of Incorporation. In the absence of a quorum, a majority of the number of
votes so represented at the meeting of shareholders may adjourn the meeting from time to time, but
no other business may be transacted at any such meeting. When a meeting of shareholders is
adjourned, it shall not be necessary to give any notice of the time and place of the adjourned
meeting or of the business to be transacted thereat, other than an announcement at the meeting at
which such adjournment is taken, provided, that if such adjournment is for more than sixty (60)
days, a notice of the adjourned meeting shall be given to each shareholder of record entitled to
vote at the meeting as in the case of an original meeting. At such adjourned meeting at which a
quorum is present, any business may be transacted that might have been transacted at the meeting as
originally called. When a quorum is once present to organize a meeting of shareholders, such quorum
is not broken by the subsequent withdrawal of any shareholders.
Section 2.7 Conduct of Meetings
The Chairman shall serve as chairman at all meetings of the shareholders or, if the Chairman
is absent or otherwise unable to so serve, the President or Chief Executive Officer shall serve as
chairman, unless another person is appointed chairman of the meeting by a majority of the entire
Board. The Secretary or, in his or her absence, such other person as the chairman of the meeting
shall appoint, shall serve as secretary of the meeting. The chairman of the meeting shall conduct
all meetings of the shareholders in accordance with the best interests of the Corporation and shall
have the authority and discretion to establish reasonable procedural rules for the conduct of such
meetings, including such regulation of the manner of voting and the conduct of discussion as he or
she shall deem appropriate. The chairman of the meeting shall also have the authority to adjourn
the meeting from time to time and from place to place as he or she may deem necessary and in the
best interests of the Corporation.
Section 2.8 Voting; Voting of Shares in the Name of Two or More Persons
Except for the election of directors or as otherwise provided by applicable law or regulation,
the Articles of Incorporation or these Bylaws, at all meetings of shareholders, all matters shall
be determined by a vote of the holders of a majority of votes cast at a meeting of stockholders by
the holders of shares entitled to vote thereon. Directors shall, except as otherwise required by
law, these Bylaws or the Articles of Incorporation, be elected by a plurality of the votes cast by
each class of shares entitled to vote at a meeting of shareholders, present and entitled to vote in
the election. Except as otherwise provided by statute or by the Articles of Incorporation, at each
meeting of stockholders, each holder of record of stock of the Corporation entitled to vote
thereat, shall be entitled to one vote for each share of stock registered in his name on the books
of the Corporation.
If ownership of a share of voting stock of the Corporation stands in the name of two or more
persons, in the absence of written directions to the Corporation to the contrary, any one or more
of such shareholders may cast, in person or by proxy, all votes to which such ownership is
3
entitled. If an attempt is made to cast conflicting votes by the several persons in whose
names shares of stock stand, the vote or votes to which those persons are entitled shall be cast as
directed by a majority of those holding such stock and present, in person or by proxy, at such
meeting. If such conflicting votes are evenly split on any particular matter, each faction may vote
the securities in question proportionally, or any person voting the shares, or a beneficiary, if
any, may apply to such court as may have jurisdiction to appoint an additional person to act with
the persons so voting the shares, which shall then be voted as determined by a majority of such
persons and the person appointed by such court.
Section 2.9 Proxies
Each stockholder entitled to vote or to express consent or dissent without a meeting may do so
by proxy; provided, however, that the instrument authorizing such proxy to act shall have been
executed in writing by the stockholder himself, or by his attorney-in-fact thereunto duly
authorized in writing. No proxy shall be valid after the expiration of eleven months from the date
of its execution, unless the person executing it shall have specified therein the length of time it
is to continue in force. Such instrument shall be exhibited to the Secretary at the meeting and
shall be filed with the records of the Corporation.
Section 2.10 Procedure for Nominations to the Board of Directors
(1) No person will be eligible for election, or elected, as a director of the Corporation
unless nominated in accordance with the procedures set forth in this Section 2.10.
(2) Subject to the provisions hereof, the Nominating and Governance Committee shall select,
and recommend to the Board for its approval, nominees for election as directors. Provided the
Nominating and Governance Committee makes such nominations, no nominations for directors except
those made by the Nominating and Governance Committee and approved by the Board shall be voted upon
at the annual meeting of shareholders unless other nominations by shareholders are made in
accordance with the provisions of this Section 2.10.
(3) Nominations of individuals for election to the Board at an annual meeting of shareholders
may be made by any shareholder of record of the Corporation entitled to vote for the election of
directors at such meeting who provides timely notice in writing to the Secretary as set forth in
this Section 2.11. To be timely, a nomination by a shareholder must (i) be sent to the Corporation
in compliance with the requirements of Rule 14a-8 under the 1934 Act, if the proposal is submitted
under such rule, or (ii) if not, be mailed and received by, or delivered to, the Secretary at the
principal executive offices of the Corporation not later than the close of business on the 90th day
prior to the anniversary date of the most recent annual meeting of shareholders or, if the date of
the annual meeting of shareholders is more than 30 days earlier or later than such anniversary
date, then not later than the close of business on the 75th day prior to the anniversary date of
the most recent annual meeting of shareholders.
(4) For purposes of this Section 2.10, notice shall be deemed to be first given to
shareholders when disclosure of such date of the meeting of shareholders is first made in a press
release reported to Dow Jones News Services, Associated Press or comparable national news service,
or in a document publicly filed by the Corporation with the Securities and Exchange
4
Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 (the
“1934 Act”).
(5) Such shareholder’s notice must set forth (i) as to each person, whom the stockholder
proposes to nominate for election or re-election as a director: (A) the name, age, business address
and residence address of such person, (B) the principal occupation or employment of such person,
(C) the class and number of shares of the Corporation which are beneficially owned by such person,
(D) a description of all arrangements or understandings between the stockholder and each nominee
and any other person or person (naming such person or persons) pursuant to which the nominations
are to be made by the stockholder, and (E) any other information relating to such person that is
required to be disclosed in solicitations of proxies for elections of directors, or is otherwise
required, in each case pursuant to Regulation 14A (or any successor thereto) under the 1934 Act
(including without limitation such person’s written consent to being named in the proxy statement,
if any, as a nominee and to serving as a director if elected); (ii) as to such stockholder giving
notice: (W) the name and address, as they appear on the Corporation’s books, of the stockholder,
(X) the class and number of shares of the Corporation which are owned beneficially by such
stockholder, (Y) any other information that is required to be provided by the stockholder pursuant
to Regulation 14A (or any successor thereto) under the 1934 Act in such stockholder’s capacity as a
proponent of a stockholder nomination, and (Z) a representation whether the shareholder intends or
is part of a group which intends to (1) deliver a proxy statement and/or form of proxy to holders
of at least the percentage of the Corporation’s outstanding capital stock required to elect the
nominee and/or (2) otherwise solicit proxies from shareholders in support of such nomination; and
(iii) the identification of any person employed, retained or to be compensated by the shareholder
submitting the nomination or by the person nominated, or any person acting on his or her behalf to
make solicitations or recommendations to shareholders for the purpose of assisting in the election
of such director, and a brief description of the terms of such employment, retainer or arrangement
for compensation.
(6) At the request of the Secretary, any person nominated by the Nominating and Governance
Committee for election as a director shall furnish to the Secretary that information required to be
set forth in a shareholder’s notice of nomination which pertains to the nominee together with the
required written consent. The Corporation may also require any proposed nominee to furnish such
other information as it may reasonably require, in order to determine the eligibility of such
proposed nominee to serve as a director of the Corporation.
(7) Upon the receipt of a stockholder nomination made in accordance with the procedures
prescribed by these Bylaws, such nomination shall be evaluated by the Corporation’s Nominating and
Governance Committee (or any successor thereto) in accordance with its evaluation procedures, in
order to determine whether such nominee should be included in the slate of persons recommended by
the Board of Directors to the Corporation’s stockholders for election at the next annual meeting.
(8) The chairman of the meeting will, if the facts warrant, determine and declare at the
meeting that a nomination was not made in accordance with the procedures prescribed by these
Bylaws, and if the Chairman so determines, the chairman will so declare at the meeting, and the
defective nomination will be disregarded and not considered.
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Section 2.11 Substitution of Nominees
In the event that a person is validly designated as a nominee in accordance with Section 2.10
and shall thereafter become unwilling or unable to stand for election to the Board, the Board, upon
recommendation by the Nominating and Governance Committee, may designate a substitute nominee upon
delivery of a written notice to the Secretary setting forth such information regarding such
substitute nominee as would have been required to be delivered to the Secretary pursuant to Section
2.10 had such substitute nominee been initially proposed as a nominee. Such notice shall include a
signed consent to serve as a director of the Corporation, if elected, of each such substituted
nominee.
Section 2.12 Proposals Other Than Director Nominations
(1) Any new business to be taken up at the annual meeting at the request of the Chief
Executive Officer or the President or by resolution of at least three-fourths of the directors then
in office shall be stated in writing and filed with the Secretary at least fifteen (15) days before
the date of the annual meeting, and all business so stated, proposed and filed shall be considered
at the annual meeting, but, except as provided in this Section 2.12, no other proposal shall be
acted upon at the annual meeting.
(2) Any proposal offered by a shareholder may be made at the annual meeting and the same may
be discussed and considered, but unless properly brought before the meeting such proposal shall not
be acted upon at the meeting. For a proposal to be properly brought before an annual meeting by a
shareholder, the shareholder must be a shareholder of record and have given timely notice thereof
in writing to the Secretary. To be timely, a proposal offered by a shareholder must (i) be sent to
the Corporation in compliance with the requirements of Rule 14a-8 under the 1934 Act, if the
proposal is submitted under such rule, or (ii) if not, be mailed and received by, or delivered to,
the Secretary at the principal executive offices of the Corporation not later than the close of
business on the 90th day prior to the anniversary date of the most recent annual meeting of
shareholders or, if the date of the annual meeting of shareholders is more than 30 days earlier or
later than such anniversary date, then not later than the close of business on the 75th day prior
to the anniversary date of the most recent annual meeting of shareholders.
(3) For purposes of this Section 2.12, notice shall be deemed to be first given to
shareholders when disclosure of such date of the meeting of shareholders is first made in a press
release reported to Dow Jones News Services, Associated Press or comparable national news service,
or in a document publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the 1934 Act.
(4) A shareholder’s notice to the Secretary shall set forth as to the matter the shareholder
proposes to bring before the annual meeting (a) a brief description of the proposal desired to be
brought before the annual meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such shareholder and the beneficial owner, if any, on whose
behalf the proposal is made; (b) the name and address of the shareholder proposing such business;
(c) the class and number of shares of the Corporation which are owned of record by the shareholder
and the dates upon which he or she acquired such shares; (d) the
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identification of any person employed, retained, or to be compensated by the shareholder
submitting the proposal, or any person acting on his or her behalf, to make solicitations or
recommendations to shareholders for the purpose of assisting in the passage of such proposal, and a
brief description of the terms of such employment, retainer or arrangement for compensation; (e) a
representation that the shareholder is a holder of record of stock of the Corporation entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting to propose such new
business; (f) a representation whether the shareholder intends or is part of a group which intends
to (1) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the
Corporation’s outstanding capital stock required to approve or adopt the proposal and/or (2)
otherwise solicit proxies from shareholders in support of such proposal; and (g) all such other
information regarding such proposal as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission or required to be delivered
to the Corporation pursuant to the proxy rules of the Securities and Exchange Commission (whether
or not the Corporation is then subject to such rules).
(5) This provision shall not prevent the consideration and approval or disapproval at an
annual meeting of reports of officers, directors and committees of the Board or the management of
the Corporation, but in connection with such reports, no new business shall be acted upon at such
annual meeting unless stated and filed as herein provided. This provision shall not constitute a
waiver of any right of the Corporation under the proxy rules of the Securities and Exchange
Commission or any other rule or regulation to omit a shareholder’s proposal from the Corporation’s
proxy materials.
(6) The chairman of the meeting shall, if the facts warrant, determine and declare to the
meeting that any new business was not properly brought before the meeting in accordance with the
procedures prescribed by these Bylaws, and, if the chairman so determines, the chairman will so
declare at the meeting, and such new business will be disregarded and not considered.
Section 2.13 Inspectors of Election
In advance of any meeting of shareholders, the Board shall, to the extent permitted by
applicable law, appoint one or more persons, other than officers, directors or nominees for office,
as inspectors of election to act at such meeting or any adjournment thereof. Such appointment shall
not be altered at the meeting. If inspectors of election are not so appointed, the chairman of the
meeting shall make such appointment at the meeting. If any person appointed as inspector fails to
appear or fails or refuses to act at the meeting, the vacancy so created may be filled by
appointment by the Board in advance of the meeting or at the meeting by the chairman of the
meeting. The duties of the inspectors of election shall include determining the number of shares
outstanding and the voting power of each, the shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, receiving votes, ballots or consents, hearing and
deciding all challenges and questions arising in connection with the right to vote, counting and
tabulating all votes, ballots or consents, determining the results and doing such acts as are
proper to the conduct of the election or the vote with fairness to all shareholders. Any report or
certificate made by them shall be prima facie evidence of the facts stated and of the vote as
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certified by them. Each inspector shall be entitled to a reasonable compensation for his or
her services, to be paid by the Corporation.
Section 2.14 No Shareholders’ Action Without a Meeting
The shareholders shall not take any action without a meeting properly held in accordance with
the Nevada Revised Statutes and these Bylaws.
ARTICLE 3
BOARD OF DIRECTORS
Section 3.1 Number, Election and Term of Office
(a) The number of directors which shall constitute the whole Board of Directors shall be such
number as the Board of Directors shall from time to time have designated, except that in the
absence of any such designation, such number shall be not less than five (5) and not more than
eleven (11).
(b) Except as may otherwise be provided herein or in the Articles of Incorporation, the members of
the Board of Directors of the Corporation, who need not be stockholders, shall be elected by a
plurality of the votes cast at a meeting of stockholders, by the holders of shares, present in
person or by proxy, entitled to vote in the election.
(c) Each director shall hold office until the annual meeting of the stockholders next succeeding
his election, and until his successor is elected and qualified, or until his prior death,
resignation or removal.
Section 3.2 Duties and Powers
The Board of Directors shall be responsible for the control and management of the affairs,
property and interests of the Corporation, and may exercise all powers of the Corporation, except
as are in the Articles of Incorporation or by statute expressly conferred upon or reserved to the
stockholders.
Section 3.3 Regular Meetings; Notice
(a) Regular meetings of the Board of Directors shall be held at such place or places, on such date
or dates, and at such time or times as shall have been established by the Board of Directors and
publicized among all directors.
(b) Notice of any regular meeting of the Board of Directors shall not be required to be given and,
if given, need not specify the purpose of the meeting; provided, however, that in case the Board of
Directors shall fix or change the time or place of any regular meeting, notice of such action shall
be given to each director who shall not have been present at the meeting at which such action was
taken within the time limited, and in the manner set forth in paragraph (b) Section 4 of this
Article III, with respect to special meetings, unless such notice shall be waived in the manner set
forth in paragraph (c) of such Section 4.
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Section 3.4 Special Meetings; Notice
(a) Special meetings of the Board of Directors shall be held whenever called by the President or by
two of the directors, at such time and place as may be specified in the respective notices or
waivers of notice thereof.
(b) Except as otherwise required by statute, notice of special meetings shall be mailed directly to
each director, addressed to him at his residence or usual place of business, at least forty-eight
(48) hours before the meeting is to be held, or shall be sent to him at such place by facsimile,
electronic mail or other electronic means, or shall be delivered to him personally or given to him
orally, not later than the day before the day on which the meeting is to be held.
(c) Notice of any meeting of the Board of Directors may be waived by any director at any time, by a
signed writing, delivered to the Corporation for inclusion in the minutes, either before or after
the meeting. Attendance or participation by a director at a meeting shall constitute a waiver of
any required notice of the meeting unless the director promptly objects to holding the meeting or
to the transaction of any business on the grounds that the meeting was not lawfully convened and
the director does not thereafter vote for or assent to action taken at the meeting. Notice of any
adjourned meeting shall not be required to be given.
Section 3.5 Chairman
At all meetings of the Board of Directors, the Chairman of the Board, if any and if present,
shall preside. If there shall be no Chairman, or he shall be absent, then the President shall
preside, and in his absence, a Chairman chosen by the directors shall preside.
Section 3.6 Quorum and Adjournments
(a) At all meetings of the Board of Directors, the presence of a majority of the entire Board shall
be necessary and sufficient to constitute a quorum for the transaction of business, except as
otherwise provided by law, by the Articles of Incorporation, or by these Bylaws.
(b) A majority of the directors present at the time and place of any regular or special meeting,
although less than a quorum, may adjourn the same from time to time without notice, until a quorum
shall be present.
Section 3.7 Participation in Meetings by Conference Telephone
Members of the Board of Directors, or of any committee thereof, may participate in a meeting
of such Board or committee by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other and such participation
shall constitute presence in person at such meeting.
Section 3.8 Conduct of Business
At any meeting of the Board of Directors, business shall be transacted in such order and
manner as the Board may from time to time determine, and all matters shall be determined by the
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vote of a majority of the directors present, except as otherwise provided herein or required
by law.
Section 3.9 Directors’ Action Without A Meeting
The Board of Directors or a committee thereof may take any action without a meeting that it
could properly take at a meeting if by executing a resolution setting forth the action signed by
all of the directors, or all of the members of the committee, as the case may be, either before or
after the action is taken, and if the signed resolution is delivered to the Corporation for
inclusion in the minutes or filing with the corporate records. Such action shall be effective upon
the signing of a resolution by the last director to sign, unless the consent specifies a later
effective date.
Section 3.10 Manner of Acting
(a) At all meetings of the Board of Directors, each director present shall have one vote,
irrespective of the number of shares of stock, if any, which he may hold.
(b) Except as otherwise provided by statute, by the Articles of Incorporation, or by these Bylaws,
the action of a majority of the directors present at any meeting at which a quorum is present shall
be the act of the Board of Directors. Any action authorized, in writing, by all of the directors
entitled to vote thereon and filed with the minutes of the corporation shall be the act of the
Board of Directors with the same force and effect as if the same had been passed by unanimous vote
at a duly called meeting of the Board.
Section 3.11 Vacancies
Any vacancy in the Board of Directors occurring by reason of an increase in the number of
directors, or by reason of the death, resignation, disqualification, removal (unless a vacancy
created by the removal of a director by the stockholders shall be filled by the stockholders at the
meeting at which the removal was effected) or inability to act of any director, or otherwise, shall
be filled for the unexpired portion of the term by a majority vote of the remaining directors,
though less than a quorum, at any regular meeting or special meeting of the Board of Directors
called for that purpose.
Section 3.12 Resignation
Any director may resign at any time by giving written notice to the Board of Directors, the
President or the Secretary of the Corporation. Unless otherwise specified in such written notice,
such resignation shall take effect upon receipt thereof by the Board of Directors or such officer,
and the acceptance of such resignation shall not be necessary to make it effective.
Section 3.13 Removal
Any director may be removed with or without cause at any time by the affirmative vote of
stockholders holding of record in the aggregate at least two-thirds (2/3) of the outstanding shares
of the Corporation at a special meeting of the stockholders called for that purpose.
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Section 3.14 Salary
No stated salary shall be paid to directors, as such, for their services, but by resolution of
the Board of Directors a fixed sum and expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the Board; provided, however, that nothing herein
contained shall be construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefore.
Section 3.15 Contracts
(a) No contract or other transaction between this Corporation and any other Corporation shall be
impaired, affected or invalidated, nor shall any director be liable in any way by reason of the
fact that any one or more of the directors of this Corporation is or are interested in, or is a
director or officer, or are directors or officers of such other Corporation, provided that such
facts are disclosed or made known to the Board of Directors.
(b) Any director, personally and individually, may be a party to or may be interested in any
contract or transaction of this Corporation, and no director shall be liable in any way by reason
of such interest, provided that the fact of such interest be disclosed or made known to the Board
of Directors, and provided that the Board of Directors shall authorize, approve or ratify such
contract or transaction by the vote (not counting the vote of any such director) of a majority of a
quorum, notwithstanding the presence of any such director at the meeting at which such action is
taken. Such director or directors may be counted in determining the presence of a quorum at such
meeting. This Section shall not be construed to impair or invalidate or in any way affect any
contract or other transaction which would otherwise be valid under the law (common, statutory or
otherwise) applicable thereto.
Section 3.16 Committees
The Board of Directors, by resolution adopted by a majority of the entire Board, may from time
to time designate from among its members an executive committee and such other committees, and
alternate members thereof, as they may deem desirable, each consisting of three or more members,
with such powers and authority (to the extent permitted by law) as may be provided in such
resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE 4
OFFICERS
Section 4.1 Number, Qualifications, Election and Term of Office
(a) The officers of the Corporation shall consist of a President, a Secretary, a Treasurer, and
such other officers, including a Chief Executive Officer, Chief Financial Officer, Chairman of the
Board of Directors, and one or more Vice Presidents, as the Board of Directors may from time to
time deem advisable. Any officer other than the Chairman of the Board of Directors may be, but is
not required to be, a director of the Corporation. Any two or more offices may be held by the same
person.
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(b) The officers of the Corporation shall be elected by the Board of Directors, which shall
consider that subject at its first meeting after every annual meeting of stockholders.
(c) Each officer shall hold office until the annual meeting of the Board of Directors next
succeeding his election, and until his successor shall have been elected and qualified, or until
his death, resignation or removal.
Section 4.2 Resignation
Any officer may resign at any time by giving written notice of such resignation to the Board
of Directors, or to the President or the Secretary of the Corporation. Unless otherwise specified
in such written notice, such resignation shall take effect upon receipt thereof by the Board of
Directors or by such officer, and the acceptance of such resignation shall not be necessary to make
it effective.
Section 4.3 Removal
Any officer may be removed, either with or without cause, and a successor elected by a
majority vote of the Board of Directors at any time.
Section 4.4 Vacancies
A vacancy in any office by reason of death, resignation, inability to act, disqualification,
or any other cause, may at any time be filled for the unexpired portion of the term by a majority
vote of the Board of Directors.
Section 4.5 Duties of Officers
Unless otherwise prescribed by the Board of Directors, the duties of the officers shall be as
follows:
(a) Chairman of the Board. The Chairman of the Board, if one is elected, shall preside at meetings
of the Board of Directors and of the stockholders, shall be responsible for carrying out the plans
and directives of the Board of Directors, shall report to and consult with the Board of Directors,
and, if the Board so resolves, shall be the Chief Executive Officer. The Chairman of the Board
shall have such other powers and duties as the Board of Directors may from time to time prescribe.
(b) Chief Executive Officer The Chief Executive Officer shall be so designated by the Board and may
also hold the title of Chairman of the Board, and/or President. The Chief Executive Officer of the
Corporation, subject to the direction of the Board, shall be responsible for assuring that the
policy decisions of the Board are implemented as formulated. The Chief Executive Officer shall be
responsible for managing the day-to-day business operations of the Corporation consistent with the
policies, standards and plans of the Corporation and any specific instruction or directions of the
Board, and shall be responsible, in consultation with such officers and members of the Board as he
or she deems appropriate, for planning the growth of the Corporation.
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(c) President. The President shall exercise the usual executive powers and duties pertaining to the
office of President, subject to the Board of Directors, including but not limited to; general
control over the day to day management of the corporation; signing and countersigning all
certificates, contracts and other instruments of the corporation; and any other powers or duties
assigned by the Board of Directors from time to time. In the absence of a Chairman of the Board,
the President shall preside at meetings of the Board of Directors and of the stockholders, perform
the other duties of the Chairman of the Board prescribed in this Section, and perform such other
duties as the Board of Directors may from time to time designate.
(d) Treasurer. The Treasurer shall have the care and custody of, and be responsible for, all funds
and securities of the Corporation and shall cause to be kept regular books of account. The
Treasurer shall cause to be deposited all funds and other valuable effects in the name of the
Corporation in such depositories as may be designated by the Board of Directors and disperse funds
of the corporation in payment of the just demands against the corporation, or as may be ordered by
the Board of Directors, making proper vouchers for such disbursements and shall render to the Board
of Directors, from time to time as may be required of him, an account of all transactions as
treasurer and of the financial condition of the corporation. In general, the Treasurer shall
perform all of the duties incident to the office of Treasurer, and such other duties as from time
to time may be assigned by the Board of Directors.
(e) Chief Financial Officer. The Chief Financial Officer shall perform all acts and duties as are
generally incident to the office of the Chief Financial Officer. The Chief Financial Officer may be
the Treasurer of the Corporation, as determined by the Board.
(f) Vice President. Each Vice President shall perform such duties as the Board of Directors may
from time to time designate. In addition, the Vice President, or if there is more than one, the
most senior Vice President available, shall act as President in the absence or disability of the
President.
(g) Secretary. The Secretary shall be responsible for and shall keep, personally or with the
assistance of others, records of the proceedings of the directors and stockholders; authenticate
records of the Corporation; attest all certificates of stock in the name of the Corporation; keep
the corporate seal, if any, and affix the same to certificates of stock and other proper documents;
keep a record of the issuance of certificates of stock and the transfers of the same; shall issue
notices for all meetings as required by the Bylaws; shall have charge of the corporate books; and
shall make such reports and perform such other duties as are incident
to the office, or properly
required by the Board of Directors.
ARTICLE 5
CAPITAL STOCK
Section 5.1 Certificates of Stock
Certificates representing shares of stock may be issued by the Corporation and shall be in
such form as shall be determined by the Board. Each certificate shall state that the Corporation
will furnish to any shareholder upon request and without charge a statement of the powers,
designations, preferences and relative, participating, optional or other special rights of the
shares
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of each class or series of stock and the qualifications or restrictions of such preferences
and/or rights, or shall set forth such statement on the certificate itself. The certificates shall
be numbered in the order of their issue and entered in the books of the Corporation or its transfer
agent or agents as they are issued. Each certificate shall state the registered holder’s name and
the number and class of shares and shall be signed by the Chairman or the President and the
Secretary or any Assistant Secretary, and may, but need not, bear the seal of the Corporation or a
facsimile thereof. Any or all of the signatures of such officers on the certificates may be
facsimiles, provided the Corporation is not acting as Registrar with respect to the registration
thereof. In case any officer or officers who shall have signed any such certificate shall cease to
be such officer or officers of the Corporation, whether because of death, resignation or otherwise,
before such certificate shall have been delivered by the Corporation, such certificate may
nevertheless be adopted by the Corporation and be issued and delivered as though the person or
persons who signed such certificate or certificates had not ceased to be such officer or officers
of the Corporation.
Section 5.2 Transfer Agent and Registrar
The Board shall have the power to appoint one or more Transfer Agents and Registrars for the
transfer and registration of certificates of stock of any class and may require that stock
certificates be countersigned and registered by one or more of such Transfer Agents and Registrars.
Whenever any stock certificate is countersigned or otherwise authenticated by a Transfer Agent, and
by a Registrar, then a facsimile of the signatures of the Transfer Agent or the Registrar of the
Corporation may be printed or lithographed upon the certificate in lieu of the actual signatures.
Section 5.3 Registration and Transfer of Shares
Subject to the provisions of the Articles of Incorporation of the Corporation, the name of
each person owning a share of the capital stock of the Corporation shall be entered on the books of
the Corporation together with the number of shares held by him or her, the numbers of the
certificates covering such shares and the dates of issue of such certificates. Subject to the
provisions of the Articles of Incorporation of the Corporation, the shares of stock of the
Corporation shall be transferable on the books of the Corporation by the holders thereof in person,
or by their duly authorized attorneys or legal representatives, on surrender and cancellation of
certificates for a like number of shares, accompanied by an assignment or power of transfer
endorsed thereon or attached thereto, duly executed, with such guarantee or proof of the
authenticity of the signature as the Corporation or its agents may reasonably require and with
proper evidence of payment of any applicable transfer taxes. Subject to the provisions of the
Articles of Incorporation of the Corporation, a record shall be made of each transfer.
Section 5.4 Lost, Destroyed and Mutilated Certificates
The holder of any shares of stock of the Corporation shall immediately notify the Corporation
of any loss, theft, destruction or mutilation of the certificates therefor. The Corporation may
issue, or cause to be issued, a new certificate of stock in the place of any certificate
theretofore issued by it alleged to have been lost, stolen or destroyed upon evidence satisfactory
to the Corporation of the loss, theft or destruction of the certificate and, in the case of
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mutilation, the surrender of the mutilated certificate. The Corporation may, in its discretion,
require the owner of the lost, stolen or destroyed certificate, or his or her legal
representatives, to give the Corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft, destruction or mutilation of any such
certificate and the issuance of such new certificate, or may refer such owner to such remedy or
remedies as he or she may have under the laws of the State of Nevada.
Section 5.5 Holder of Record
Subject to the provisions of the Articles of Incorporation of the Corporation, the Corporation
shall be entitled to treat the holder of record of any share or shares of stock as the holder
thereof in fact and shall not be bound to recognize any equitable or other claim to or interest in
such shares on the part of any other person, whether or not it shall have express or other notice
thereof, except as otherwise expressly provided by law.
ARTICLE 6
DIVIDENDS
The Board shall have the power, subject to the provisions of law and the requirements of the
Articles of Incorporation, to declare and pay dividends out of surplus (or, if no surplus exists,
out of net profits of the Corporation, for the fiscal year in which the dividend is declared and/or
the preceding fiscal year, except where there is an impairment of capital stock), to pay such
dividends to the shareholders in cash, in property or in shares of the capital stock of the
Corporation and to fix the date or dates for the payment of such dividends.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Inspection of Corporate Record
Shareholders may inspect such corporate records at such times and based upon such limitations
of such rights as may be set forth in the Nevada Revised Statutes Chapter 78 from time to time.
Section 7.2 Checks, Drafts, Etc.
All checks, drafts, bonds, bill of exchange, or other orders for payment of money, notes, or
other evidences of indebtedness issued in the name or payable to the Corporation shall be signed or
endorsed by such person or persons and in such manner as, from time to time, shall be determined by
resolution of the Board.
Section 7.3 Contracts, Etc., How Executed
The Board, except as in these Bylaws otherwise provided, may authorize any officer or
officers, agent or agents, to enter into any contract or execute any instrument or document in the
name of and on behalf of the Corporation, and such authority may be general or confined to
15
specific instances. Unless otherwise specifically determined by the Board or otherwise required by
law, formal contracts, promissory notes and other evidences of indebtedness, deeds of trust,
mortgages and corporate instruments or documents requiring the corporate seal, shall be executed,
signed or endorsed by the President or any Vice President and by the Secretary (or any Assistant
Secretary), the Chief Financial Officer or the Treasurer (or any Assistant Treasurer). The Board
may, however, authorize any one (1) of such officers to sign any of such instruments for and on
behalf of the Corporation, without necessity of countersignature; may designate officers or
employees of the Corporation, other than those named above, who may, in the name of the
Corporation, sign such instruments; and may authorize the use of facsimile signatures of any of
such persons. No officer, agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit to render it liable for any
purpose or to any amount except as specifically authorized in these Bylaws or by the Board in
accordance with these Bylaws.
Section 7.4 Representation of Shares of Stock of Other Corporations
The President or any Vice President and the Secretary or any Assistant Secretary of this
Corporation are authorized to vote, represent and exercise on behalf of this Corporation all rights
incident to any and all shares of stock of any other corporation or corporations standing in the
name of this Corporation. The authority herein granted to said officers to vote or represent on
behalf of this Corporation any and all shares of stock held by this Corporation in any other
corporation or corporations may be exercised either by such officers in person or by any persons
authorized so to do by proxy or power of attorney duly executed by said officers.
Section 7.5 Inspection, of Bylaws
The Corporation shall keep at the Registered Office the original or a copy of the Bylaws as
amended or otherwise altered to date, certified by the Secretary, which shall be open to inspection
by the shareholders at all reasonable times during office hours.
Section 7.6 Conflict
In the event of any conflict between any provision in these Bylaws and in the Corporation’s
Articles of Incorporation, the provision in the Articles shall control.
ARTICLE 8
RESTRICTIONS ON TRANSFER OF SHARES
Section 8.1 Definitions
As used in this Article 8, the following capitalized terms have the following meanings when
used herein with initial capital letters (and any references to any portions of Treasury Regulation
§§ 1.382-2T, 1.382-3 and 1.382-4 shall include any successor provisions):
(1) “4.9-percent Transaction” means any Transfer described in clause (a) or (b) of Section
8.2.
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(2) “4.9-percent Shareholder” a Person who owns 4.9% or more of the Corporation’s
then-outstanding Common Shares, whether directly or indirectly, and including shares such Person
would be deemed to constructively own or which otherwise would be aggregated with shares owned by
such Person pursuant to Section 382 of the Code, or any successor provision or replacement
provision and the Treasury Regulations thereunder.
(3) “Agent” has the meaning set forth in Section 8.5.
(4) “Common Shares” means any interest in Common Shares, par value $0.01 per share, of the
Corporation that would be treated as “stock” of the Corporation pursuant to Treasury Regulation §
1.382-2T(f)(18).
(5) “Code” means the United States Internal Revenue Code of 1986, as amended from time to
time, and the rulings issued thereunder.
(6) “Corporation Security” or “Corporation Securities” means (i) Common Shares, (ii) shares of
preferred stock issued by the Corporation (other than preferred stock described in Section
1504(a)(4) of the Code), (iii) warrants, rights, or options (including options within the meaning
of Treasury Regulation §§ 1.382-2T(h)(4)(v)) and 1.382-4 to purchase Securities of the Corporation,
and (iv) any Shares.
(7) “Effective Date” means the date of the adoption of this amendment by the Board of
Directors.
(8) “Excess Securities” has the meaning given such term in Section 8.4.
(9) “Expiration Date” means the earlier of (i) the repeal of Section 382 of the Code or any
successor statute if the Board of Directors determines that this Article 8 is no longer necessary
for the preservation of Tax Benefits, (ii) the beginning of a taxable year of the Corporation to
which the Board of Directors determines that no Tax Benefits may be carried forward or (iii) such
date as the Board of Directors shall fix in accordance with Section 8.12.
(10) “Percentage Share Ownership” means the percentage Share Ownership interest of any Person
or group (as the context may require) for purposes of Section 382 of the Code as determined in
accordance with the Treasury Regulation §§ 1.382-2T(g), (h), (j) and (k) and 1.382-4 or any
successor provision.
(11) “Person” means any individual, firm, corporation or other legal entity, including a group
of persons treated as an entity pursuant to Treasury Regulation § 1.382-3(a)(1)(i); and includes
any successor (by merger or otherwise) of such entity.
(12) “Prohibited Distributions” means any and all dividends or other distributions paid by the
Corporation with respect to any Excess Securities received by a Purported Transferee.
(13) “Prohibited Transfer” means any Transfer or purported Transfer of Corporation Securities
to the extent that such Transfer is prohibited and/or void under this Article 8.
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(14) “Public Group” has the meaning set forth in Treasury Regulation §1.382-2T(f)(13).
(15) “Purported Transferee” has the meaning set forth in Section 8.4.
(16) “Shares” means any interest that would be treated as “stock” of the Corporation pursuant
to Treasury Regulation § l.382-2T(f)(18).
(17) “Share- Ownership” means any direct or indirect ownership of Shares, including any
ownership by virtue of application of constructive ownership rules, with such direct, indirect, and
constructive ownership determined under the provisions of Section 382 of the Code and the
regulations thereunder.
(18) “Tax Benefits” means the net operating loss carryforwards, capital loss carryforwards,
general business credit carryforwards, alternative minimum tax credit carryforwards and foreign tax
credit carryforwards, as well as any loss or deduction attributable to a “net unrealized built-in
loss” of the Corporation or any direct or indirect subsidiary thereof, within the meaning of
Section 382 of the Code.
(19) “Transfer” means, any direct or indirect sale, transfer, assignment, conveyance, pledge
or other disposition or other action taken by a person, other than the Corporation, that alters the
Percentage Share Ownership of any Person. A Transfer also shall include the creation or grant of an
option (including an option within the meaning of Treasury Regulation §§ 1.382-2T(h)(4)(v) and
1.382-4). For the avoidance of doubt, a Transfer shall not include the creation or grant of an
option by the Corporation, nor shall a Transfer include the issuance of Shares by the Corporation.
(20) “Transferee” means any Person to whom Corporation Securities are Transferred.
(21) “Treasury Regulations” means the regulations, including temporary regulations or any
successor regulations promulgated under the Code, as amended from time to time.
Section 8.2 Transfer And Ownership Restrictions
In order to preserve the Tax Benefits, from and after the Effective Date of this Article 8 any
attempted Transfer of Corporation Securities prior to the Expiration Date and any attempted
Transfer of Corporation Securities pursuant to an agreement entered into prior to the Expiration
Date, shall be prohibited and void ab initio to the extent that, as a result of such Transfer (or
any series of Transfers of which such Transfer is a part), either (a) any Person or Persons would
become a 4.9-percent Shareholder, (b) the Percentage Share Ownership in the Corporation of any
4.9-percent Shareholder would be increased, of (c) any Shareholder holding 5% or more of the total
market value of the Corporate Securities Transfers, or agrees to Transfer, Corporate Securities;
provided, however, that nothing herein contained shall preclude the settlement of any transaction
in the Corporation Securities entered into through the facilities of the New York Stock Exchange,
Inc.
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Section 8.3 Exceptions
Notwithstanding anything to the contrary herein:
(1) Transfers to a Public Group (including a new Public Group created under Treasury
Regulation § 1.382-2T(j)(3)(i)) shall be permitted.
(2) The restrictions set forth in Section 8.2 shall not apply to an attempted Transfer that is
a 4.9-percent Transaction if the transferor or the Transferee obtains the written approval of the
Board of Directors or a duly authorized committee thereof. As a condition to granting its approval
pursuant to this Section 8.3 of Article 8, the Board of Directors, may, in its discretion, require
(at the expense of the transferor and/or Transferee) an opinion of counsel selected by the Board of
Directors that the Transfer shall not result in the application of any Section 382 of the Code
limitation on the use of the Tax Benefits; provided that the Board of Directors may grant such
approval notwithstanding the effect of such approval on the Tax Benefits if it determines that the
approval is in the best interests of the Corporation. The Board of Directors may impose any
conditions that it deems reasonable and appropriate in connection with such approval, including,
without limitation, restrictions on the ability of any Transferee to Transfer Shares acquired
through a Transfer. Approvals of the Board of Directors hereunder may be given prospectively or
retroactively. The Board of Directors, to the fullest extent permitted by law, may exercise the
authority granted by this Article 8 through duly authorized officers or agents of the Corporation.
Nothing in this Section 8.3 shall be construed to limit or restrict the Board of Directors in the
exercise of its fiduciary duties under applicable law.
Section 8.4 Excess Securities
(1) No employee or agent of the Corporation shall record any Prohibited Transfer, and the
purported transferee of such a Prohibited Transfer (the “Purported Transferee”) shall not be
recognized as a shareholder of the Corporation for any purpose whatsoever in respect of the
Corporation Securities which are the subject of the Prohibited Transfer (the “Excess Securities”).
Until the Excess Securities are acquired by another person in a Transfer that is not a Prohibited
Transfer, the Purported Transferee shall not be entitled with respect to such Excess Securities to
any rights of shareholders of the Corporation, including, without limitation, the right to vote
such Excess Securities and to receive dividends or distributions, whether liquidating or otherwise,
in respect thereof, if any, and the Excess Securities shall be deemed to remain with the transferor
unless and until the Excess Securities are transferred to the Agent pursuant to Section 8.5 or
until an approval is obtained under Section 8.3. After the Excess Securities have been acquired in
a Transfer that is not a Prohibited Transfer, the Corporation Securities shall cease to be Excess
Securities. For this purpose, any Transfer of Excess Securities not in accordance with the
provisions of Sections 8.4 or 8.5 shall also be a Prohibited Transfer.
(2) The Corporation may require as a condition to the registration of the Transfer of any
Corporation Securities or the payment of any distribution on any Corporation Securities that the
proposed Transferee or payee furnish to the Corporation all information reasonably requested by the
Corporation with respect to its direct or indirect ownership interests in such Corporation
Securities. The Corporation may make such arrangements or issue such instructions to its share
transfer agent as may be determined by the Board of Directors to be necessary or advisable to
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implement this Article 8, including, without limitation, authorizing such transfer agent to
require an affidavit from a Purported Transferee regarding such Person’s actual and constructive
ownership of shares and other evidence that a Transfer will not be prohibited by this Article 8 as
a condition to registering any transfer.
Section 8.5 Transfer To Agent
If the Board of Directors determines that a Transfer of Corporation Securities constitutes a
Prohibited Transfer then, upon written demand by the Corporation sent within thirty days of the
date on which the Board of Directors determines that the attempted Transfer would result in Excess
Securities, the Purported Transferee shall transfer or cause to be transferred any certificate or
other evidence of ownership of the Excess Securities within the Purported Transferee’s possession
or control, together with any Prohibited Distributions, to an agent designated by the Board of
Directors (the “Agent”). The Agent shall thereupon sell to a buyer or buyers, which may include the
Corporation, the Excess Securities transferred to it in one or more arm’s-length transactions (on
the public securities market on which such Excess Securities are traded, if possible, or otherwise
privately); provided, however, that any such sale must not constitute a Prohibited Transfer and
provided, further, that the Agent shall effect such sale or sales in an orderly fashion and shall
not be required to effect any such sale within any specific time frame if, in the Agent’s
discretion, such sale or sales would disrupt the market for the Corporation Securities or otherwise
would adversely affect the value of the Corporation Securities. If the Purported Transferee has
resold the Excess Securities before receiving the Corporation’s demand to surrender Excess
Securities to the Agent, the Purported Transferee shall be deemed to have sold the Excess
Securities for the Agent, and shall be required to transfer to the Agent any Prohibited
Distributions and proceeds of such sale, except to the extent that the Corporation grants written
permission to the Purported Transferee to retain a portion of such sales proceeds not exceeding the
amount that the Purported Transferee would have received from the Agent pursuant to Section 8.6 if
the Agent rather than the Purported Transferee had resold the Excess Securities.
Section 8.6 Application Of Proceeds And Prohibited Distributions
The Agent shall apply any proceeds of a sale by it of Excess Securities and, if the Purported
Transferee has previously resold the Excess Securities, any amounts received by it from a Purported
Transferee, together, in either case, with any Prohibited Distributions, as follows: (a) first,
such amounts shall be paid to the Agent to the extent necessary to cover its costs and expenses
incurred in connection with its duties hereunder; (b) second, any remaining amounts shall be paid
to the Purported Transferee, up to the amount paid by the Purported Transferee for the Excess
Securities (or the fair market value at the time of the Transfer, in the event the purported
Transfer of the Excess Securities was, in whole or in part, a gift, inheritance or similar
Transfer) which amount shall be determined at the discretion of the Board of Directors; and (c)
third, any remaining amounts shall be paid to one or more organizations qualifying under Section
501(c)(3) of the Code (or any comparable successor provision) selected by the Board of Directors.
The Purported Transferee of Excess Securities shall have no claim, cause of action or any other
recourse whatsoever against any transferor of Excess Securities. The Purported Transferee’s sole
right with respect to such shares shall be limited to the amount payable to the Purported
Transferee pursuant to this Section 8.6. In no event shall the proceeds of
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any sale of Excess Securities pursuant to this Section 8.6 of Article 8 inure to the benefit
of the Corporation or the Agent, except to the extent used to cover costs and expenses incurred by
the Agent in performing its duties hereunder.
Section 8.7 Modification Of Remedies For Certain Indirect Transfers
In the event of any Transfer which does not involve a transfer of securities of the
Corporation within the meaning of Michigan law (“Securities,” and individually, a “Security”) but
which would cause a 4.9-percent Shareholder to violate a restriction on Transfers provided for in
this Article 8, the application of Sections 8.5 and 8.6 shall be modified as described in this
Section 8.7. In such case, no such 4.9-percent Shareholder shall be required to dispose of any
interest that is not a Security, but such 4.9-percent Shareholder and/or any Person whose ownership
of Securities is attributed to such 4.9-percent Shareholder shall be deemed to have disposed of and
shall be required to dispose of sufficient Securities (which Securities shall be disposed of in the
inverse order in which they were acquired) to cause such 4.9-percent Shareholder, following such
disposition, not to be in violation of this Article 8. Such disposition shall be deemed to occur
simultaneously with the Transfer giving rise to the application of this provision, and such number
of Securities that are deemed to be disposed of shall be considered Excess Securities and shall be
disposed of through the Agent as provided in Sections 8.5 and 8.6, except that the maximum
aggregate amount payable either to such 4.9-percent Shareholder, or to such other Person that was
the direct holder of such Excess Securities, in connection with such sale shall be the fair market
value of such Excess Securities at the time of the purported Transfer. All expenses incurred by the
Agent in disposing of such Excess Securities shall be paid out of any amounts due such 4.9-percent
Shareholder or such other Person. The purpose of this Section 8.7 is to extend the restrictions in
Sections 8.2 and 8.5 to situations in which there is a 4.9-percent Transaction without a direct
Transfer of Securities, and this Section 8.7, along with the other provisions of this Article 8,
shall be interpreted to produce the same results, with differences as the context requires, as a
direct Transfer of Corporation Securities.
Section 8.8 Legal Proceedings; Prompt Enforcement
If the Purported Transferee fails to surrender the Excess Securities or the proceeds of a sale
thereof to the Agent within thirty days from the date on which the Corporation makes a written
demand pursuant to Section 8.5 (whether or not made within the time specified in Section 8.5), then
the Corporation shall promptly take all cost effective actions which it believes are appropriate to
enforce the provisions hereof, including the institution of legal proceedings to compel the
surrender. Nothing in this Section 8.8 shall (i) be deemed inconsistent with any Transfer of the
Excess Securities provided in this Article 8 being void ab initio, (ii) preclude the Corporation in
its discretion from immediately bringing legal proceedings without a prior demand or (iii) cause
any failure of the Corporation to act within the time periods set forth in Section 8.5 to
constitute a waiver or loss of any right of the Corporation under this Article 8. The Board of
Directors may authorize such additional actions as it deems advisable to give effect to the
provisions of this Article 8.
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Section 8.9 Liability
To the fullest extent permitted by law, any shareholder subject to the provisions of this
Article 8 who knowingly violates the provisions of this Article 8 and any Persons controlling,
controlled by or under common control with such shareholder shall be jointly and severally liable
to the Corporation for, and shall indemnify and hold the Corporation harmless against, any and all
damages suffered as a result of such violation, including but not limited to damages resulting from
a reduction in, or elimination of, the Corporation’s ability to utilize its Tax Benefits, and
attorneys’ and auditors’ fees incurred in connection with such violation.
Section 8.10 Obligation To Provide Information
As a condition to the registration of the Transfer of any Shares, any Person who is a
beneficial, legal or record holder of Shares, and any proposed Transferee and any Person
controlling, controlled by or under common control with the proposed Transferee, shall provide such
information as the Corporation may request from time to time in order to determine compliance with
this Article 8 or the status of the Tax Benefits of the Corporation.
Section 8.11 Legends
The Board of Directors may require that any certificates issued by the Corporation evidencing
ownership of Shares that are subject to the restrictions on transfer and ownership contained in
this Article 8 bear the following legend:
“THE BY-LAWS, AS AMENDED FROM TIME TO TIME (THE “BY-LAWS”), OF THE CORPORATION CONTAIN
RESTRICTIONS PROHIBITING THE TRANSFER (AS DEFINED IN THE BY-LAWS) OF COMMON SHARES OF THE
CORPORATION (INCLUDING THE CREATION OR GRANT OF CERTAIN OPTIONS, RIGHTS AND WARRANTS) WITHOUT THE
PRIOR AUTHORIZATION OF THE BOARD OF DIRECTORS OF THE CORPORATION (THE “BOARD OF DIRECTORS”) IF SUCH
TRANSFER AFFECTS THE PERCENTAGE OF STOCK OF THE CORPORATION (WITHIN THE MEANING OF SECTION 382 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) AND THE TREASURY REGULATIONS PROMULGATED
THEREUNDER), THAT IS TREATED AS OWNED BY A 4.9 PERCENT SHAREHOLDER UNDER THE CODE AND SUCH
REGULATIONS. IF THE TRANSFER RESTRICTIONS ARE VIOLATED, THEN THE TRANSFER WILL BE VOID AB INITIO
AND THE PURPORTED TRANSFEREE OF THE SHARES WILL BE REQUIRED TO TRANSFER EXCESS SECURITIES (AS
DEFINED IN THE BY-LAWS) TO THE CORPORATION’S AGENT. IN THE EVENT OF A TRANSFER WHICH DOES NOT
INVOLVE SECURITIES OF THE CORPORATION WITHIN THE MEANING OF THE BUSINESS CORPORATION ACT OF THE
STATE OF MICHIGAN (“SECURITIES”) BUT WHICH WOULD VIOLATE THE TRANSFER RESTRICTIONS, THE PURPORTED
TRANSFEREE (OR THE RECORD OWNER) OF THE SECURITIES WILL BE REQUIRED TO TRANSFER SUFFICIENT
SECURITIES PURSUANT TO THE TERMS PROVIDED FOR IN THE CORPORATION’S BY-LAWS TO CAUSE THE 4.9 PERCENT
SHAREHOLDER TO NO LONGER BE IN VIOLATION OF THE TRANSFER RESTRICTIONS. THE CORPORATION WILL FURNISH
WITHOUT CHARGE TO THE HOLDER OF RECORD OF THIS CERTIFICATE A COPY OF
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THE BY-LAWS, CONTAINING THE ABOVE-REFERENCED TRANSFER RESTRICTIONS, UPON WRITTEN REQUEST TO
THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS.”
The Board of Directors may also require that any certificates issued by the Corporation
evidencing ownership of Shares that are subject to conditions imposed by the Board of Directors
under Section 9.3 also bear a conspicuous legend referencing the applicable restrictions.
Section 8.12 Authority Of Board Of Directors
(1) The Board of Directors shall have the power to determine all matters necessary for
assessing compliance with this Article 8, including, without limitation, (i) the identification of
4.9-percent Shareholders, (ii) whether a Transfer is a 4.9-percent Transaction or a Prohibited
Transfer, (iii) the Percentage Share Ownership in the Corporation of any 4.9-percent Shareholder,
(iv) whether an instrument constitutes a Corporation Security, (v) the amount (or fair market
value) due to a Purported Transferee pursuant to Section 8.6, and (vi) any other matters which the
Board of Directors determines to be relevant; and the good faith determination of the Board of
Directors on such matters shall be conclusive and binding for all the purposes of this Article 8.
In addition, the Board of Directors may, to the extent permitted by law, from time to time
establish, modify, amend or rescind by-laws, regulations and procedures of the Corporation not
inconsistent with the provisions of this Article 9 for purposes of determining whether any Transfer
of Corporation Securities would jeopardize the Corporation’s ability to preserve and use the Tax
Benefits and for the orderly application, administration and implementation of this Article 8.
(2) Nothing contained in this Article 8 shall limit the authority of the Board of Directors to
take such other action to the extent permitted by law as it deems necessary or advisable to protect
the Corporation and its shareholders in preserving the Tax Benefits. Without limiting the
generality of the foregoing, in the event of a change in law making one or more of the following
actions necessary or desirable, the Board of Directors may, by adopting a written resolution, (i)
accelerate or extend the Expiration Date, (ii) modify the ownership interest percentage in the
Corporation or the Persons or groups covered by this Article 8, (iii) modify the definitions of any
terms set forth in this Article 8 or (iv) modify the terms of this Article 8 as appropriate, in
each case, in order to prevent an ownership change for purposes of Section 382 of the Code as a
result of any changes in applicable Treasury Regulations or otherwise; provided, however, that the
Board of Directors shall not cause there to be such acceleration, extension or modification unless
it determines, by adopting a written resolution, that such action is reasonably necessary or
advisable to preserve the Tax Benefits or that the continuation of these restrictions is no longer
reasonably necessary for the preservation of the Tax Benefits. Shareholders of the Corporation
shall be notified of such determination through a filing with the Securities and Exchange
Commission or such other method of notice as the Secretary of the Corporation shall deem
appropriate.
(3) In the case of an ambiguity in the application of any of the provisions of this Article 8,
including any definition used herein, the Board of Directors shall have the power to determine the
application of such provisions with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances. In the event this Article 8 requires an
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action by the Board of Directors but fails to provide specific guidance with respect to such
action, the Board of Directors shall have the power to determine the action to be taken so long as
such action is not contrary to the provisions of this Article 8. All such actions, calculations,
interpretations and determinations which are done or made by the Board of Directors in good faith
shall be conclusive and binding on the Corporation, the Agent, and all other parties for all other
purposes of this Article 8. The Board of Directors may delegate all or any portion of its duties
and powers under this Article 8 to a committee of the Board of Directors as it deems necessary or
advisable and, to the fullest extent permitted by law, may exercise the authority granted by this
Article 8 through duly authorized officers or agents of the Corporation. Nothing in this Article 8
shall be construed to limit or restrict the Board of Directors in the exercise of its fiduciary
duties under applicable law.
Section 8.13 Reliance
To the fullest extent permitted by law, the Corporation and the members of the Board of
Directors shall be fully protected in relying in good faith upon the information, opinions, reports
or statements of the chief executive officer, the chief financial officer, the chief accounting
officer or the corporate controller of the Corporation and the Corporation’s legal counsel,
independent auditors, transfer agent, investment bankers or other employees and agents in making
the determinations and findings contemplated by this Article 8. The members of the Board of
Directors shall not be responsible for any good faith errors made in connection therewith. For
purposes of determining the existence and identity of, and the amount of any Corporation Securities
owned by any shareholder, the Corporation is entitled to rely on the existence and absence of
filings of Schedule 13D or 13G under the 1934 Act (or similar filings), as of any date, subject to
its actual knowledge of the ownership of Corporation Securities.
Section 8.14 Benefits Of This Article 8
Nothing in this Article 8 shall be construed to give to any Person other than the Corporation
or the Agent any legal or equitable right, remedy or claim under this Article 8. This Article 8
shall be for the sole and exclusive benefit of the Corporation and the Agent.
Section 8.15 Severability
The purpose of this Article 8 is to facilitate the Corporation’s ability to maintain or
preserve its Tax Benefits. If any provision of this Article 8 or the application of any such
provision to any Person or under any circumstance shall be held invalid, illegal or unenforceable
in any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision of this Article 8.
Section 8.16 Waiver
With regard to any power, remedy or right provided herein or otherwise available to the
Corporation or the Agent under this Article 9, (a) no waiver will be effective unless expressly
contained in a writing signed by the waiving party; and (b) no alteration, modification or
impairment will be implied by reason of any previous waiver, extension of time, delay or omission
in exercise, or other indulgence.
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ARTICLE 9
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors from time to time,
subject to applicable law.
ARTICLE 10
CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be approved from time to time by
the Board of Directors.
ARTICLE 11
RELIANCE UPON BOOKS, REPORTS AND RECORDS
Each director, each member of any committee designated by the Board of Directors, and each
officer of the Corporation shall, in the performance of his or her duties, be fully protected in
relying in good faith upon the books of account or other records of the Corporation and upon such
information, opinions, reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any other person as to
matters which such director or committee member reasonably believes are within such other person’s
professional or expert competence and who has been selected with reasonable care by or on behalf of
the Corporation.
ARTICLE 12
AMENDMENTS
These Bylaws, except as provided by applicable law or the Articles of Incorporation, or as
otherwise set forth in these Bylaws, may be amended or repealed at any regular or special meeting
of the entire Board; provided, however, that (a) a notice specifying the change or amendment shall
have been given at a previous regular meeting and entered in the minutes of the Board; (b) a
written statement describing the change or amendment shall be made in the notice delivered to the
directors of the meeting at which the change or amendment shall be acted upon; and (c) any Bylaw
made by the Board may be altered, amended, rescinded or repealed by the holders of shares of
capital stock presenting a majority of the securities entitled to vote thereon at any annual
meeting or at any special meeting called for that purpose in accordance with the percentage
requirements set forth in the Articles of Incorporation and/or these Bylaws. Notwithstanding the
foregoing, any provision of these Bylaws that contains a supermajority voting requirement shall
only be altered, amended, rescinded or repealed by a vote of the Board or holders of capital stock
entitled to vote thereon that is not less than the supermajority specified in such provision.
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ARTICLES OF MERGER
FREMONT REORGANIZING CORPORATION
ARTICLES OF MERGER
These Articles of Merger are submitted for filing to the Secretary of State of the State of
Nevada pursuant to Nevada Revised Statutes Section 92A.200.
Article I
Plan of Merger
Pursuant to the provisions of Section 92A of the Nevada Revised Statutes (“NRS”) and Section
1110 of the California Corporations Code, Fremont General Corporation, a Nevada corporation
(“MergerCo”), 175 N. Riverview Drive, Anaheim Hills, CA 92808, and Fremont Reorganizing
Corporation, a California corporation (“FRC”), 175 N. Riverview Drive, Anaheim Hills, CA 92808,
entered into a Plan of Merger by the terms of which MergerCo became the surviving corporation in
said merger.
Article II
Approval of Plan of Merger
The Plan of Merger has been presented to the stockholders and directors of the constituent
corporations in the manner and to the extent required by law and the corporations’ articles of
incorporation and bylaws and has been approved as follows:
The directors of MergerCo are deemed to have approved and adopted the Plan of Merger pursuant
to NRS 78.622, Section 1400 of the California Corporations Code, and Section 7 of the confirmed
Chapter 11 reorganization plan of MergerCo attached hereto as Exhibit A.
The common stockholders of MergerCo are deemed to have approved and adopted the Plan of
Merger pursuant to NRS 78.622, Section 1400 of the California Corporations Code and Section 7 of
the confirmed Chapter 11 reorganization plan of MergerCo attached hereto as Exhibit A.
The directors of FRC approved and adopted the Plan of Merger by unanimous written consent
dated [ ].
MergerCo, the sole common stockholder of FRC, is deemed to have approved and adopted the Plan
of Merger pursuant to NRS 78.622, Section 1400 of the California Corporations Code, and Section 7
of the confirmed Chapter 11 reorganization plan of MergerCo attached hereto as Exhibit A.
Article III
Terms of Plan of Merger
The merger provided for herein shall become effective at the close of business on the date it
is filed with the Secretary of State of the State of Nevada and the Secretary of State of the
State of California.
The terms of the Plan of Merger provided that all of the stock of FRC will be cancelled and
that all intercompany claims and obligations of MergerCo and FRC shall be eliminated.
The Plan of Merger is on file at the registered office of MergerCo.
Article IV
Surviving Corporation
The address of the surviving corporation shall be:
Fremont General Corporation 175
N. Riverview Drive, Anaheim
Hills, CA 92808
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IN WITNESS HEREOF, these Articles of Merger have been signed this [ ] day of March, 2010.
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FREMONT
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PLAN OF MERGER
THIS PLAN OF MERGER, dated as of March [ ], 2010, (the “Plan”) is made and entered into by
and among FREMONT GENERAL CORPORATION, a Nevada corporation (“MergerCo”), 175 N. Riverview Drive,
Anaheim Hills, CA 92808 and FREMONT REORGANIZING CORPORATION, a California corporation (“FRC”), 175
N. Riverview Drive, Anaheim Hills, CA 92808. MergerCo is sometimes referred to as the “Surviving
Corporation.” MergerCo and FRC are sometimes hereinafter collectively referred to as the
“Constituent Corporations.” IN CONSIDERATION of the mutual covenants and agreements herein
contained and for the purpose of setting forth the terms and conditions of said merger and such
other provisions as are deemed necessary or desirable, the parties hereto have agreed and do
hereby agree as follows:
ARTICLE I
MERGER AND NAME OF SURVIVING CORPORATION
On the effective date of the merger, FRC and MergerCo shall cease to exist separately and FRC
shall be merged with and into MergerCo, which is hereby designated as the Surviving Corporation,
the name of which on and after the effective date of the merger shall remain “Fremont General
Corporation”.
ARTICLE II
TERMS AND CONDITIONS OF MERGER
The terms and conditions of the merger are (in addition to those set forth elsewhere in this
Plan) as follows:
(a) On the effective date of the merger:
(1) FRC shall be merged into MergerCo to form a single corporation, and MergerCo shall be and
is designated herein as the Surviving Corporation.
(2) The separate existence of FRC shall cease.
(3) The Surviving Corporation shall have all the rights, privileges, immunities and powers,
and shall be subject to all duties and liabilities of a corporation organized under the laws of
the state of Nevada.
(4) The Surviving Corporation shall thereupon and thereafter possess all the rights,
privileges, immunities and franchises of a public, as well as of a private, nature of FRC, and all
property, real, personal and mixed, and all debts due of whatever account, including subscriptions
to shares and all other choses in action, and all and every other interest of or belonging to or
due to FRC shall be taken and deemed to be transferred to and vested in the Surviving Corporation
without further act or deed. The title to any real estate or any interest herein vested in FRC
shall not revert or be in any way impaired by reason of the merger. The Surviving Corporation shall
thenceforth be responsible and liable for all the liabilities and obligations of FRC. Any claim
existing or action or proceeding pending by or against FRC may be prosecuted as if the merger had
not taken place, or the Surviving Corporation may be substituted in place of FRC. Neither the
rights of creditors nor any liens on the property of FRC
shall be impaired by the merger. Notwithstanding the foregoing, all intercompany claims and
obligations of MergerCo and FRC shall be eliminated upon the effective date of the merger.
(b) On the effective date of the merger, the board of directors of the Surviving Corporation
and the members thereof shall be and consist of the members of the board of directors of MergerCo
as of [ ], to serve thereafter in accordance with the bylaws of the Surviving Corporation and
until their respective successors shall have been duly elected and qualified in accordance with
such bylaws and the laws of the state of Nevada.
(c) On the effective date of the merger, the officers of the Surviving Corporation shall be
and consist of the officers of MergerCo as of [ ], such officers to serve thereafter in accordance
with the bylaws of the Surviving Corporation and until their respective successors shall have been
duly elected and qualified in accordance with such bylaws and the laws of the state of Nevada. If,
on the effective date of the merger, a vacancy shall exist in the board of directors or in any of
the offices of the Surviving Corporation, such vacancy may be filled in the manner provided in the
bylaws of the Surviving Corporation and the laws of the state of Nevada.
ARTICLE III
MANNER AND BASIS OF CONVERTING SHARES OF STOCK
The shares of FRC shall be surrendered to and cancelled by the Surviving Corporation upon the
effective date of the merger. The shares of MergerCo common stock issued and outstanding shall
remain issued and outstanding as shares of common stock of the Surviving Corporation.
ARTICLE IV
ARTICLES OF INCORPORATION AND BYLAWS
(a) The articles of incorporation of MergerCo, shall, on the merger becoming effective,
constitute the articles of incorporation of the Surviving Corporation, unless and until amended in
the manner provided by law.
(b) The bylaws of MergerCo shall, on the merger becoming effective, be and constitute the
bylaws of the Surviving Corporation until amended in the manner provided by law.
ARTICLE V
OTHER PROVISIONS WITH RESPECT TO MERGER
This Plan shall be submitted to the board of directors and shareholders of FRC and to the
board of directors of MergerCo to the extent required by the laws of the states of Nevada and
California, as applicable. After the approval or adoption of this Plan in accordance with the
requirements of the laws of the states of Nevada and California, as applicable, all required
documents shall be executed, acknowledged, certified, filed and recorded in accordance with all
requirements of the states of Nevada and California, as applicable.
- 2 -
ARTICLE VI
APPROVAL AND EFFECTIVE DATE OF THE MERGER;
MISCELLANEOUS MATTERS
(a) In order to aid the parties in establishing a date certain for effectiveness of the merger
for accounting and other purposes, the merger shall be deemed to have become effective on filing of
articles of merger, setting forth the information required by and executed and certified in
accordance with the laws of the states of Nevada and California with the Secretary of State of the
State of Nevada and with the Secretary of State of the State of California, and each such office
shall have issued a certified copy reflecting such filing.
(b) If, at any time, the Surviving Corporation shall deem or be advised that any further
grants, assignments, confirmations or assurances are necessary or desirable to vest, perfect or
confirm title in the Surviving Corporation, of record or otherwise, to any property of FRC acquired
or to be acquired by, or as a result of, the merger, the officers and directors of FRC or any of
them shall be severally and fully authorized to execute and deliver any and all such deeds,
assignments, confirmations and assurances and to do all things necessary or proper, so as to best
prove, confirm and ratify title to such property in the Surviving Corporation and otherwise carry
out the purposes of the merger and the terms of this Plan.
(c) For the convenience of the parties and to facilitate the filing and recording of this
Plan, any number of counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument and all such counterparts together shall be considered one
instrument.
(d) This Plan cannot be altered or amended except pursuant to an instrument in writing signed
on behalf of the parties hereto.
- 3 -
IN WITNESS WHEREOF, each Constituent Corporation has caused this Plan to be executed, all as
of the date first above written.
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FREMONT GENERAL CORPORATION |
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FREMONT
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REORGANIZING CORPORATION |
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ARTICLES OF MERGER
FREMONT GENERAL CREDIT CORPORATION
ARTICLES OF MERGER
These Articles of Merger are submitted for filing to the Secretary of State of the State of
Nevada pursuant to Nevada Revised Statutes Section 92A.200.
Article I
Plan of Merger
Pursuant to the provisions of Section 92A of the Nevada Revised Statutes (“NRS”) and Section
1110 of the California Corporations Code, Fremont General Corporation, a Nevada corporation
(“MergerCo”), 175 N. Riverview Drive, Anaheim Hills, CA 92808, and Fremont General Credit
Corporation, a California corporation (“FGCC), 2727 East Imperial Highway, Brea, CA 92821, entered
into a Plan of Merger by the terms of which Merger Co became the surviving corporation in said
merger.
Article II
Approval of Plan of Merger
The Plan of Merger has been presented to the stockholders and directors of the constituent
corporations in the manner and to the extent required by law and the corporations’ articles of
incorporation and bylaws and has been approved as follows:
The directors of MergerCo are deemed to have approved and adopted the Plan of Merger pursuant
to NRS 78.622, Section 1400 of the California Corporations Code, and Section 7 of the confirmed
Chapter 11 reorganization plan of MergerCo attached hereto as Exhibit A.
The common stockholders of MergerCo are deemed to have approved and adopted the Plan of
Merger pursuant to NRS 78.622, Section 1400 of the California Corporations Code, and Section 7 of
the confirmed Chapter 11 reorganization plan of MergerCo attached hereto as Exhibit A.
The directors of FGCC approved and adopted the Plan of Merger by unanimous written consent
dated [ ].
MergerCo, the sole common stockholder of FGCC, is deemed to have approved and adopted the
Plan of Merger pursuant to NRS 78.622, Section 1400 of the California Corporations Code, and
Section 7 of the confirmed Chapter 11 reorganization plan of MergerCo attached hereto as Exhibit
A.
Article III
Terms of Plan of Merger
The merger provided for herein shall become effective at the close of business on the date it
is filed with the Secretary of State of the State of Nevada and the Secretary of State of the State
of California.
The terms of the Plan of Merger provided that all of the stock of FGCC will be cancelled and
that all intercompany claims and obligations of MergerCo and FGCC shall be eliminated.
The Plan of Merger is on file at the registered office of MergerCo.
Article IV
Surviving Corporation
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The address of the surviving corporation shall be: |
Fremont General Corporation
175 N. Riverview Drive,
Anaheim Hills, CA 92808
- 2 -
IN WITNESS HEREOF, these Articles of Merger have been signed this [ ] day of March, 2010.
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FREMONT GENERAL CORPORATION |
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FREMONT GENERAL CREDIT CORPORATION |
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By: |
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PLAN OF MERGER
THIS PLAN OF MERGER, dated as of March [ ]} 2010, (the “Plan”) is made and entered
into by and among FREMONT GENERAL CORPORATION, a Nevada corporation (“MergerCo”), 175 N. Riverview
Drive, Anaheim Hills, CA 92808 and FREMONT GENERAL CREDIT CORPORATION, a California corporation
(“FGCC), 2727 East Imperial Highway, Brea, CA 92821. MergerCo is sometimes referred to as the
“Surviving Corporation.” MergerCo and FGCC are sometimes hereinafter collectively referred to as
the “Constituent Corporations.” IN CONSIDERATION of the mutual covenants and agreements herein
contained and for the purpose of setting forth the terms and conditions of said merger and such
other provisions as are deemed necessary or desirable, the parties hereto have agreed and do
hereby agree as follows:
ARTICLE I
MERGER AND NAME OF SURVIVING CORPORATION
On the effective date of the merger, FGCC and MergerCo shall cease to exist separately and
FGCC shall be merged with and into MergerCo, which is hereby designated as the Surviving
Corporation, the name of which on and after the effective date of the merger shall remain “Fremont
General Corporation”.
ARTICLE II
TERMS AND CONDITIONS OF MERGER
The terms and conditions of the merger are (in addition to those set forth elsewhere in this
Plan) as follows:
(a) On the effective date of the merger:
(1) FGCC shall be merged into MergerCo to form a single corporation, and MergerCo shall be
and is designated herein as the Surviving Corporation.
(2) The separate existence of FGCC shall cease.
(3) The Surviving Corporation shall have all the rights, privileges, immunities and powers,
and shall be subject to all duties and liabilities of a corporation organized under the laws of
the state of Nevada,
(4) The Surviving Corporation shall thereupon and thereafter possess all the rights,
privileges, immunities and franchises of a public, as well as of a private, nature of FGCC, and all
property, real, personal and mixed, and all debts due of whatever account, including subscriptions
to shares and all other choses in action, and all and every other interest of or belonging to or
due to FGCC shall be taken and deemed to be transferred to and vested in the Surviving Corporation
without further act or deed. The title to any real estate or any interest herein vested in FGCC
shall not revert or be in any way impaired by reason of the merger. The Surviving Corporation shall
thenceforth be responsible and liable for all the liabilities and obligations of FGCC. Any claim
existing or action or proceeding pending by or against FGCC may be prosecuted as if the merger had
not taken place, or the Surviving Corporation may be substituted in place of FGCC. Neither the
rights of creditors nor any liens on the property of FGCC shall be impaired by the merger.
Notwithstanding the foregoing, all intercompany claims
and obligations of MergerCo and FGCC shall be eliminated upon the effective date of the merger.
(b) On the effective date of the merger, the board of directors of the Surviving Corporation
and the members thereof shall be and consist of the members of the board of directors of MergerCo
as of [ ], to serve thereafter in accordance with the bylaws of the Surviving Corporation and
until their respective successors shall have been duly elected and qualified in accordance with
such bylaws and the laws of the state of Nevada.
(c) On the effective date of the merger, the officers of the Surviving Corporation shall be
and consist of the officers of MergerCo as of [ ], such officers to serve thereafter in accordance
with the bylaws of the Surviving Corporation and until their respective successors shall have been
duly elected and qualified in accordance with such bylaws and the laws of the state of Nevada. If,
on the effective date of the merger, a vacancy shall exist in the board of directors or in any of
the offices of the Surviving Corporation, such vacancy may be filled in the manner provided in the
bylaws of the Surviving Corporation and the laws of the state of Nevada.
ARTICLE III
MANNER AND BASIS OF CONVERTING SHARES OF STOCK
The shares of FGCC shall be surrendered to and cancelled by the Surviving Corporation upon
the effective date of the merger. The shares of MergerCo common stock issued and outstanding shall
remain issued and outstanding as shares of common stock of the Surviving Corporation.
ARTICLE IV
ARTICLES OF INCORPORATION AND BYLAWS
(a) The articles of incorporation of MergerCo, shall, on the merger becoming effective,
constitute the articles of incorporation of the Surviving Corporation, unless and until amended in
the manner provided by law.
(b) The bylaws of MergerCo shall, on the merger becoming effective, be and constitute the
bylaws of the Surviving Corporation until amended in the manner provided by law.
ARTICLE V
OTHER PROVISIONS WITH RESPECT TO MERGER
This Plan shall be submitted to the board of directors and shareholders of FGCC and to the
board of directors of MergerCo to the extent required by the laws of the states of Nevada and
California, as applicable. After the approval or adoption of this Plan in accordance with the
requirements of the laws of the states of Nevada and California, as applicable, all required
documents shall be executed, acknowledged, certified, filed and recorded in accordance with all
requirements of the states of Nevada and California, as applicable.
- 2 -
ARTICLE VI
APPROVAL AND EFFECTIVE DATE OF THE MERGER;
MISCELLANEOUS MATTERS
(a) In order to aid the parties in establishing a date certain for effectiveness of the merger
for accounting and other purposes, the merger shall be deemed to have become effective on filing of
articles of merger, setting forth the information required by and executed and certified in
accordance with the laws of the states of Nevada and California with the Secretary of State of the
State of Nevada and with the Secretary of State of the State of California, and each such office
shall have issued a certified copy reflecting such filing.
(b) If, at any time, the Surviving Corporation shall deem or be advised that any further
grants, assignments, confirmations or assurances are necessary or desirable to vest, perfect or
confirm title in the Surviving Corporation, of record or otherwise, to any property of FGCC
acquired or to be acquired by, or as a result of, the merger, the officers and directors of FGCC or
any of them shall be severally and fully authorized to execute and deliver any and all such deeds,
assignments, confirmations and assurances and to do all things necessary or proper, so as to best
prove, confirm and ratify title to such property in the Surviving Corporation and otherwise carry
out the purposes of the merger and the terms of this Plan.
(c) For the convenience of the parties and to facilitate the filing and recording of this
Plan, any number of counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument and all such counterparts together shall be considered one
instrument.
(d) This Plan cannot be altered or amended except pursuant to an instrument in writing signed
on behalf of the parties hereto.
- 3 -
IN WITNESS WHEREOF, each Constituent Corporation has caused this Plan to be executed, all as
of the date first above written.
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FREMONT GENERAL CORPORATION |
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FREMONT GENERAL CREDIT CORPORATION |
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In re:
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CHAPTER. 11 |
Fremont General Corporation Debtor(s). |
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Debtor(s).
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CASE NUMBER: 8:08-bk-13421-ES |
NOTE: When using this form to indicate service of a proposed order, DO NOT list any person or
entity in Category I. Proposed orders do not generate an NEF because only orders that have been
entered are placed on a CM/ECF docket.
PROOF OF SERVICE OF DOCUMENT
I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My
business address is:
611 Anton Blvd., Suite 1400, Costa Mesa, CA 92626
A true and correct copy of the foregoing
document described as SIGNATIRE HOLDINGS, LLC’S CHAPTER 11 FOURTH AMENDED PLAN OF REORGANIZATION
will be served or was served (a) on the judge in chambers in the form and manner required by LBR
5005-2(d), and (b) in the manner indicated below:
I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (“NEF”) — Pursuant to controlling
General Order(s) and Local Bankruptcy Rule(s) (“LBR”), the foregoing document will be served by the
court via NEF and hyperlink to the document. On May 24, 2010 I checked the CM/ECF docket for this
bankruptcy case or adversary proceeding and determined that the following person(s) are on the
Electronic Mail Notice List to receive NEF transmission at the email addressed indicated below:
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Kyra E Andrassy kandrassy@wgllp.com |
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Kristen N Beall kbeall@pattonboggs.com, bmcilwain@pattonboggs.com |
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Reem J Bello rbello@wgllp.com |
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Ron Bender rb@lnbrb.com |
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Dustin P Branch dustin.branch@kattenlaw.com |
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Brendt C Butler BButler@rutan.com |
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Frank Cadigan frank.cadigan@usdoj.gov |
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Gary O Caris gcaris@mckennalong.com, pcoates@mckennalong.com |
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Lisa W Chao lisa.chao@doj.ca.gov |
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Eric A Cook ecook@ebglaw.com |
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Kristopher Davis ksdavis@ebglaw.com |
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Ted A Dillman Ted.dillman@lw.com |
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Willis B Douglass
Willis.B.Douglass@irscounsel.treas.gov |
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Jesse S Finlayson jfinlayson@faw-law.com, wmills@faw-law.com |
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Philip A Gasteier pag@lnbrb.com |
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Peter J Gurfein pgurfein@akingump.com |
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Matthew Heyn mheyn@ktbslaw.com |
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Whitman L Holt wholt@stutman.com |
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Mark D Houle mark.houle@pillsburylaw.com |
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Michelle Hribar mhribar@rutan.com |
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Sean A Kading skading@marshackhays.com |
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Derek J Kaufman derek.kaufman@mto.com |
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William H. Kiekhofer wkiekhofer@mcguirewoods.com |
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Lewis R Landau lew@landaunet.com |
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Thomas A. Lee 2 notices@becket-lee.com |
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Kerri A Lyman klyman@irell.com |
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Richard A Marshack rmarshack@marshackhays.com, lbergini@marshackhays.com |
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Robert S Marticello Rmarticello@wgllp.com * |
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Neeta Menon nmenon@stutman.com |
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Sarah D Moyed moyeds@sec.gov |
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Mike D Neue mneue@thelobelfirm.com, csolorzano@thelobelfirm.com |
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Aram Ordubegian ordubegian.aram@arentfox.com |
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David L Osias bcrfilings@allenmatkins.com, dosias@allenmatkins.com |
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This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
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January 2009
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American LegalNet, Inc.
www.FormsWorkflow.com |
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Jonathan Petrus Jpetrus @Ictbslaw.com |
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David M Poitras dpoitras@jmbm.com |
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Christopher E Prince cprince@lesnickprince.com |
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Michael B
Reynolds mreynolds@swlaw.com,
kcoliins@swlaw.com |
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Neal Salisian nsalisian@morganiewis.com |
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John P Schafer jps@mandersonilp.com |
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Jonathon Shenson jshenson@ktbslaw.com |
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Evan D Smiley esmiley@wgllp.com |
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Philip E Strok pstrok@wgllp.com |
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Samuel J Teele steele@lowenstein.com |
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United States Trustee
(SA) ustpregion16.sa.ecf@usdoj.gov |
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Thomas J Welsh tomwelsh@orrick.com |
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Brian D Wesley brian.wesley@doj.ca.gov |
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Alan Z Yudkowsky ayudkowsky@stroock.com |
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o Service information continued on attached page
II. SERVED BY U.S. MAIL OR OVERNIGHT MAIL (indicate method for each person or entity served):
On May 24, 2010 I served the following person(s) and/or entity(ies) at the last known address(es)
in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed
envelope in the United States Mail, first class, postage prepaid, and/or with an overnight mail
service addressed as follow. Listing the judge here constitutes a declaration that mailing to the
judge will be completed no later than 24 hours after the document is filed.
þ Service information continued on attached page
III. SERVED BY PERSONAL DELIVERY. FACSIMILE TRANSMISSION OR EMAIL (indicate method for each person
or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on May 25, 2010 I served the
following person(s) and/or entity(ies) by personal delivery, or (for those who consented in writing to such service
method) by facsimile transmission
and/or email as follows. Listing the judge here constitutes a declaration that mailing to the judge
will be completed no later
than 24 hours after the document is filed *** I caused our attorney service to deliver.
Hon. Erithe A. Smith, U.S. Bankruptcy Ct.
411 W. Fourth Street, Santa Ana, CA 92701
(Bin Outside or Room 5097)
o Service information continued on attached page
I declare under penalty of perjury under the laws of the United States of America that the
foregoing is true and correct.
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May 24, 2010
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Amie Tancas
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/s/ Amie Tancas |
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Signature |
This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
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January 2009
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American LegalNet, Inc.
www.FormsWorkflow.com |
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In re:
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CHAPTER. 11 |
Fremont General Cooperation Debtor(s).
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Debtor(s).
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CASE NUMBER: 08-13421-ES |
ADDITIONAL SERVICE INFORMATION (if needed):
AMERICA’S SERVICING COMPANY
c/o McCalla Raymer LLC
1544 Old Alabama Rd
Roswell, GA 30076
James Bielan
1128 Cherry Hill Ln
Webster, NY 14580
Bocarsly Emden Cowan Esmail & Arndt LLP
633 West Fifth Street, 70th Floor
Los Angeles, CA 90071
Gregg Brugger
Walters McCluskey & Boehle
200 N Sepulveda Boulevard, Suite 300
El Segundo, CA 90245
Peter J Callaghan
8837 N Congress Ave Apt 717
Kansas City, MO 64153
Young Sook Chun
3525 Sawtelle Blvd #209
Los Angeles, CA 90066
Florence W Cook
Linda Deacon
Bate Peterson Deacon Zinn & Young LLP
888 S. Figueroa Street, 15th Fl
Los Angeles, CA 90017
Damian Donder
12 Ferry Crossing Dr SE
Rome, GA 30161
Charles E Elder
Irell & Manella LLP
1800 Ave of the Stars Ste 900
Los Angeles, CA 90067-4276
Federal Insurance Company
Eugene R Fiset
18162 Buena Vista
Yorba Linda, CA 92886-4011
Jack A Banan
15000 Emory Ln
Rockville, MD 20853
Don Bigelo
2635 E Serrano Ave
Orange, CA 92866
Michael D Braun
Braun Law Group, PC
10680 W. Pico Blvd., Suite 280
Los Angeles, CA 90064-7202
Larry J Caldwell
Caldwell Law Firm
1380 Lead Hill Ste 106
Roseville, CA 95661
George T Caplan
Epstein Becker & Green, PC
1925 Century Park E Ste 500
Los Angeles, CA 90067
Larry Cole
152 Piper Ln
Sonoma, CA 95476
Eugene Cowan
Bocarsly Emden Cowan Esmail & Arndt LLP
633 W Fifth Street, 70th Floor
Los Angeles, CA 90071
Deutsche Bank National Trust Co., as Trustee
Morgan, Lewis & Bockius LLP
One Market, Spear Street Tower
San Francisco, CA 94105-1126
William C. Dresser
4 N Second Street, Suite 1230
San Jose, CA 95113-1307
Evelyn Gofberg
Alex Feldman
1700 E 15th Apt #B4
Brooklyn, NY 11229
Randy Fox
14515 S Mullen
Olathe, KS 66062
This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
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January 2009 |
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American LegalNet, Inc.
www.FormsWorkflow.com |
Glenn S Gardipee
3111 Liberty Bell Rd
Green Bay, Wl 54313
Evelyn Gofberg
100 Alnwick
Malvern, NY 11565
Leonard Gumport
550 S Hope Street, #825
Los Angeles, CA 90071-2627
Katherine E Hay
200 N Sepulveda Blvd #300
El Segundo, CA 90245
James P Houpt
Orrick Herrington & Sutcliffe LLP
400 Capital Mall Ste 3000
Sacramento, CA 95814-4497
David V. Ing
3108 Kaohinani Drive
Honolulu, HI 96817-1039
Vivek lyengar
627 E 6th St
Hinsdale, IL 60521
Robert W Jones
Patton Boggs LLP
2001 Ross Ave Ste 3000
Dallas, TX 75201-8001
Fritz Keller
3003 Memorial Ct Apt 1113
Houston, TX 77007
Melinda Kolpin
17747 Camino de Yatsto
Pacific Palisades, CA 90272
KPMG Corporate Finance LLC
Plaza Tower Ste 700
600 Anton Blvd
Costa Mesa, CA 92626-7651
Michael C Lieb
Willenken Wilson Loh & Lieb, LLP
707 Wilshire Blvd Ste 3850
Los Angeles, CA 90017
Terry L Mason
PO Box 14
Shasta Lake, CA 96019
George Miranda
12012 Arndt rd
Aurora, OR 97002
Norah D. Molnar
Patton Boggs LLP
2550 M Street NW
Washington, DC 20037-1350
Eric J. Glassman
Mennemeier Glassman & Stroud LLP
980 9th St Ste 1700
Sacramento, CA 95814
Ronald Groden
John Haack
2500 Village Ln
Foristell, MO
Jean M. Healey
Office of the Attorney General
One Ashburton Place, 18th Floor
Boston, MA 02108
William M ladarola
6B Liberty Ste 245
Aliso Viejo, CA 92656
Iron Mountain Information Management, Inc.
c/o Frank F McGinn
155 Federal St, 9th Fl
Boston, MA 02110
Zeb Jenkins
74 Mapleview Rd
Cheektowaga, NY 14225
Raymond B. Jue
300 S. Spring St. #500
Los Angeles, CA 90013
Shmuel Klein
268 Route 59 West
Spring Valley, NY 10977
William J Kostka
Kurtzman Carson Consultants LLC
Attn: James Le
2335 Alaska Avenue
El Segundo, CA 90245
Anthony Lombardo
2014 Julius Ct
Walnut Creek, CA 94598
Colin Milner
4392 Forest Hill Rd
Stow, OH 44224
John M Mlynick
23 Mechanic St
Shelburne Falls, MA 01370
Andrey (Andre) Mutchnik
17, de la Poudriere #105
Montreal, Quebec, Canada, H4G 3J5
This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
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Simon T Ndongo
PO Box 66332
Mobile, AL 36660
Ronald J Nicolas
George B Piggott
2 Park Plaza, Ste 300
Irvine, CA 92614-0500
Jae Park
6152 Stanton Ave Apt B212
Buena Park, CA 90621
Dong Dang Pham
701 NE 20th St
Moore, OK 73160
Jonathan
D. Plaut
Chardon Law Offices
One State Street, Suite 1200
Boston, MA 02109
Raymond C Prospero
3638 University Ave Ste 249
Riverside, CA 92501
Centrell Reed
11698 Capitan Lane
Frisco, TX 75034
John Schultheis
Greg Seidel
10297 N Sinclair Cir
Fresno, CA 93730
Feras Shammami
Greg Skypala
10200 Ashton Rd
Amarillo, TX 79119
Mark R Somerstein
Ropes & Gray LLP
1211 Avenue of the Americans
New York, NY 10036-8704
John M Stephan
Office of the Atty General
One Ashburton PI 18th fl
Boston, MA 02108
Rosemarie Toon
9204 Wildwood St
Lorton, VA 22079
Robert Valade
HC 74 Box 21B
Pecos, NM 87552
Tarun Oberoi
90 Millers Lane
Ringwood, NJ 07456
Ramesh Pathak
31 Blaisdell Wy
Fremont, CA 94536
Daniel Pierro
1160 Manchester Way NE
Atlanta, GA 30319
Erik M Pritchard
Troutman Sanders LLP
5 Park Plaza Ste 1200
Irvine, CA 92614-8592
Donald J. Putterman
Kasowitz Benson Torres & Friedman LLP
101 California Street, Suite 2050
San Francisco, CA 94111
Stephanie M. Saito
Bate Peterson Deacon Zinn & Young LLP
888 S Figueroa Street, 15th Floor
Los Angeles, CA 90017
Milan Shah
8273 E Blackwillow
Anaheim, CA 92808
Surendra P Sinha
7734 Tailspin Ln
Scottsdale, AZ 85255
Solon Group, Inc.
350 E 57th Street, Suite 1A
New York, NY 10022
Squar Milner Peterson Miranda & Williamson LLP
William Kirt Toombs
PO Box 173
Ontario, OR 97914
Juan A Torres
Musick, Peeler & Garrett LLP
One Wilshire Blvd., Suite 2000
Los Angeles, CA 90017-3383
Thomas J Welch
Orrick, Herrington & Sutchliffe LLP
400 Capital Mall, Ste 3000
Sacramento, 95814-4497
This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
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January 2009
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Wells Fargo Bank, N.A.
Thomas J Welsh
Orrick, Herrington & Sutcliffe LLP
400 Capitol Mall Ste 3000
Sacramento, CA 95814-4497
Ronald Wilborn
P.O. Boc 170259
Atlanta, GA 30317
Paul A. Witter
c/o Pamela A. Ashby, Esq
Baylor & Jackson
1025 Connecticut Avenue NW
Suite 1202
Washington, DC 20036
Tom Yoon
3525 Sawtelle Blvd #209
Los Angeles, CA 90066
Wells Fargo Delaware Trust Company
Thomas C Whitesell
c/o Moses Lebovits
1801 Century Park E 9th Fl
Los Angeles, CA 90067
Diane Winchester
18018 N. 93rd Place
Scottsdale, AZ 85255
Bryan Wong
Beck & Jenkins
6830 Palm Avenue
Riverside, CA 92506
This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
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January 2009
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American LegalNet, Inc. |
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