Exhibit 4(a)
Execution Copy
X. X. XXXXXX COMPANY, INC.
AND
THE BANK OF NEW YORK
Trustee
_____________________
5% Convertible Subordinated Notes Due
October 15, 2008
INDENTURE
Dated as of October 15, 2001
_____________________
TABLE OF CONTENTS
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Page
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. Definitions .............................................................. 1
SECTION 1.02. Compliance Certificates and Opinions ..................................... 11
SECTION 1.03. Form of Documents Delivered to Trustee ................................... 11
SECTION 1.04. Acts of Securityholders .................................................. 12
SECTION 1.05. Notices, etc., to Trustee and Company .................................... 13
SECTION 1.06. Notices to Securityholders; Waiver ....................................... 13
SECTION 1.07. Conflict with Trust Indenture Act; Trust Indenture Act Provisions ........ 14
SECTION 1.08. Effect of Headings and Table of Contents ................................. 15
SECTION 1.09. Successors and Assigns ................................................... 15
SECTION 1.10. Separability Clause ...................................................... 15
SECTION 1.11. Benefits of Indenture .................................................... 15
SECTION 1.12. Legal Holidays ........................................................... 15
SECTION 1.13. Governing Law ............................................................ 15
ARTICLE TWO
ISSUANCE OF SECURITIES; FORMS;
OTHER PROVISIONS RELATING TO SECURITIES
SECTION 2.01. Form and Dating .......................................................... 16
SECTION 2.02. Currency; Denominations .................................................. 17
SECTION 2.03. Execution, Authentication and Delivery ................................... 17
SECTION 2.04. Temporary Securities ..................................................... 18
SECTION 2.05. Registration, Registration of Transfer and Exchange ...................... 19
SECTION 2.06. Mutilated, Destroyed, Lost and Stolen Securities ......................... 20
SECTION 2.07. Payment of Interest; Interest Rights Preserved ........................... 21
SECTION 2.08. Place of Payment ......................................................... 22
SECTION 2.09. Persons Deemed Owners .................................................... 22
SECTION 2.10. Cancellation ............................................................. 22
SECTION 2.11. Computation of Interest .................................................. 23
SECTION 2.12. Additional Transfer and Exchange Requirements ............................ 23
SECTION 2.13. CUSIP Numbers ............................................................ 26
ARTICLE THREE
REDEMPTION OF SECURITIES
SECTION 3.01. Right of Redemption ...................................................... 26
SECTION 3.02. Election to Redeem; Notice to Trustee .................................... 26
SECTION 3.03. Selection of Securities to Be Redeemed ................................... 26
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SECTION 3.04. Notice of Redemption .............................................. 27
SECTION 3.05. Deposit of Redemption Price ....................................... 28
SECTION 3.06. Securities Payable on Redemption Date ............................. 28
SECTION 3.07. Securities Redeemed in Part ....................................... 28
SECTION 3.08. Conversion Arrangement on Call for Redemption ..................... 29
SECTION 3.09. Purchase of Securities at Option of the Holder upon Change in
Control ........................................................... 29
SECTION 3.10. Effect of Change in Control Purchase Notice ....................... 32
SECTION 3.11. Deposit of Change in Control Purchase Price ....................... 33
SECTION 3.12. Securities Purchased in Part ...................................... 33
SECTION 3.13. Compliance with Securities Laws upon Purchase of Securities ....... 33
ARTICLE FOUR
CONVERSION
SECTION 4.01. Conversion Privilege .............................................. 34
SECTION 4.02. Conversion Procedure .............................................. 34
SECTION 4.03. Securities Converted in Part ...................................... 36
SECTION 4.04. Fractional Shares ................................................. 36
SECTION 4.05. Taxes on Conversion ............................................... 36
SECTION 4.06. Company to Provide Stock .......................................... 36
SECTION 4.07. Adjustment of Conversion Price .................................... 37
SECTION 4.08. No Adjustment ..................................................... 41
SECTION 4.09. Adjustment for Tax Purposes ....................................... 41
SECTION 4.10. Notice of Adjustment .............................................. 41
SECTION 4.11. Notice of Certain Transactions .................................... 41
SECTION 4.12. Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege .............................................. 42
SECTION 4.13. Trustee's Disclaimer .............................................. 43
SECTION 4.14. Voluntary Reduction ............................................... 43
ARTICLE FIVE
SUBORDINATION
SECTION 5.01. Agreement of Subordination ........................................ 43
SECTION 5.02. Payments to Holders ............................................... 44
SECTION 5.03. Subrogation of Securities ......................................... 46
SECTION 5.04. Authorization to Effect Subordination ............................. 47
SECTION 5.05. Notice to Trustee ................................................. 47
SECTION 5.06. Trustee's Relation to Senior Indebtedness ......................... 48
SECTION 5.07. No Impairment of Subordination .................................... 48
SECTION 5.08. Certain Conversions Deemed Payment ................................ 49
SECTION 5.09. Article Applicable to Paying Agents ............................... 49
SECTION 5.10. Notice to Senior Indebtedness ..................................... 49
SECTION 5.11. Senior Indebtedness Entitled to Rely .............................. 49
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ARTICLE SIX
COVENANTS
SECTION 6.01. Payment of Principal, Premium and Interest ........................ 50
SECTION 6.02. Maintenance of Agency ............................................. 50
SECTION 6.03. Money for Security Payments to Be Held in Trust ................... 50
SECTION 6.04. Payment of Taxes and Other Claims ................................. 51
SECTION 6.05. Maintenance of Properties ......................................... 52
SECTION 6.06. Statement as to Compliance ........................................ 52
SECTION 6.07. Corporate Existence ............................................... 52
SECTION 6.08. SEC Reports ....................................................... 52
SECTION 6.09. Rule 144A Information Requirement ................................. 53
SECTION 6.10. Payment of Additional Interest .................................... 53
SECTION 6.11. Waiver of Covenants ............................................... 53
ARTICLE SEVEN
SECURITYHOLDERS LISTS AND REPORTS
BY TRUSTEE AND COMPANY
SECTION 7.01. Company to Furnish Trustee Name and Addresses of Securityholder ... 54
SECTION 7.02. Preservation of Information; Communications to Securityholders .... 54
SECTION 7.03. Reports by Trustee ................................................ 54
SECTION 7.04. Reports by Company ................................................ 55
SECTION 7.05. Statement by Officers as to Default ............................... 55
ARTICLE EIGHT
REMEDIES
SECTION 8.01. Events of Default ................................................. 55
SECTION 8.02. Acceleration of Maturity; Rescission and Annulment ................ 56
SECTION 8.03. Collection of Indebtedness and Suits for Enforcement by Trustee ... 58
SECTION 8.04. Trustee May File Proofs of Claim .................................. 58
SECTION 8.05. Trustee May Enforce Claims without Possession of Securities ....... 59
SECTION 8.06. Application of Money Collected .................................... 59
SECTION 8.07. Limitation on Suits ............................................... 59
SECTION 8.08. Unconditional Right of Securityholders to Receive Principal,
Premium and Interest and to Convert ............................... 60
SECTION 8.09. Restoration of Rights and Remedies ................................ 60
SECTION 8.10. Rights and Remedies Cumulative .................................... 61
SECTION 8.11. Delay or Omission Not Waiver ...................................... 61
SECTION 8.12. Control by Securityholders ........................................ 61
SECTION 8.13. Waiver of Past Defaults ........................................... 62
SECTION 8.14. Undertaking for Costs ............................................. 62
SECTION 8.15. Waiver of Stay or Extension Laws .................................. 62
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ARTICLE NINE
THE TRUSTEE
SECTION 9.01. Certain Duties and Responsibilities ................................... 63
SECTION 9.02. Notice of Default ..................................................... 63
SECTION 9.03. Certain Rights of Trustee ............................................. 63
SECTION 9.04. Not Responsible for Recitals or Issuance of Securities ................ 65
SECTION 9.05. May Hold Securities ................................................... 65
SECTION 9.06. Money Held in Trust ................................................... 65
SECTION 9.07. Compensation and Reimbursement ........................................ 65
SECTION 9.08. Disqualification; Conflicting Interests ............................... 66
SECTION 9.09. Corporate Trustee Required; Eligibility ............................... 66
SECTION 9.10. Resignation and Removal; Appointment of Successor ..................... 66
SECTION 9.11. Acceptance of Appointment by Successor ................................ 67
SECTION 9.12. Merger, Conversion, Consolidation or Succession to Business of
Trustee ............................................................... 68
SECTION 9.13. Preferential Collection of Claims against Company ..................... 68
SECTION 9.14. Authenticating Agents ................................................. 68
ARTICLE TEN
SECURITYHOLDERS' MEETINGS
SECTION 10.01. Purposes of Meetings .................................................. 69
SECTION 10.02. Call of Meetings by Trustee ........................................... 70
SECTION 10.03. Call of Meetings by Company or Securityholders ........................ 70
SECTION 10.04. Qualifications for Voting ............................................. 70
SECTION 10.05. Regulations ........................................................... 70
SECTION 10.06. Voting ................................................................ 71
SECTION 10.07. Action by Securityholders ............................................. 72
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 11.01. Supplemental Indentures without Consent of Securityholders ............ 72
SECTION 11.02. Supplemental Indentures with Consent of Securityholders ............... 73
SECTION 11.03. Execution of Supplemental Indentures .................................. 73
SECTION 11.04. Effect of Supplemental Indentures ..................................... 74
SECTION 11.05. Conformity with Trust Indenture Act ................................... 74
SECTION 11.06. Reference in Securities to Supplemental Indentures .................... 74
SECTION 11.07. Notice of Supplemental Indentures ..................................... 74
ARTICLE TWELVE
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 12.01. Company May Consolidate, etc., Only on Certain Terms. .................. 74
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SECTION 12.02. Successor Corporation Substituted......................................... 75
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
SECTION 13.01. Satisfaction and Discharge of Indenture................................... 75
SECTION 13.02. Application of Trust Money. .............................................. 76
SECTION 13.03. Reinstatement. ........................................................... 77
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.01. Exemption from Individual Liability....................................... 77
ARTICLE FIFTEEN
MISCELLANEOUS
SECTION 15.01. Counterparts. ............................................................ 78
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THIS INDENTURE is entered into as of October 15, 2001, between
X. X. PENNEY COMPANY, INC., a Delaware corporation (hereinafter called the
"Company"), having its principal executive office located at 0000 Xxxxxx Xxxxx,
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Xxxxx, Xxxxx 00000-0000 and THE BANK OF NEW YORK, as trustee (hereinafter called
the "Trustee"), having its principal corporate trust office located at 000
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Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Corporate Trust Office").
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RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of its 5% Convertible Subordinated
Notes Due October 15, 2008 (herein called the "Securities"). All things
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necessary to make this Indenture a valid agreement of the Company, in accordance
with its terms, have been done.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder that are required to
be part of this Indenture and, to the extent applicable, shall be governed by
such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the holders thereof, the Company and the Trustee mutually covenant
and agree, for the equal and proportionate benefit of the respective holders
from time to time of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. Definitions.
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For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) all references in this instrument to designated "Articles",
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"Sections" and other subdivisions are to the designated Articles,
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Sections and other subdivisions of this Indenture;
(2) 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;
(3) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(4) 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; and
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(5) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting practices.
"Act" when used with respect to any Securityholder has the
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meaning specified in Section 1.04.
"Additional Interest" has the meaning specified in Section 5 of
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the Registration Rights Agreement. All references herein to interest accrued or
payable as of any date shall include any Additional Interest accrued or payable
as of such date as provided in the Registration Rights Agreement.
"Affiliate" of any specified Person means any other Person
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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.
"Agent Members" has the meaning specified in Section 2.01(b).
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"Applicable Procedures" means, with respect to any transfer or
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exchange of beneficial ownership interests in a Global Security, the rules and
procedures of the Depositary that are applicable to such transfer or exchange.
"Authenticating Agent" means any Person appointed as
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Authenticating Agent in accordance with Section 9.14.
"Authorized Newspaper" means a newspaper, in an official language
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of the place of publication or in the English language, customarily published on
each day that is a Business Day in the place of publication, whether or not
published on days that are Legal Holidays in the place of publication, and of
general circulation in each place in connection with which the term is used or
in the financial community of each such place. Whenever successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any day that is a Business Day in the
place of publication.
"Bankruptcy Code" means Title 11 of the United States Code.
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"Board of Directors" means either the board of directors of the
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Company or any duly authorized committee of that board.
"Board Resolution" means a copy of one or more resolutions,
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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, delivered to the Trustee.
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"Business Day" means each day which is neither a Saturday, Sunday
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nor other day on which state or federally chartered banking institutions in New
York, New York and the state in which the Corporate Trust Office is located are
not required to be open.
"Capital Stock" of any Person means any and all shares,
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interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person, but
excluding any debt securities convertible into such equity.
"cash" means such coin or currency of the United States as at any
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time of payment is legal tender for the payment of public and private debts.
"Certificated Security" means a Security that is in substantially
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the form attached hereto as Exhibit A and that does not include the information
or the schedule called for by footnotes 1, 3 and 4 thereof.
"Change in Control" has the meaning specified in Section 3.09(a).
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"Change in Control Purchase Date" has the meaning specified in
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Section 3.09(a).
"Change in Control Purchase Notice" has the meaning specified in
---------------------------------
Section 3.09(c).
"Change in Control Purchase Price" has the meaning specified in
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Section 3.09(a).
"Closing Price" has the meaning specified in Section 4.07(f).
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Commission" means the Securities and Exchange Commission, as
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from time to time constituted, created under the Securities Exchange Act of
1934, 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 on such date.
"Common Stock" means the common stock of the Company, par value
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50(cent) per share, as it exists on the date of this Indenture and any shares of
any class or classes of capital stock of the Company resulting from any
reclassification or reclassifications thereof and which have 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 are
not subject to redemption by the Company; provided, however, that if at any time
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there shall be more than one such resulting class, the shares of each such class
then so issuable on conversion of Securities shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
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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.
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"Company Request" and "Company Order" mean, respectively, a
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written request or order signed in the name of the Company by its Chairman of
the Board, a Vice Chairman of the Board, a President or a Vice President, and by
a Treasurer, an Assistant Treasurer, a Controller, an Assistant Controller, a
Secretary, or an Assistant Secretary, and delivered to the Trustee.
"Conversion Agent" has the meaning specified in Section 6.02.
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"Conversion Date" has the meaning specified in Section 4.02.
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"Conversion Price" has the meaning specified in Section 4.07.
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"Corporate Trust Office" shall be the address of the Trustee
----------------------
specified in the first paragraph of this instrument or such other address as to
which the Trustee may give notice to the Company.
"Current Market Price Per Share" has the meaning specified in
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Section 4.07(f).
"Defaulted" means, when used with respect to any Securities, an
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Event of Default shall have occurred and be continuing, but only if, in the case
of an Event of Default referred to in Section 8.01(4), the written notice
referred to in Section 8.01(4) has been given by the Trustee or by the Holders
of at least 25% in Principal Amount of the Outstanding Securities.
"Defaulted Interest" has the meaning specified in Section 2.07.
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"Depositary" has the meaning specified in Section 2.01(a).
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"Determination Date" has the meaning specified in Section
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4.07(d).
"Dollars" or "$" means a dollar or other equivalent unit of legal
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tender for payment of public or private debts in the United States.
"DTC" has the meaning specified in Section 2.01(a).
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"Event of Default" has the meaning specified in Section 8.01.
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"Exchange Act" means the Securities Exchange Act of 1934 and any
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statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 4.07(e).
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"Expiration Time" has the meaning specified in Section 4.07(e).
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"Final Maturity Date" means October 15, 2008.
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"GAAP" means generally accepted accounting principles in the
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United States of America as in effect as of the date of this Indenture,
including those set forth in (1) the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (2) the statements and pronouncements of the Financial Accounting
4
Standards Board, (3) such other statements by such other entity as approved by a
significant segment of the accounting profession and (4) the rules and
regulations of the SEC governing the inclusion of financial statements
(including pro forma financial statements) in registration statements filed
under the Securities Act and periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff
accounting bulletins and similar written statements from the accounting staff of
the SEC.
"Global Security" means a permanent Global Security that is in
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substantially the form attached hereto as Exhibit A and that includes the
information and schedule called for by footnotes 1, 3 and 4 thereof and which is
deposited with the Depositary or its custodian and registered in the name of the
Depositary or its nominee.
"Indebtedness" means, with respect to any Person, without
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duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or credit or
loan agreements, bonds, debentures, notes or similar instruments, including
indebtedness given in connection with the acquisition of any business,
properties or assets (including securities) (whether or not the recourse of the
lender is to the whole of the assets of such Person or to only a portion
thereof) (other than any accounts payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services), (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances, (c) all obligations and
liabilities (contingent or otherwise) of such Person (i) in respect of leases of
such Person required, in conformity with GAAP, to be accounted for as
capitalized lease obligations on the balance sheet of such Person, or (ii) under
any lease or related document (including a purchase agreement) in connection
with the lease of real property which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased property and
thereby guarantee a residual value of the leased property to the lessor and all
of the obligations of such Person under such lease or related document to
purchase or to cause a third party to purchase such leased property (whether or
not such lease transaction is characterized as an operating lease or a
capitalized lease in accordance with GAAP), (d) all obligations (contingent or
otherwise) of such Person with respect to any interest rate, currency or other
swap, cap, floor or collar agreement, hedge agreement, forward contract, or
other similar instrument or agreement or foreign currency hedge, exchange,
purchase or similar instrument or agreement, (e) all direct or indirect
guaranties or similar agreements by such Person to purchase or otherwise acquire
or otherwise assure a creditor against loss in respect of indebtedness,
obligations or liabilities of another Person of the kind described in clauses
(a) through (d), and (f) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any indebtedness,
obligation or liability of the kind described in clauses (a) through (e).
"Indenture" means this instrument as originally executed and as
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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.
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"Interest Payment Date" when used with respect to any Security
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means the Stated Maturity of an installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of
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1940 and any statute successor thereto, in each case as amended from time to
time.
"junior securities" has the meaning specified in Section 5.08.
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"Legend" has the meaning specified in Section 2.12(a).
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"NNM" has the meaning specified in Section 4.07(f).
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"Notice of Default" means a written notice of the kind
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specified in Section 8.01(4).
"NYSE" has the meaning specified in Section 4.07(f).
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"Officers' Certificate" means a certificate signed by the
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Chairman of the Board, any Vice Chairman of the Board, President or Vice
President of the Company, and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel who
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may (except as otherwise expressly provided in this Indenture) be counsel for
the Company.
"Outstanding" when used with respect to Securities means, as
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of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, other than:
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) On and after a Redemption Date, a Change in Control
Purchase Date or the Final Maturity Date, 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; and
(c) Securities 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
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Securities are valid obligations of the Company.
Securities owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer of the Trustee actually knows to be so owned shall
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be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person authorized by the Company to
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pay the principal of (and premium, if any) or interest, if any, on any
Securities on behalf of the Company.
"Payment Blockage Notice" has the meaning specified in Section
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5.02(ii).
"Person" means any individual, corporation, partnership, joint
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venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every
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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 2.06 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.
"Principal Amount" means, when used with respect to any
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Security, the amount of principal of (and premium, if any, on) such Security
that could then be declared due and payable pursuant to Section 8.02 if such
Security were then a Defaulted Security.
"Purchase Agreement" has the meaning specified in Section
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2.01.
"Purchased Shares" has the meaning specified in Section 4.07
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(e)(1).
"QIB" has the meaning specified in Section 2.01(a).
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"Redemption Date" when used with respect to any Security to be
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redeemed means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to
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be redeemed means the price at which it is to be redeemed pursuant to this
Indenture, as set forth in the form of Security annexed as Exhibit A hereto.
"Registration Rights Agreement" means the Registration Rights
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Agreement, dated as of October 15, 2001, between the Company and Credit Suisse
First Boston Corporation, X. X. Xxxxxx Securities, Inc., Xxxxxxx Xxxxx Barney
Inc., First Union Securities, Inc., HSBC Securities (USA) Inc., Xxxxxxxxx
Xxxxxxxx, Inc., Bear, Xxxxxxx & Co. Inc., Xxxxxx Brothers Inc., Xxxxxxxxxx & Co.
Inc. and The Xxxxxxxx Capital Group, L.P.
"Regular Record Date" for interest payable on a Security on
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any Interest Payment Date means the close of business on the date specified as
such pursuant to this Indenture.
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"Regulation S" means Regulation S under the Securities Act or
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any successor to such Rule.
"Representative" means (a) the indenture trustee or other
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trustee, agent or representative for any Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Responsible Officer" when used with respect to the Trustee
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means any vice president, any assistant vice president, any assistant treasurer,
any trust officer or assistant trust officer 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 who shall have direct responsibility for the
administration of this Indenture and to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"Restricted Certificated Security" means a Certificated
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Security which is a Transfer Restricted Security.
"Restricted Global Security" means a Global Security that is a
--------------------------
Transfer Restricted Security.
"Rule 144" means Rule 144 under the Securities Act or any
--------
successor to such Rule.
"Rule 144A" means Rule 144A under the Securities Act or any
---------
successor to such Rule.
"SEC" means the Securities and Exchange Commission.
---
"Securities" means the 5% Convertible Subordinated Notes Due
----------
October 15, 2008 or any of them (each, a "Security"), as amended or supplemented
--------
from time to time, that are issued under this Indenture.
"Securities Act" means the Securities Act of 1933 and any
--------------
statute successor thereto, in each case as amended from time to time.
"Securities Custodian" means the Trustee, as custodian with
--------------------
respect to the Securities in global form, or any successor thereto.
"Security Register" has the meaning specified in Section 2.05.
-----------------
"Securities Registrar" has the meaning specified in Section
--------------------
6.02.
8
"Securityholder" or "Holder" when used with respect to any
-------------- ------
Security means the Person in whose name such Security is registered in the
Security Register.
"Senior Indebtedness" means the principal of (and premium, if
-------------------
any), interest (including all interest accruing subsequent to the commencement
of any bankruptcy or similar proceeding, whether or not a claim for
post-petition interest is allowable as a claim in any such proceeding) and rent
payable on or in connection with, and all fees, costs, expenses and other
amounts accrued or due on or in connection with, Indebtedness of the Company,
whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Company (including
all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing), unless in the case of any
particular Indebtedness the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness shall
not be senior in right of payment to the Securities or expressly provides that
such Indebtedness is "pari passu" or "junior" to the Securities. Notwithstanding
the foregoing, the term Senior Indebtedness shall not include (i) any obligation
for Federal, state, local or other taxes or (ii) any Indebtedness of the Company
to any Subsidiary of the Company, other than indebtedness to X. X. Penney
Funding Corporation which (x) arises in connection with third-party borrowings
by X. X. Xxxxxx Funding Corporation and (y) is incurred to finance operations of
X. X. Penney Company, Inc., unless in the case of any particular Indebtedness
the instrument creating or evidencing the same or the assumption or guarantee
thereof expressly provides that such Indebtedness will not be senior in right of
payment to the Securities or expressly provides that such Indebtedness is "pari
passu" or "junior" to the Securities. If any payment made to any holder of any
Senior Indebtedness or its Representative with respect to such Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Senior Indebtedness effective as of
the date of such rescission or return.
"Special Record Date" for the payment of any Defaulted
-------------------
Interest means the date fixed by the Trustee pursuant to Section 2.07(1).
"Stated Maturity" when used with respect to any Security, or
---------------
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security, or such installment of principal or interest, is due and payable.
"Subsidiary" means (a) any corporation of which the Company,
----------
directly or indirectly, owns more than 50% of the outstanding stock, which at
the time shall have by the terms thereof ordinary voting power to elect
directors of such corporation, irrespective of whether or not at the time stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency, or (b) any such
corporation of which such percentage of shares of outstanding stock of the
character described in the foregoing clause (a) shall at the time be owned,
directly or indirectly, by the Company and one or more Subsidiaries as defined
in the foregoing clause (a) or by one or more such Subsidiaries.
9
"Trading Day" means, with respect to any security, each
-----------
Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which
securities are not generally traded on the principal exchange or market in which
such security is traded.
"Transfer Certificate" has the meaning specified in Section
--------------------
2.05.
"Transfer Restricted Security" means a Security required to
----------------------------
bear the restricted legend set forth in the form of Security attached as Exhibit
A to this Indenture.
"Triggering Distribution" has the meaning specified in Section
-----------------------
4.07(d).
"Trust Indenture Act" or "TIA" 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.
"Trustee" means the Person named as the "Trustee" in the first
------- -------
paragraph of this instrument until a successor Trustee shall have become such
with respect to the Securities pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean the Person who is then Trustee
-------
hereunder.
"U.S. Government Obligations" means securities which are (1)
---------------------------
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged, or (2) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, provided that the payment of such obligations is unconditionally
--------
guaranteed as a full faith and credit obligation by the United States of
America. The term "U.S. Government Obligations" shall also include depository
---------------------------
receipts issued by a bank or trust company as custodian and evidencing ownership
by the holders of such depository receipts of future payments of interest or
principal, or both, on U.S. Government Obligations, as defined above, held by
such custodian, provided that except as required by law, no deduction may be
--------
made by the custodian from the amount payable to the holder of any such
depository receipt from the amount received by the custodian in respect of any
such payment of interest or principal.
"Unissued Shares" has the meaning specified in Section
---------------
3.09(a).
"Unrestricted Certificated Security" means a Certificated
----------------------------------
Security that is not a Transfer Restricted Security.
"Unrestricted Global Security" means a Global Security that is
----------------------------
not a Transfer Restricted Security.
"Voting Stock" of a Person means any class or classes of
------------
Capital Stock of such Person pursuant to which the holders of Capital Stock
under ordinary circumstances have the power to vote in the election of the board
of directors, managers or trustees of any person or other persons performing
similar functions irrespective of whether or not, at the time Capital Stock of
any other class or classes shall have, or might have, voting power by reason of
the occurrence of any contingency.
10
SECTION 1.02. 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 an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents or any of them is specifically required by any provision of
this Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for the Officer's
Certificate required by Section 6.06) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. 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, 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.
11
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 1.04. Acts of Securityholders.
-----------------------
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Securityholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
in person or by 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, 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 Securityholders 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 9.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
Without limiting the generality of this Section 1.04, unless
otherwise provided in or pursuant to this Indenture, a Holder, including a
Depository or its nominee that is a Holder of a Global Security, may make, give
or take, by a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in or
pursuant to this Indenture to be made, given or taken by Holders, and a
Depository or its nominee that is a Holder of a Global Security may provide its
proxy or proxies to the beneficial owners of interests in any such Global
Security through such Depository's standing instructions and customary
practices.
(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 Person acting in a capacity other than such Person's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of the authority of the Person executing the same. 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 ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by 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.
12
(e) The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action, provided or permitted by this Indenture to be given or taken by Holders
of Securities. With regard to any record date set pursuant to this paragraph,
the Holders of Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to give or take the
relevant action, whether or not such Holders remain Holders after such record
date. With regard to any action that may be given or taken hereunder only by
Holders of a requisite Principal Amount of Outstanding Securities (or their duly
appointed agents) and for which a record date is set pursuant to this paragraph,
the Company may, at its option, set an expiration date after which no such
action purported to be given or taken by any Holder shall be effective hereunder
unless given or taken on or prior to such expiration date by Holders of the
requisite Principal Amount of Outstanding Securities on such record date (or
their duly appointed agents). On or prior to any expiration date set pursuant to
this paragraph, the Company may, on one or more occasions at its option, extend
such date to any later date. Notwithstanding the foregoing, the Company shall
not set a record date for, and the provisions of this paragraph shall not apply
with respect to, any action to be given or taken by Holders pursuant to Section
8.01, 8.02 or 8.12.
Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the Principal Amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Principal Amount.
SECTION 1.05. Notices, etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Securityholders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Securityholder 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,
or
(2) the Company by the Trustee or by any Securityholder, shall be
sufficient for every purpose hereunder (except as provided in Section
8.01(4)) if in writing and mailed, first-class, postage prepaid, to
the Company addressed to the attention of its Treasurer at the address
of its principal office specified in the first paragraph of this
Indenture or at any other address previously furnished in writing to
the Trustee by the Company.
SECTION 1.06. Notices to Securityholders; Waiver.
----------------------------------
Where this Indenture provides for notice to Securityholders 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 Securityholder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Securityholders is
13
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Securityholder shall affect the sufficiency
of such notice with respect to other Securityholders. Any notice which is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given or provided.
In case, by reason of the suspension of publication of any
Authorized Newspaper or the suspension of regular mail service, or by reason of
any other cause, it shall be impractical to make publication of any notice in an
Authorized Newspaper or Authorized Newspapers or to give such notice by mail as
required by this Indenture, then such method of publication or notification as
shall be made with the approval of the Trustee shall constitute a sufficient
publication or notification for every purpose hereunder.
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 Securityholders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 1.07. Conflict with Trust Indenture Act; Trust Indenture
--------------------------------------------------
Act Provisions.
--------------
(a) If any provision hereof limits, qualifies or conflicts with a
provision of the TIA which is required to be included in this Indenture by any
of the provisions of the TIA, such required provision of the TIA shall control.
If any provision of this Indenture modifies or excludes any provision of the TIA
that may be so modified or excluded, the provision of the TIA shall be deemed to
apply to this Indenture as so modified or shall be excluded, as the case may be.
(b) The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and "obligor" on the indenture securities means the Company or any other obligor
on the Securities.
All other terms used in this Indenture that are defined in the TIA, defined by
TIA reference to another statute or defined by any SEC rule and not otherwise
defined herein have the meanings assigned to them therein.
14
SECTION 1.08. 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 1.09. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
-------------------
In case any provision in this Indenture or in any of 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.
SECTION 1.11. 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, the Securityholders and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 1.12. Legal Holidays.
--------------
In any case where the date of any Interest Payment Date or
Redemption Date or the Final Maturity Date of any Security or any date on which
any Defaulted Interest is proposed to be paid or the last day on which a
Securityholder has the right to convert his Security at a particular Conversion
Price shall not be a Business Day, then (notwithstanding any other provision of
the Securities or this Indenture) payment of the principal of (and premium, if
any) or interest on, or conversion of, such Security need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the nominal date of any such Interest Payment Date or
Redemption Date or Final Maturity Date or on such date on which Defaulted
Interest is proposed to be paid or on such last day for conversion, and no
interest shall accrue for the period from and after any such nominal date.
SECTION 1.13. Governing Law.
-------------
This Indenture and the Securities shall be construed in
accordance with and governed by the internal laws (and not the law of conflicts)
of the State of New York applicable to agreements made or instruments entered
into and, in each case, performed in said state.
15
ARTICLE TWO
ISSUANCE OF SECURITIES; FORMS;
OTHER PROVISIONS RELATING TO SECURITIES
SECTION 2.01. Form and Dating.
---------------
The Securities and the Trustee's certificate of authentication
shall be substantially in the respective forms set forth in Exhibit A, which
Exhibit is incorporated in and made part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Security shall be dated the date of its authentication. The
Securities are being offered and sold by the Company pursuant to a Purchase
Agreement, dated October 9, 2001 (the "Purchase Agreement"), between the
------------------
Company, Credit Suisse First Boston Corporation, X. X. Xxxxxx Securities, Inc.,
Xxxxxxx Xxxxx Barney Inc., First Union Securities, Inc., HSBC Securities (USA)
Inc., Xxxxxxxxx Xxxxxxxx, Inc., Bear, Xxxxxxx & Co. Inc., Xxxxxx Brothers Inc.,
Xxxxxxxxxx & Co. Inc. and The Xxxxxxxx Capital Group, L.P., as representatives
of the several Purchasers (as defined in the Purchase Agreement) in transactions
exempt from, or not subject to, the registration requirements of the Securities
Act.
(a) Restricted Global Securities. All of the Securities are
----------------------------
initially being offered and sold to qualified institutional buyers as defined in
Rule 144A (collectively, "QIBs" or individually, each a "QIB") in reliance on
--- ---
Rule 144A under the Securities Act or to non-U.S. Persons in offshore
transactions in reliance on Regulation S under the Securities Act and shall be
issued initially in the form of one or more Restricted Global Securities, which
shall be deposited on behalf of the purchasers of the Securities represented
thereby with the Trustee, at its Corporate Trust Office, as custodian for the
depositary, The Depository Trust Company ("DTC") (such depositary, or any
---
successor thereto, being hereinafter referred to as the "Depositary"), and
----------
registered in the name of its nominee, Cede & Co., duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Restricted Global Security may from time to time be
increased or decreased by adjustments made on the records of the Securities
Custodian as hereinafter provided, subject in each case to compliance with the
Applicable Procedures.
(b) Global Securities In General. Each Global Security shall
----------------------------
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions, purchases or
conversions of such Securities. Any endorsement of a Global Security to reflect
the amount of any increase or decrease in the amount of outstanding Securities
represented thereby shall be made by the Securities Custodian in accordance with
the standing instructions and procedures existing between the Depositary and the
Securities Custodian.
Members of, or participants in, the Depositary ("Agent
-----
Members") shall have no rights under this Indenture with respect to any Global
-------
Security held on their behalf by the Depositary or under any Global Security,
and the Depositary (including, for this purpose, its nominee) may be treated by
the Company, the Trustee and any agent of the Company or the
16
Trustee as the absolute owner and Holder of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall (A)
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or (B) impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the exercise of
the rights of a Holder of any Security.
(c) Book Entry Provisions. The Company shall execute and the
---------------------
Trustee shall, in accordance with this Section 2.01(c), authenticate and deliver
initially one or more Global Securities that (a) shall be registered in the name
of the depositary, (b) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instructions and (c) shall bear legends
substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO X. X. PENNEY
COMPANY, INC. (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 THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY
TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF."
SECTION 2.02. Currency; Denominations.
-----------------------
The principal of, any premium and interest on the Securities
shall be payable in Dollars. The Securities shall be issuable as a registered
Security without coupons in the denomination of $1,000 or any integral multiple
thereof.
SECTION 2.03. Execution, Authentication and Delivery.
--------------------------------------
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, one of its Vice Chairmen of the Board, its President
or one of its Vice Presidents and attested by its Secretary or one of its
Assistant Secretaries. The signatures of any or all of these officers on the
Securities may be manual or facsimile.
17
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.
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 included
in Exhibit A manually executed by the Trustee or on its behalf as provided in
Section 9.14, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 2.10, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
The Trustee shall authenticate and make available for delivery
Securities for original issue in the aggregate principal amount of up to $600
million (plus up to an additional $50 million in aggregate principal amount
issuable upon the exercise of the option described in the Purchase Agreement)
upon receipt of a Company Order. The Company Order shall specify the amount of
Securities to be authenticated, shall provide that all such Securities will be
represented by a Restricted Global Security and the date on which each original
issue of Securities is to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $600 million plus the amount
(up to an additional $50 million) issuable upon exercise of the option in the
Purchase Agreement, except as provided in Section 2.06.
SECTION 2.04. Temporary Securities.
--------------------
Pending the preparation of definitive Securities, the Company
may execute, and upon receipt of a Company Order the Trustee shall authenticate
and deliver, temporary Securities which may be printed, lithographed,
typewritten, mimeographed or otherwise produced in any authorized denomination,
substantially in the form 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 to a Securities Registrar, 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 the same tenor and
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.
18
SECTION 2.05. Registration, Registration of Transfer and
------------------------------------------
Exchange.
--------
The Company shall keep or cause to be kept a register or
registers (hereinafter sometimes referred to as the "Security Register") in
-----------------
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and the registration of
transfers of Securities. Any such register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at any agency or
office maintained by the Company for such purposes as provided in Section 6.02.
Subject to compliance with any applicable additional
requirements contained in Section 2.12, upon surrender for registration of
transfer of any Security at any agency or office maintained by the Company for
such purposes, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees and in
authorized denominations, one or more new Securities of like tenor and aggregate
principal amount.
Subject to compliance with any applicable additional
requirements contained in Section 2.12, at the option of the Holder, Securities
may be exchanged for a like aggregate principal amount of other Securities, in
authorized denominations and date of maturity and tenor, upon surrender of the
Securities to be exchanged at any 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 Securityholder 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 the form
included in Exhibit A and, if applicable, a transfer certificate in the form
included as Exhibit B (the "Transfer Certificate"), and each in form
--------------------
satisfactory to the Company and the Securities Registrar (if other than the
Company) duly executed, by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made 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 2.04, 2.06, 2.12(a)(1), 3.07, 3.12, 4.03 or
11.06 not involving any transfer.
The Company may but shall not be required (i) 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 Securities selected for redemption under Section 3.03 and ending
at the close of business on the day of such mailing, (ii) to register the
transfer of
19
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part, (iii) to issue,
register the transfer of or exchange any Security that, in accordance with its
terms, has been surrendered for payment at the option of the Holder, except the
portion, if any, of such Security not to be so paid or (iv) any Securities or
portions thereof in respect of which a Change in Control Purchase Notice has
been delivered and not withdrawn by the Holder thereof, except, in the case of
the purchase of a Security in part, the portion not to be purchased.
Each Global Security authenticated under this Indenture shall
be registered in the name of the Depository designated for such Global Security
or a nominee thereof and delivered to such Depository or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.
SECTION 2.06. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If (i) any mutilated Security is surrendered to the Company,
the Trustee, or a Securities Registrar, or if the Company, the Trustee and a
Securities Registrar receive evidence to their satisfaction of the destruction,
loss or theft of any Security, and (ii) there is delivered to the Company, the
Trustee and the applicable Securities Registrar 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, the Trustee or the
applicable Securities Registrar that such Security has been acquired by a bona
----
fide purchaser, the Company shall execute and upon its request the Trustee shall
----
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Security, a new Security of the same date of maturity
and principal amount and of like tenor, 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, or is about to be redeemed or
converted pursuant to the terms of the Security and this Indenture, 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 relation thereto and any other
expenses (including the fees and expenses of the Trustee or the applicable
Securities Registrar) connected therewith.
Every new Security issued pursuant to this Section in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
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 2.06 as amended or supplemented
pursuant to this Indenture shall be 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.
20
SECTION 2.07. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on each 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 Payment
Date.
All interest on each 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 registered
------------------
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 Clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Person in whose name the Security (or a Predecessor Security) is
registered at the close of business on a Special Record Date (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 payment of such Defaulted Interest which shall
be not more than 15 nor 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
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 of a Security in respect of which such
Defaulted Interest is payable at such Holder's address as it appears in the
Security Register, not less than 10 days prior to such Special Record Date.
The Trustee may, in its discretion, in the name and at the expense of the
Company, cause a similar notice to be published at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York, but
such publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Securities in respect of which such Defaulted Interest is payable
(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 on the
Securities in any other lawful manner not inconsistent with the applicable
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee
21
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee. 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, which were carried by such other Security.
SECTION 2.08. Place of Payment.
----------------
The principal and the Redemption Price of, and interest (including
Additional Interest, if any) on, each Security shall be payable at the agency or
office maintained by the Company for such purposes as provided in Section 6.02;
provided, however, that at the option of the Company payment of interest may be
-------- -------
made by check mailed by first class mail to the address of the Person entitled
thereto at such address as shall appear in the Security Register; provided,
--------
further, that a Holder with an aggregate principal amount in excess of
-------
$2,000,000 will be paid by wire transfer in immediately available funds at the
election of such Holder.
SECTION 2.09. Persons Deemed Owners.
---------------------
Prior to due presentment for registration of transfer of any Security,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name any Security is registered as the absolute owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any), and (subject to Section 2.07) interest, if any, 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.
No Person entitled to any beneficial interest in any Global Security
held on its behalf by a Depository or its nominee shall, as such, have any
rights under this Indenture with respect to such Global Security, and such
Depository or its nominee may be treated by the Company, the Trustee, and any
agent of the Company or the Trustee as the owner of such Global Security for all
purposes whatsoever. None of the Company, the Trustee, any Paying Agent or the
Securities Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 2.10. Cancellation.
------------
Each Security surrendered for payment, registration of transfer,
conversion, exchange or redemption shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and any such Security, as well as
Securities surrendered directly to the Trustee for any such purpose, shall be
promptly canceled by it. All Securities which are redeemed, purchased or
otherwise acquired by the Company or any of its Subsidiaries prior to the Final
Maturity Date shall be delivered to the Trustee for cancellation and all
Securities so delivered shall be promptly canceled by the Trustee. The Company
may not hold or resell such Securities or issue any new Securities to replace
any such Securities or any Securities that any Holder has converted pursuant to
Article 4. Without limitation to the foregoing, any Securities acquired by
22
any investment bankers pursuant to Section 3.08 shall be surrendered for
conversion and thereafter cancelled, and may not be reoffered, sold or otherwise
transferred. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be disposed of as directed by a Company Order; provided, however, that in no
-------- -------
event shall the Trustee be required to destroy any canceled Securities.
SECTION 2.11. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 2.12. Additional Transfer and Exchange Requirements.
---------------------------------------------
(a) If Securities are issued upon the transfer, exchange or
replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the forms of Securities attached hereto as Exhibit A
setting forth such restrictions (collectively, the "Legend"), or if a request is
------
made to remove the Legend on a Security, the Securities so issued shall bear the
Legend, or the Legend shall not be removed, as the case may be, unless there is
delivered to the Company and the Securities Registrar such satisfactory
evidence, which shall include an Opinion of Counsel if requested by the Company
or such Securities Registrar, as may be reasonably required by the Company and
the Securities Registrar, that neither the Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or that
such Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act; provided that no such evidence need be supplied in connection
--------
with the sale of such Security pursuant to a registration statement that is
effective at the time of such sale. Upon (i) provision of such satisfactory
evidence if requested, or (ii) notification by the Company to the Trustee and
Securities Registrar of the sale of such Security pursuant to a registration
statement that is effective at the time of such sale, the Trustee, at the
written direction of the Company, shall authenticate and deliver a Security that
does not bear the Legend. If the Legend is removed from the face of a Security
and the Security is subsequently held by an Affiliate of the Company, the Legend
shall be reinstated.
(b) A Global Security may not be transferred, in whole or in part, to
any Person other than the Depositary or a nominee or any successor thereof, and
no such transfer to any such other Person may be registered; provided that the
--------
foregoing shall not prohibit any transfer of a Security that is issued in
exchange for a Global Security but is not itself a Global Security. No transfer
of a Security to any Person shall be effective under this Indenture or the
Securities unless and until such Security has been registered in the name of
such Person. Notwithstanding any other provisions of this Indenture or the
Securities, transfers of a Global Security, in whole or in part, shall be made
only in accordance with this Section 2.12.
(c) Subject to the succeeding paragraph, every Security shall be
subject to the restrictions on transfer provided in the Legend. Whenever any
Transfer Restricted Security is presented or surrendered for registration of
transfer or for exchange for a Security registered in a name other than that of
the Holder, such Transfer Restricted Security must be accompanied by a Transfer
Certificate, dated the date of such surrender and signed by the Holder of such
Security,
23
as to compliance with such restrictions on transfer. The Securities Registrar
shall not be required to accept for such registration of transfer or exchange
any Security not so accompanied by a properly completed certificate.
(d) The restrictions imposed by the Legend upon the transferability of
any Security shall cease and terminate when such Security has been sold pursuant
to an effective registration statement under the Securities Act or transferred
in compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Securities Registrar in
accordance with the provisions of this Section 2.12 (accompanied, in the event
that such restrictions on transfer have terminated by reason of a transfer in
compliance with Rule 144 or any successor provision, by, if requested, an
Opinion of Counsel reasonably acceptable to the Company, addressed to the
Company and in form acceptable to the Company, to the effect that the transfer
of such Security has been made in compliance with Rule 144 or such successor
provision), be exchanged for a new Security, of like tenor and aggregate
principal amount, which shall not bear the restrictive Legend. The Company shall
inform the Trustee of the effective date of any registration statement
registering the Securities under the Securities Act. The Trustee shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned opinion of counsel or registration statement.
(e) As used in the preceding two paragraphs of this Section 2.12, the
term "transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.
(f) The provisions of clauses (A), (B), (C) and (D) below shall apply
only to Global Securities:
(A) Notwithstanding any other provisions of this Indenture or the
Securities, a Global Security shall not be exchanged in whole or in
part for a Security registered in the name of any Person other than
the Depositary or one or more nominees thereof, provided that a Global
--------
Security may be exchanged for Securities registered in the names of
any person designated by the Depositary in the event that (i) the
Depositary has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or such Depositary has
ceased to be a "clearing agency" registered under the Exchange Act,
and a successor Depositary is not appointed by the Company within 90
days, (ii) the Company has provided the Depositary with written notice
that it has decided to discontinue use of the system of book entry
transfer through the Depositary or any successor Depositary or (iii)
an event of default has occurred and is continuing with respect to the
Securities. Any Global Security exchanged pursuant to clauses (i) or
(ii) above shall be so exchanged in whole and not in part, and any
Global Security exchanged pursuant to clause (iii) above may be
exchanged in whole or from time to time in part as directed by the
Depositary. Any Security issued in exchange for a Global Security or
any portion thereof shall be a Global Security;
24
provided that any such Security so issued that is registered in the
--------
name of a Person other than the Depositary or a nominee thereof shall
not be a Global Security.
(B) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully registered form,
without interest coupons, shall have an aggregate principal amount
equal to that of such Global Security or portion thereof to be so
exchanged, shall be registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear the
applicable legends provided for herein. Any Global Security to be
exchanged in whole shall be surrendered by the Depositary to the
Trustee, as Securities Registrar. With regard to any Global Security
to be exchanged in part, either such Global Security shall be so
surrendered for exchange or, if the Trustee is acting as custodian for
the Depositary or its nominee with respect to such Global Security,
the principal amount thereof shall be reduced, by an amount equal to
the portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee. Upon any such surrender
or adjustment, the Trustee shall authenticate and deliver the Security
issuable on such exchange to or upon the order of the Depositary or an
authorized representative thereof.
(C) Subject to the provisions of clause (E) below, the registered
Holder may grant proxies and otherwise authorize any Person, including
Agent Members and persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take under
this Indenture or the Securities.
(D) In the event of the occurrence of any of the events specified
in clause (1) above, the Company will promptly make available to the
Trustee a reasonable supply of Certificated Securities in definitive,
fully registered form, without interest coupons.
(E) Neither Agent Members nor any other Persons on whose behalf
Agent Members may act shall have any rights under this Indenture with
respect to any Global Security registered in the name of the
Depositary or any nominee thereof, or under any such Global Security,
and the Depositary or such nominee, as the case may be, may be treated
by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner and holder of such Global Security for
all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or such nominee, as
the case may be, or impair, as between the Depositary, its Agent
Members and any other person on whose behalf an Agent Member may act,
the operation of customary practices of such Persons governing the
exercise of the rights of a holder of any Security.
(g) Transfers to the Company. Nothing in this Indenture or in the
------------------------
Securities shall prohibit the sale or other transfer of any Securities
(including beneficial interests in Global
25
Securities) to the Company or any of its Subsidiaries, which Securities shall
thereupon be cancelled in accordance with Section 2.10.
SECTION 2.13. 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 or purchase 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 or purchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption or
purchase shall not be affected by any defect in or omission of such numbers. The
Company will promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE THREE
REDEMPTION OF SECURITIES
SECTION 3.01. Right of Redemption.
-------------------
The Company may redeem and pay prior to Final Maturity Date all or any
part of the Securities at any time on or after October 20, 2004 on at least 20
days and no more than 60 days notice at the Redemption Prices specified in
paragraph 5 of the form of Security attached hereto as Exhibit A, together with
accrued interest up to but not including the Redemption Date; provided that if
--------
the Redemption Date is an Interest Payment Date, interest will be payable to the
Holders in whose name the Securities are registered at the close of business on
the relevant record dates for payment of such interest.
SECTION 3.02. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem all or any part of the Securities
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee in its sole discretion),
notify the Trustee of such Redemption Date and of the principal amount of
Securities to be redeemed.
SECTION 3.03. Selection of Securities to Be Redeemed.
--------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by lot, or, in its discretion, on a pro rata basis. The
portions of the principal of Securities so selected for partial redemption shall
be equal to such minimum denomination or an integral multiple thereof.
The Trustee shall promptly notify the Company and the Securities
Registrar (if other than itself) in writing of the Securities selected for
redemption.
26
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 of such Securities which has been or is to be redeemed.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed to
be the portion selected for redemption. Securities which have been converted
during a selection of Securities to be redeemed shall be treated by the Trustee
as outstanding for the purpose of such selection.
SECTION 3.04. Notice of Redemption.
--------------------
Except as otherwise provided by or pursuant to the Board Resolution
authorizing the Securities, notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 20 nor more than 60 days prior to
the Redemption Date, to the Holder of each Security to be redeemed, at such
Holder's address appearing in the Security Register.
Any notice that is mailed to the Holder of any Securities in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities are to be redeemed, the
identification (and, in the case of partial redemption, the respective
principal amounts) of the Securities to be redeemed from the Holders to whom
the notice is given;
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed, that interest thereon shall
cease to accrue on and after said date and that, unless the Company defaults
in making the redemption payment, on and after said date the only remaining
right of the Holder shall be to receive payment of the Redemption Price plus
accrued interest to, but excluding, the Redemption Date;
(5) the current Conversion Price and any adjustments thereto;
(6) that Holders who wish to convert Securities must surrender such
Securities for conversion no later than the close of business on the
Business Day immediately preceding the Redemption Date and must satisfy the
other requirements in paragraph 8 of the Securities; and
(7) the name and address of each Paying Agent where such Securities
maturing after the Redemption Date, are to be surrendered for payment of the
27
Redemption Price and any accrued interest pertaining thereto, and the
name and address of each Conversion Agent where such securities may be
surrendered for conversion.
If any of the Securities to be redeemed is in the form of a Global
Security, then the Company shall modify such notice to the extent necessary to
accord with the procedures of the Depositary applicable to redemptions. Notice
of redemption of Securities to be redeemed at the election of the Company shall
be given by the Company or, on Company Request delivered at least 15 Business
Days prior to the date on which such notice is to be given (unless a shorter
period shall be acceptable to the Trustee in its reasonable judgment), by the
Trustee in the name and at the expense of the Company.
SECTION 3.05. Deposit of Redemption Price.
---------------------------
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 6.03) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) any interest on all the Securities or
portions thereof which are to be redeemed on that date, other than Securities or
portions thereof called for redemption on that date which have been delivered by
the Company to the Trustee for cancellation or have been converted.
SECTION 3.06. 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 on such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest), except for
Securities that are converted in accordance with the provisions of this
Indenture, such Securities shall cease to bear interest. Upon surrender of such
Securities for redemption in accordance with such notice, such Securities shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date. 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 Regular Record Dates according to their terms and the
provisions of Section 2.07, except as otherwise provided in this Indenture with
respect to such Securities.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate specified by the
terms of such Security.
SECTION 3.07. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered
to a Paying Agent (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 denominations as requested by
such Holder, in
28
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered. If a Global Security is so
surrendered, such new Security so issued shall be a new Global Security in a
denomination equal to the unredeemed portion of the principal of the Global
Security so surrendered.
SECTION 3.08. Conversion Arrangement on Call for Redemption.
---------------------------------------------
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities called for redemption
by an agreement with one or more investment bankers or other purchasers to
purchase such Securities by paying to a Paying Agent (other than the Company or
any of its Affiliates) in trust for the Holders, prior to the Redemption Date,
an amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) any interest on all the
Securities or portions thereof which are to be redeemed on that date.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price of such Securities,
including all accrued interest, shall be deemed to be satisfied and discharged
to the extent such amount is so paid by such purchasers; provided, however, that
-------- -------
nothing in this Section 3.08 shall relieve the Company of its obligation to pay
the Redemption Price, plus accrued interest to but excluding the relevant
Redemption Date, on Securities called for redemption. If such an agreement with
one or more investment banks or other purchasers is entered into, any Securities
called for redemption and not surrendered for conversion by the Holders thereof
prior to the relevant Redemption Date may, at the option of the Company upon
written notice to the Trustee, be deemed, to the fullest extent permitted by
law, acquired by such purchasers from such Holders and (notwithstanding anything
to the contrary contained in Article 4) surrendered by such purchasers for
conversion, all as of the Redemption Date, subject to payment of the above
amount as aforesaid. The Paying Agent shall hold and pay to the Holders whose
Securities are selected for redemption any such amount paid to it for purchase
in the same manner as it would money deposited with it by the Company for the
redemption of Securities. Without the Paying Agent's prior written consent, no
arrangement between the Company and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Paying Agent as set forth
in this Indenture, and the Company agrees to indemnify the Paying Agent from,
and hold it harmless against, any loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Paying Agent in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
SECTION 3.09. Purchase of Securities at Option of the Holder upon
---------------------------------------------------
Change in Control.
-----------------
(a) If at any time that Securities remain outstanding there shall
occur a Change in Control, Securities shall be purchased by the Company at the
option of the Holders thereof as of the date that is 30 Business Days after the
occurrence of the Change in Control (the "Change in Control Purchase Date") at a
-------------------------------
purchase price equal to the principal amount of the Securities, plus accrued and
unpaid interest to, but excluding, the Change in Control Purchase
29
Date (the "Change in Control Purchase Price"), subject to satisfaction by or on
--------------------------------
behalf of any Holder of the requirements set forth in subsection (c) of this
Section 3.09.
A "Change in Control" shall be deemed to have occurred if any of the
-----------------
following occurs after the date hereof:
(1) any "person" or "group" (as such terms are defined below) is or
becomes the "beneficial owner" (as defined below), directly or indirectly,
of shares of Voting Stock of the Company representing 50% or more of the
total voting power of all outstanding classes of Voting Stock of the Company
or has the power, directly or indirectly, to elect a majority of the members
of the Board of Directors of the Company;
(2) the Company consolidates with, or merges with or into, another
Person or the Company sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of the assets of the Company,
or any Person consolidates with, or merges with or into, the Company, in any
such event other than pursuant to a transaction in which the Persons that
"beneficially owned" (as defined below), directly or indirectly, shares of
Voting Stock of the Company immediately prior to such transaction
"beneficially own" (as defined below), directly or indirectly, shares of
Voting Stock of the Company representing at least a majority of the total
voting power of all outstanding classes of Voting Stock of the surviving or
transferee Person; or
(3) there shall occur the liquidation or dissolution of the Company.
For the purpose of the definition of Change in Control, (i) "person"
and "group" have the meanings given such terms under Sections 13(d) and 14(d) of
the Exchange Act or any successor provision to either of the foregoing, and the
term "group" includes any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act (or any successor provision thereto), (ii) a "beneficial owner"
shall be determined in accordance with Rule 13d-3 under the Exchange Act, as in
effect on the date of this Indenture, except that the number of shares of Voting
Stock of the Company shall be deemed to include, in addition to all outstanding
shares of Voting Stock of the Company and Unissued Shares deemed to be held by
the "person" or "group" (as such terms are defined above) or other Person with
respect to which the Change in Control determination is being made, all Unissued
Shares deemed to be held by all other Persons, and (iii) the terms "beneficially
owned" and "beneficially own" shall have meanings correlative to that of
"beneficial owner." The term "Unissued Shares" means shares of Voting Stock not
---------------
outstanding that are subject to options, warrants, rights to purchase or
conversion privileges exercisable within 60 days of the date of determination of
a Change in Control.
Notwithstanding anything to the contrary set forth in this Section
3.09, a Change in Control will not be deemed to have occurred if, in the case of
a merger or consolidation, all of the consideration (excluding cash payments for
fractional shares in the merger or consolidation constituting the Change in
Control) consists of common stock traded on a United States national securities
exchange or quoted on the Nasdaq National Market (or which will be so traded or
quoted when issued or exchanged in connection with such Change In Control) and
as a result of
30
such transaction or transactions the Securities become convertible solely into
such common stock.
(b) Within 10 Business Days after the occurrence of a Change in
Control, the Company shall mail a written notice of the Change in Control to the
Trustee (and the Paying Agent if the Trustee is not then acting as Paying Agent)
and to each Holder (and to beneficial owners as required by applicable law). The
notice shall include the form of a Change in Control Purchase Notice to be
completed by the Holder and shall state:
(1) the date of such Change in Control and, briefly, the events
causing such Change in Control;
(2) the date by which the Change in Control Purchase Notice pursuant
to this Section 3.09 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) briefly, the conversion rights of the Securities;
(6) the name and address of each Paying Agent and Conversion Agent;
(7) the Conversion Price and any adjustments thereto;
(8) that Securities as to which a Change in Control Purchase Notice
has been given may be converted into Common Stock pursuant to Article 4 of
this Indenture only to the extent that the Change in Control Purchase
Notice has been withdrawn in accordance with the terms of this Indenture;
(9) the procedures that the Holder must follow to exercise rights
under this Section 3.09;
(10) the procedures for withdrawing a Change in Control Purchase
Notice, including a form of notice of withdrawal; and
(11) that the Holder must satisfy the requirements set forth in
paragraph 8 of the Securities in order to convert the Securities.
If any of the Securities is in the form of a Global Security, then the
Company shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to the repurchase of Global Securities.
(c) A Holder may exercise its rights specified in subsection (a) of
this Section 3.09 upon delivery of a written notice (which shall be in
substantially the form included in Exhibit A hereto and which may be delivered
by letter, overnight courier, hand delivery, facsimile transmission or in any
other written form and, in the case of Global Securities, may be delivered
electronically or by other means in accordance with the Depositary's customary
31
procedures) of the exercise of such rights (a "Change in Control Purchase
--------------------------
Notice") to any Paying Agent at any time prior to the close of business on the
------
Business Day next preceding the Change in Control Purchase Date.
The delivery of such Security to any Paying Agent (together with all
necessary endorsements) at the office of such Paying Agent shall be a condition
to the receipt by the Holder of the Change in Control Purchase Price therefor.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of the Indenture that apply
to the purchase of all of a Security pursuant to Sections 3.09 through 3.13 also
apply to the purchase of such portion of such Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to a Paying Agent the Change in Control Purchase Notice contemplated by this
subsection (c) shall have the right to withdraw such Change in Control Purchase
Notice in whole or in a portion thereof that is a principal amount of $1,000 or
in an integral multiple thereof at any time prior to the close of business on
the Business Day next preceding the Change in Control Purchase Date by delivery
of a written notice of withdrawal to the Paying Agent in accordance with Section
3.10.
A Paying Agent shall promptly notify the Company of the receipt by it
of any Change in Control Purchase Notice or written withdrawal thereof.
Anything herein to the contrary notwithstanding, in the case of Global
Securities, any Change in Control Purchase Notice may be delivered or withdrawn
and such Securities may be surrendered or delivered for purchase in accordance
with the Applicable Procedures as in effect from time to time.
SECTION 3.10. Effect of Change in Control Purchase Notice.
-------------------------------------------
Upon receipt by any Paying Agent of the Change in Control Purchase
Notice specified in Section 3.09(c), the Holder of the Security in respect of
which such Change in Control Purchase Notice was given shall (unless such Change
in Control Purchase Notice is withdrawn as specified below) thereafter be
entitled to receive the Change in Control Purchase Price with respect to such
Security. Such Change in Control Purchase Price shall be paid to such Holder
promptly following the later of (a) the Change in Control Purchase Date with
respect to such Security (provided the conditions in Section 3.09(c) have been
--------
satisfied) and (b) the time of delivery of such Security to a Paying Agent by
the Holder thereof in the manner required by Section 3.09(c). Securities in
respect of which a Change in Control Purchase Notice has been given by the
Holder thereof may not be converted into shares of Common Stock on or after the
date of the delivery of such Change in Control Purchase Notice unless such
Change in Control Purchase Notice has first been validly withdrawn.
A Change in Control Purchase Notice may be withdrawn by means of a
written notice (which may be delivered by letter, overnight courier, hand
delivery, facsimile transmission or in any other written form and, in the case
of Global Securities, may be delivered
32
electronically or by other means in accordance with the Depositary's customary
procedures) of withdrawal delivered by the Holder to a Paying Agent at any time
prior to the close of business on the Business Day immediately preceding the
Change in Control Purchase Date, specifying the principal amount of the Security
or portion thereof (which must be a principal amount of $1,000 or an integral
multiple of $1,000 in excess thereof) with respect to which such notice of
withdrawal is being submitted.
SECTION 3.11. Deposit of Change in Control Purchase Price.
-------------------------------------------
Prior to any Change in Control Purchase 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 6.03) an amount
of money sufficient to pay the Change in Control Purchase Price of all the
Securities or portions thereof which are to be purchased on that date. The
manner in which the deposit required by this Section 3.11 is made by the Company
shall be at the option of the Company, provided that such deposit shall be made
--------
in a manner such that the Trustee or a Paying Agent shall have immediately
available funds on the Change in Control Purchase Date.
If a Paying Agent holds, in accordance with the terms hereof, money
sufficient to pay the Change in Control Purchase Price of any Security for which
a Change in Control Purchase Notice has been tendered and not withdrawn in
accordance with this Indenture then, on the Change in Control Purchase Date,
such Security will cease to be outstanding and the rights of the Holder in
respect thereof shall terminate (other than the right to receive the Change in
Control Purchase Price as aforesaid). The Company shall publicly announce the
principal amount of Securities purchased as a result of such Change in Control
on or as soon as practicable after the Change in Control Purchase Date.
SECTION 3.12. Securities Purchased in Part.
----------------------------
Any Security which is to be purchased only in part shall be surrendered
to a Paying Agent (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 denominations 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. If a Global
Security is so surrendered, such new Security so issued shall be a new Global
Security in a denomination equal to the unredeemed portion of the principal of
the Global Security so surrendered.
SECTION 3.13. Compliance with Securities Laws upon Purchase of
------------------------------------------------
Securities.
----------
In connection with any offer to purchase or purchase of Securities
under Section 3.09, the Company shall (a) comply with Rule 13e-4 and Rule 14e-1
(or any successor to either such Rule), if applicable, under the Exchange Act,
(b) file the related Schedule TO (or any successor or similar schedule, form or
report) if required under the Exchange Act, and (c) otherwise comply with all
federal and state securities laws in connection with such offer to
33
purchase or purchase of Securities, all so as to permit the rights of the
Holders and obligations of the Company under Sections 3.09 through 3.12 to be
exercised in the time and in the manner specified therein.
ARTICLE FOUR
CONVERSION
SECTION 4.01. Conversion Privilege.
--------------------
Subject to the further provisions of this Section 4.01, a Holder of a
Security may convert the principal amount of such Security (or any portion
thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof)
into Common Stock at any time prior to the close of business on the Final
Maturity Date, at the Conversion Price then in effect; provided, however, that,
-------- -------
if such Security is called for redemption or submitted or presented for purchase
pursuant to Article 3, such conversion right shall terminate at the close of
business on the Business Day immediately preceding the Redemption Date or Change
in Control Purchase Date, as the case may be, for such Security or such earlier
date as the Holder presents such Security for redemption or for purchase (unless
the Company shall Default in making the redemption payment or Change in Control
Purchase Price payment when due, in which case the conversion right shall
terminate at the close of business on the date such Default is cured and such
Security is redeemed or purchased, as the case may be). The number of shares of
Common Stock issuable upon conversion of a Security shall be determined by
dividing the principal amount of the Security or portion thereof surrendered for
conversion by the Conversion Price in effect on the Conversion Date. The initial
Conversion Price is set forth in paragraph 8 of the Securities and is subject to
adjustment as provided in this Article 4.
Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.
A Security in respect of which a Holder has delivered a Change in
Control Purchase Notice pursuant to Section 3.09(c) exercising the option of
such Holder to require the Company to purchase such Security may be converted
only if such Change in Control Purchase Notice is withdrawn by a written notice
of withdrawal delivered to a Paying Agent prior to the close of business on the
Business Day immediately preceding the Change in Control Purchase Date in
accordance with Section 3.10.
A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted its Securities to Common Stock, and
only to the extent such Securities are deemed to have been converted into Common
Stock pursuant to this Article 4.
SECTION 4.02. Conversion Procedure.
--------------------
To convert a Security, a Holder must (a) complete and manually sign the
conversion notice on the back of the Security and deliver such notice to a
Conversion Agent, (b) surrender the Security to a Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by a Securities
Registrar or a Conversion Agent, and (d) pay any transfer or similar tax, if
required. The date on which the Holder satisfies all of those requirements is
the
34
"Conversion Date." As soon as practicable after the Conversion Date, the Company
---------------
shall deliver to the Holder through a Conversion Agent a certificate for the
number of whole shares of Common Stock issuable upon the conversion and cash in
lieu of any fractional shares pursuant to Section 4.04. Anything herein to the
contrary notwithstanding, in the case of Global Securities, conversion notices
may be delivered and such Securities may be surrendered for conversion in
accordance with the Applicable Procedures as in effect from time to time.
The person in whose name the Common Stock certificate is registered
shall be deemed to be a stockholder of record on the Conversion Date; provided,
--------
however, that no surrender of a Security on any date when the stock transfer
-------
books of the Company shall be closed shall be effective to constitute the person
or persons entitled to receive the shares of Common Stock upon such conversion
as the record holder or holders of such shares of Common Stock on such date, but
such surrender shall be effective to constitute the person or persons entitled
to receive such shares of Common Stock as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open; provided, further, that such conversion
-------- -------
shall be at the Conversion Price in effect on the Conversion Date as if the
stock transfer books of the Company had not been closed. Upon conversion of a
Security, such person shall no longer be a Holder of such Security. No payment
or adjustment will be made for dividends or distributions on shares of Common
Stock issued upon conversion of a Security.
Securities so surrendered for conversion (in whole or in part) during
the period from the close of business on any Regular Record Date to the opening
of business on the next succeeding Interest Payment Date (excluding Securities
or portions thereof called for redemption or presented for purchase upon a
Change in Control on a Redemption Date or Change in Control Purchase Date, as
the case may be, during the period beginning at the close of business on a
Regular Record Date and ending at the opening of business on the first Business
Day after the next succeeding Interest Payment Date, or if such Interest Payment
Date is not a Business Day, the second such Business Day) shall also be
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
such Security then being converted, and such interest shall be payable to such
registered Holder notwithstanding the conversion of such Security, subject to
the provisions of this Indenture relating to the payment of defaulted interest
by the Company. Except as otherwise provided in this Section 4.02, no payment or
adjustment will be made for accrued interest on a converted Security. If the
Company defaults in the payment of interest payable on such Interest Payment
Date, the Company shall promptly repay such funds to such Holder.
Nothing in this Section shall affect the right of a Holder in whose
name any Security is registered at the close of business on a record date to
receive the interest payable on such Security on the related Interest Payment
Date in accordance with the terms of this Indenture and the Securities. If a
Holder converts more than one Security at the same time, the number of shares of
Common Stock issuable upon the conversion shall be based on the aggregate
principal amount of Securities converted.
35
SECTION 4.03. Securities Converted in Part.
----------------------------
Any Security which is to be converted only in part shall be surrendered
to a Conversion Agent as required and in accordance with Section 4.03, 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 denominations as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unconverted portion of the principal of
the Security so surrendered. If a Global Security is so surrendered, such new
Security so issued shall be a new Global Security in a denomination equal to the
unconverted portion of the principal of the Global Security so surrendered.
SECTION 4.04. Fractional Shares.
-----------------
The Company will not issue fractional shares of Common Stock upon
conversion of Securities. In lieu thereof, the Company will pay an amount in
cash based upon the Closing Price of the Common Stock on the Trading Day
immediately prior to the Conversion Date.
SECTION 4.05. Taxes on Conversion.
-------------------
If a Holder converts a Security, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Common
Stock upon such conversion. However, the Holder shall pay any such tax which is
due because the Holder requests the shares to be issued in a name other than the
Holder's name. The Conversion Agent may refuse to deliver the certificate
representing the Common Stock being issued in a name other than the Holder's
name until the Conversion Agent receives a sum sufficient to pay any tax which
will be due because the shares are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any tax withholding required by law
or regulation.
SECTION 4.06. Company to Provide Stock.
------------------------
The Company shall, prior to issuance of any Securities hereunder, and
from time to time as may be necessary, reserve, out of its authorized but
unissued Common Stock, a sufficient number of shares of Common Stock to permit
the conversion of all outstanding Securities into shares of Common Stock.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares, shall be duly authorized, validly issued, fully
paid and nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or on the Nasdaq
National Market or other over-the-counter market or such other market on which
the Common Stock is then listed or quoted.
Any shares of Common Stock issued upon conversion of any Securities
which at the time of such conversion were Transfer Restricted Securities, shall
also be, and bear the
36
Legend required for, Transfer Restricted Securities as, and to the same extent,
required for Securities pursuant to Section 2.12(d).
SECTION 4.07. Adjustment of Conversion Price.
------------------------------
The conversion price as stated in paragraph 8 of the Securities (the
"Conversion Price") shall be adjusted from time to time by the Company as
----------------
follows:
(a) In case the Company shall (i) pay a dividend on its Common Stock
in shares of Common Stock, (ii) make a distribution on its Common Stock in
shares of Common Stock, (iii) subdivide its outstanding Common Stock into a
greater number of shares, or (iv) combine its outstanding Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive that number of shares of
Common Stock which it would have owned had such Security been converted
immediately prior to the happening of such event. An adjustment made pursuant to
this subsection (a) shall become effective immediately after the record date in
the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of subdivision or combination.
(b) In case the Company shall issue rights or warrants to all or
substantially all holders of its Common Stock entitling them (for a period
commencing no earlier than the record date described below and expiring not more
than 60 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
(or having a conversion price per share) less than the Current Market Price Per
Share of Common Stock on the record date for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to such record date by a fraction of which (x) the numerator shall be the number
of shares of Common Stock outstanding on such record date plus the number of
shares which the aggregate offering price of the total number of shares of
Common Stock so offered (or the aggregate conversion price of the convertible
securities so offered, which shall be determined by multiplying the number of
shares of Common Stock issuable upon conversion of such convertible securities
by the conversion price per share of Common Stock pursuant to the terms of such
convertible securities) would purchase at the Current Market Price Per Share of
Common Stock on such record date, and of which (y) the denominator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock offered (or into which the convertible
securities so offered are convertible). Such adjustment shall be made
successively whenever any such rights or warrants are issued, and shall become
effective immediately after such record date. If at the end of the period during
which such rights or warrants are exercisable not all rights or warrants shall
have been exercised, the adjusted Conversion Price shall be immediately
readjusted to what it would have been based upon the number of additional shares
of Common Stock actually issued (or the number of shares of Common Stock
issuable upon conversion of convertible securities actually issued).
(c) In case the Company shall distribute to all or substantially all
holders of its Common Stock any shares of capital stock of the Company (other
than Common Stock),
37
evidences of indebtedness or other non-cash assets (including securities of any
person other than the Company but excluding (1) dividends or distributions paid
exclusively in cash or (2) dividends or distributions referred to in subsection
(a) of this Section 4.07), or shall distribute to all or substantially all
holders of its Common Stock rights or warrants to subscribe for or purchase any
of its securities (excluding those rights and warrants referred to in subsection
(b) of this Section 4.07), then in each such case the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
current Conversion Price by a fraction of which the numerator shall be the
Current Market Price Per Share of the Common Stock on the record date mentioned
below less the fair market value on such record date (as reasonably determined
in good faith by the Board of Directors, whose determination shall be conclusive
evidence of such fair market value and which shall be evidenced by an Officers'
Certificate delivered to the Trustee) of the portion of the capital stock,
evidences of indebtedness or other non-cash assets so distributed or of such
rights or warrants applicable to one share of Common Stock (determined on the
basis of the number of shares of Common Stock outstanding on the record date),
and of which the denominator shall be the Current Market Price Per Share of the
Common Stock on such record date. Such adjustment shall be made successively
whenever any such distribution is made and shall become effective immediately
after the record date for the determination of shareholders entitled to receive
such distribution.
(d) In case the Company shall, by dividend or otherwise, at any time
distribute (a "Triggering Distribution") to all or substantially all holders of
-----------------------
its Common Stock cash in an aggregate amount that, together with the aggregate
amount of (A) any cash and the fair market value (as reasonably determined in
good faith by the Board of Directors, whose determination shall be conclusive
evidence thereof and which shall be evidenced by an Officers' Certificate
delivered to the Trustee) of any other consideration payable in respect of any
tender offer by the Company or a Subsidiary of the Company for Common Stock
consummated within the 12 months preceding the date of payment of the Triggering
Distribution and in respect of which no Conversion Price adjustment pursuant to
this Section 4.07 has been made and (B) all other cash distributions to all or
substantially all holders of its Common Stock made within the 12 months
preceding the date of payment of the Triggering Distribution and in respect of
which no Conversion Price adjustment pursuant to this Section 4.07 has been
made, exceeds an amount equal to 10.0% of the product of the Current Market
Price Per Share of Common Stock on the Business Day (the "Determination Date")
------------------
immediately preceding the day on which such Triggering Distribution is declared
by the Company multiplied by the number of shares of Common Stock outstanding on
the Determination Date (excluding shares held in the treasury of the Company),
the Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying such Conversion Price in effect immediately prior to
the Determination Date by a fraction of which the numerator shall be the Current
Market Price Per Share of the Common Stock on the Determination Date less the
sum of the aggregate amount of cash and the aggregate fair market value (as
reasonably determined in good faith by the Board of Directors, whose
determination shall be conclusive evidence of such fair market value and which
shall be evidenced by an Officers' Certificate delivered to the Trustee) of any
such other consideration so distributed, paid or payable within such 12 months
(including, without limitation, the Triggering Distribution) applicable to one
share of Common Stock (determined on the basis of the number of shares of Common
Stock outstanding on the Determination Date) and the denominator shall be such
Current Market Price Per Share of the Common Stock on the
38
Determination Date, such reduction to become effective immediately prior to the
opening of business on the day following the date on which the Triggering
Distribution is paid.
(e) (1) In case any tender offer made by the Company or any of its
Subsidiaries for Common Stock shall expire and such tender offer (as amended
upon the expiration thereof) shall involve the payment of aggregate
consideration in an amount (determined as the sum of the aggregate amount of
cash consideration and the aggregate fair market value (as reasonably determined
in good faith by the Board of Directors, whose determination shall be conclusive
evidence thereof and which shall be evidenced by an Officers' Certificate
delivered to the Trustee thereof) of any other consideration) that, together
with the aggregate amount of (A) any cash and the fair market value (as
reasonably determined in good faith by the Board of Directors, whose
determination shall be conclusive evidence thereof and which shall be evidenced
by an Officers' Certificate delivered to the Trustee) of any other consideration
payable in respect of any other tender offers by the Company or any Subsidiary
of the Company for Common Stock consummated within the 12 months preceding the
date of the Expiration Date (as defined below) and in respect of which no
Conversion Price adjustment pursuant to this Section 4.07 has been made and (B)
all cash distributions to all or substantially all holders of its Common Stock
made within the 12 months preceding the Expiration Date and in respect of which
no Conversion Price adjustment pursuant to this Section 4.07 has been made,
exceeds an amount equal to 10.0% of the product of the Current Market Price Per
Share of Common Stock as of the last date (the "Expiration Date") tenders could
---------------
have been made pursuant to such tender offer (as it may be amended) (the last
time at which such tenders could have been made on the Expiration Date is
hereinafter sometimes called the "Expiration Time") multiplied by the number of
---------------
shares of Common Stock outstanding (including tendered shares but excluding any
shares held in the treasury of the Company) at the Expiration Time, then,
immediately prior to the opening of business on the day after the Expiration
Date, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to close of business on the Expiration Date by a fraction of which the numerator
shall be the product of the number of shares of Common Stock outstanding
(including tendered shares but excluding any shares held in the treasury of the
Company) at the Expiration Time multiplied by the Current Market Price Per Share
of the Common Stock on the Trading Day next succeeding the Expiration Date and
the denominator shall be the sum of (x) the aggregate consideration (determined
as aforesaid) payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
----------------
product of the number of shares of Common Stock outstanding (less any Purchased
Shares and excluding any shares held in the treasury of the Company) at the
Expiration Time and the Current Market Price Per Share of Common Stock on the
Trading Day next succeeding the Expiration Date, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Date. In the event that the Company is obligated to purchase shares
pursuant to any such tender offer, but the Company is permanently prevented by
applicable law from effecting any or all such purchases or any or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would have been in effect based upon the number of shares
actually purchased. If the application of this Section 4.07(e) to any tender
offer would result in an increase in the Conversion Price, no adjustment shall
be made for such tender offer under this Section 4.07(e).
39
(2) For purposes of Section 4.07(d) and 4.07(e), the term "tender
offer" shall mean and include both tender offers and exchange offers (within the
meaning of U.S. Federal securities laws), all references to "purchases" of
shares in tender offers (and all similar references) shall mean and include both
the purchase of shares in tender offers and the acquisition of shares pursuant
to exchange offers, and all references to "tendered shares" (and all similar
references) shall mean and include shares tendered in both tender offers and
exchange offers.
(f) For the purpose of any computation under subsections (b), (c),
(d) and (e) of this Section 4.07, the current market price per share of Common
Stock (the "Current Market Price Per Share") on any date shall be deemed to be
------------------------------
the average of the daily Closing Prices for the 30 consecutive Trading Days
commencing 45 Trading Days before (i) the Determination Date or the Expiration
Date, as the case may be, with respect to distributions or tender offers under
subsection (e) of this Section 4.07 or (ii) the record date with respect to
distributions, issuances or other events requiring such computation under
subsection (b), (c) or (d) of this Section 4.07. The Closing Price for each day
(the "Closing Price") shall be the last reported sales price or, in case no such
-------------
reported sale takes place on such date, the average of the reported closing bid
and asked prices in either case on the New York Stock Exchange (the "NYSE") or
----
the Nasdaq National Market (the "NNM"), as applicable, or, if the Common Stock
---
is not listed or admitted to trading on the NYSE or the NNM, the principal
national securities exchange or quotation system on which the Common Stock is
quoted or listed or admitted to trading or, if not quoted or listed or admitted
to trading on any national securities exchange or quotation system, the closing
sales price or, in case no reported sale takes place, the average of the closing
bid and asked prices, as furnished by any two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If no such prices are available, the Current Market
Price Per Share shall be the fair value of a share of Common Stock as reasonably
determined in good faith by the Board of Directors (which shall be evidenced by
an Officers' Certificate delivered to the Trustee).
(g) In any case in which this Section 4.07 shall require that an
adjustment be made following a record date or a Determination Date or Expiration
Date, as the case may be, established for purposes of this Section 4.07, the
Company may elect to defer (but only until five Business Days following the
filing by the Company with the Trustee of the certificate described in Section
4.10) issuing to the Holder of any Security converted after such record date or
Determination Date or Expiration Date the shares of Common Stock and other
capital stock of the Company issuable upon such conversion over and above the
shares of Common Stock and other capital stock of the Company issuable upon such
conversion only on the basis of the Conversion Price prior to adjustment; and,
in lieu of the shares the issuance of which is so deferred, the Company shall
issue or cause its transfer agents to issue due bills or other appropriate
evidence prepared by the Company of the right to receive such shares. If any
distribution in respect of which an adjustment to the Conversion Price is
required to be made as of the record date or Determination Date or Expiration
Date therefor is not thereafter made or paid by the Company for any reason, the
Conversion Price shall be readjusted to the Conversion Price which would then be
in effect if such record date had not been fixed or such effective date or
Determination Date or Expiration Date had not occurred.
40
SECTION 4.08. No Adjustment.
-------------
No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
-------- -------
by reason of this Section 4.08 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 4 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
No adjustment need be made for issuances of Common Stock pursuant to a
Company plan for reinvestment of dividends or interest or for a change in the
par value or a change to no par value of the Common Stock.
To the extent that the Securities become convertible into the right to
receive cash, no adjustment need be made thereafter as to the cash. Interest
will not accrue on the cash.
SECTION 4.09. Adjustment for Tax Purposes.
---------------------------
The Company shall be entitled to make such reductions in the
Conversion Price, in addition to those required by Section 4.07, as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivisions of shares, distributions of rights to purchase stock or securities
or distributions of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
SECTION 4.10. Notice of Adjustment.
--------------------
Whenever the Conversion Price or conversion privilege is adjusted, the
Company shall promptly mail to Securityholders a notice of the adjustment and
file with the Trustee an Officers' Certificate briefly stating the facts
requiring the adjustment and the manner of computing it. Unless and until the
Trustee shall receive an Officers' Certificate setting forth an adjustment of
the Conversion Price, the Trustee may assume without inquiry that the Conversion
Price has not been adjusted and that the last Conversion Price of which it has
knowledge remains in effect.
SECTION 4.11. Notice of Certain Transactions.
------------------------------
In the event that:
(1) the Company takes any action which would require an adjustment in
the Conversion Price;
(2) the Company consolidates or merges with, or transfers all or
substantially all of its property and assets to, another corporation and
shareholders of the Company must approve the transaction; or
(3) there is a dissolution or liquidation of the Company,
41
the Company shall mail to Holders and file with the Trustee a notice stating the
proposed record or effective date, as the case may be. The Company shall mail
the notice at least ten days before such date. Failure to mail such notice or
any defect therein shall not affect the validity of any transaction referred to
in clause (1), (2) or (3) of this Section 4.11.
SECTION 4.12. Effect of Reclassification, Consolidation, Merger or
----------------------------------------------------
Sale on Conversion Privilege.
----------------------------
If any of the following shall occur, namely: (a) any reclassification
or change of shares of Common Stock issuable upon conversion of the Securities
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination, or any
other change for which an adjustment is provided in Section 4.07); (b) any
consolidation or merger or combination to which the Company is a party other
than a merger in which the Company is the continuing corporation and which does
not result in any reclassification of, or change (other than in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination) in, outstanding shares of Common Stock;
or (c) any sale or conveyance as an entirety or substantially as an entirety of
the property and assets of the Company, directly or indirectly, to any person,
then the Company, or such successor, purchasing or transferee corporation, as
the case may be, shall, as a condition precedent to such reclassification,
change, combination, consolidation, merger, sale or conveyance, execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then outstanding shall have the right to convert such Security
into the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, change, combination,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock deliverable upon conversion of such Security immediately prior to
such reclassification, change, combination, consolidation, merger, sale or
conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article 4. If, in
the case of any such consolidation, merger, combination, sale or conveyance, the
stock or other securities and property (including cash) receivable thereupon by
a holder of Common Stock include shares of stock or other securities and
property of a person other than the successor, purchasing or transferee
corporation, as the case may be, in such consolidation, merger, combination,
sale or conveyance, then such supplemental indenture shall also be executed by
such other person and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing. The provisions of this
Section 4.12 shall similarly apply to successive reclassifications, changes,
combinations, consolidations, mergers, sales or conveyances.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 4.12, the Company shall promptly file with the Trustee
(x) an Officers' Certificate briefly stating the reasons therefor, the kind or
amount of shares of stock or other securities or property (including cash)
receivable by Holders of the Securities upon the conversion of their Securities
after any such reclassification, change, combination, consolidation, merger,
sale or conveyance, any adjustment to be made with respect thereto and that all
conditions precedent have been complied with and (y) an Opinion of Counsel that
all conditions precedent have been complied with, and shall promptly mail notice
thereof to all Holders.
42
SECTION 4.13. Trustee's Disclaimer.
--------------------
The Trustee shall have no duty to determine when an adjustment under
this Article 4 should be made, how it should be made or what such adjustment
should be, but may accept as conclusive evidence of that fact or the correctness
of any such adjustment, and shall be protected in relying upon, an Officers'
Certificate including the Officers' Certificate with respect thereto which the
Company is obligated to file with the Trustee pursuant to Section 4.10. The
Trustee makes no representation as to the validity or value of any securities or
assets issued upon conversion of Securities, and the Trustee shall not be
responsible for the Company's failure to comply with any provisions of this
Article 4.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 4.12, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 4.12.
SECTION 4.14. Voluntary Reduction.
-------------------
The Company from time to time may reduce the Conversion Price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period if the Board of Directors determines
that such reduction would be in the best interest of the Company and the Company
provides 15 days prior notice of any reduction in the Conversion Price;
provided, however, that in no event may the Company reduce the Conversion Price
-------- -------
to be less than the par value of a share of Common Stock.
ARTICLE FIVE
SUBORDINATION
SECTION 5.01. Agreement of Subordination.
--------------------------
The Company covenants and agrees, and each Holder of Securities issued
hereunder by its acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of this Article 5; and each
Person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees to be bound by such
provisions.
The payment of the principal of (and premium, if any) and interest
(including Additional Interest, if any) on all Securities (including, but not
limited to, the Redemption Price with respect to the Securities called for
redemption or the Change in Control Purchase Price with respect to the
Securities subject to purchase in accordance with Article 3 as provided in this
Indenture) issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full in cash or payment satisfactory to the holders of Senior Indebtedness of
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred.
43
No provision of this Article 5 shall prevent the occurrence of any
Default or Event of Default hereunder.
SECTION 5.02. Payments to Holders.
-------------------
No payment shall be made with respect to the principal of (and
premium, if any) or interest (including Additional Interest, if any) on the
Securities (including, but not limited to, the Redemption Price with respect to
the Securities to be called for redemption or the Change in Control Purchase
Price with respect to the Securities subject to purchase in accordance with
Article 3 as provided in this Indenture), except payments and distributions made
by the Trustee as permitted by the first or second paragraph of Section 5.05,
if:
(i) a default in the payment of principal, premium, interest, rent or
other obligations due on any Senior Indebtedness occurs and is continuing,
unless and until such default shall have been cured or waived or shall have
ceased to exist; or
(ii) a default, other than a payment default, on any Senior
Indebtedness occurs and is continuing that then permits holders of such
Senior Indebtedness to accelerate its maturity and the Trustee receives a
notice of the default (a "Payment Blockage Notice") from a Representative
-----------------------
or holder of Senior Indebtedness.
Subject to the provisions of Section 5.05, if the Trustee receives any
Payment Blockage Notice pursuant to clause (ii) above, no subsequent Payment
Blockage Notice shall be effective for purposes of this Section unless and until
at least 365 days shall have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice. No nonpayment default that existed or
was continuing on the date of delivery of any Payment Blockage Notice to the
Trustee (unless such default was waived, cured or otherwise ceased to exist and
thereafter subsequently reoccurred) shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Company shall resume payments on and distributions in respect of
the Securities upon the earlier of:
(a) the date upon which the default is cured or waived or ceases to
exist, or
(b) in the case of a default referred to in clause (ii) above, 179
days pass after a Payment Blockage Notice is received, unless this Article
5 otherwise prohibits the payment or distribution at the time of such
payment or distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution, winding-up, total or partial liquidation or
reorganization of the Company (whether voluntary or involuntary) or in
bankruptcy, insolvency, receivership or similar proceedings, all amounts due or
to become due upon all Senior Indebtedness shall first be paid in full in cash,
or other payments satisfactory to the holders of Senior Indebtedness, before any
payment is made on account of the principal of (and premium, if any) or interest
(including Additional Interest, if any) on the Securities (except payments made
pursuant to Article 13 from monies deposited with the Trustee pursuant thereto
prior to commencement of proceedings for such dissolution,
44
winding-up, liquidation or reorganization); and upon any such dissolution or
winding-up or liquidation or reorganization of the Company or bankruptcy,
insolvency, receivership or other proceeding, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Securities or the Trustee
would be entitled, except for the provision of this Article 5, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders of the Securities or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, or as otherwise required by law or a court order) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full in cash, or other payment
satisfactory to the holders of Senior Indebtedness, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness,
before any payment or distribution is made to the Holders of the Securities or
to the Trustee.
For purposes of this Article 5, the words, "cash, property or
-----------------
securities" shall not be deemed to include shares of stock of the Company as
----------
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article 5 with respect
to the Securities to the payment of all Senior Indebtedness which may at the
time be outstanding; provided that (i) the Senior Indebtedness is assumed by the
--------
new corporation, if any, resulting from any reorganization or readjustment, and
(ii) the rights of the holders of Senior Indebtedness (other than leases which
are not assumed by the Company or the new corporation, as the case may be) are
not, without the consent of such Holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article 12 shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 5.02
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article 12.
In the event of the acceleration of the Securities because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
Holder of Securities in respect of the principal of (and premium, if any) or
interest (including Additional Interest, if any) on the Securities (including,
but not limited to, the Redemption Price with respect to the Securities called
for redemption or the Change in Control Purchase Price with respect to the
Securities subject to purchase in accordance with Article 3 as provided in this
Indenture), except payments and distributions made by the Trustee as permitted
by the first or second paragraph of Section 5.05, until all Senior Indebtedness
has been paid in full in cash or other payment satisfactory to the holders of
Senior Indebtedness or such acceleration is rescinded in accordance with the
terms of this Indenture.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or
45
securities (including, without limitation, by way of setoff or otherwise),
prohibited by the foregoing, shall be received by the Trustee or the Holders of
the Securities before all Senior Indebtedness is paid in full, in cash or other
payment satisfactory to the holders of Senior Indebtedness, or provision is made
for such payment thereof in accordance with its terms in cash or other payment
satisfactory to the holders of Senior Indebtedness, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of Senior Indebtedness or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Company, for application
to the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full, in cash or other payment
satisfactory to the holders of Senior Indebtedness, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
Nothing in this Section 5.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 9.07. This Section 5.02 shall be
subject to the further provisions of Section 5.05.
SECTION 5.03. Subrogation of Securities.
-------------------------
Subject to the payment in full, in cash or other payment satisfactory
to the holders of Senior Indebtedness, of all Senior Indebtedness, the rights of
the Holders of the Securities shall be subrogated to the extent of the payments
or distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article 5 (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to other
indebtedness of the Company to substantially the same extent as the Securities
are subordinated and is entitled to like rights of subrogation) to the rights of
the holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the principal (and premium, if any) and interest (including Additional
Interest, if any) on the Securities shall be paid in full in cash or other
payment satisfactory to the holders of Senior Indebtedness; and, for the
purposes of such subrogation, no payments or distributions to the holders of the
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article 5, and no payment over pursuant to the provisions of this Article
5, to or for the benefit of the holders of Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the Holders of the Securities, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness; and no payments or distributions of cash, property or securities
to or for the benefit of the Holders of the Securities pursuant to the
subrogation provisions of this Article 5, which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Securities. It is understood that the
provisions of this Article 5 are and are intended solely for the purposes of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article 5 or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as among the Company, its
creditors other than the
46
holders of Senior Indebtedness, and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of (and premium, if any) and interest on
the Securities as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of the Company other than the holders of
the Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon Default under this Indenture, subject to the
rights, if any, under this Article 5 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article 5, the Trustee, subject to the provisions of Section 9.01, and
the Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article 5.
SECTION 5.04. Authorization to Effect Subordination.
-------------------------------------
Each Holder of a Security by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article 5 and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 5.03 hereof at least 30 days before the expiration of the time to file
such claim, the holders of any Senior Indebtedness or their representatives are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of the Securities.
SECTION 5.05. Notice to Trustee.
-----------------
The Company shall give prompt written notice in the form of an
Officers' Certificate to a Responsible Officer of the Trustee and to any Paying
Agent of any fact known to the Company which would prohibit the making of any
payment of monies to or by the Trustee or any Paying Agent in respect of the
Securities pursuant to the provisions of this Article 5. Notwithstanding the
provisions of this Article 5 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Securities pursuant to the provisions of this Article 5, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof at the Corporate Trust Office from the Company (in the form of an
Officers' Certificate) or a Representative or a holder or holders of Senior
Indebtedness; and before the receipt of any such written notice, the Trustee,
subject to the provisions of Section 9.01, shall be entitled in all respects to
assume that no such facts exist; provided that if on a date not fewer than one
--------
Business Day prior to the date upon which by the terms hereof any such
47
monies may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any Security)
the Trustee shall not have received, with respect to such monies, the notice
provided for in this Section 5.05, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date. Notwithstanding anything in this
Article 5 to the contrary, nothing shall prevent any payment by the Trustee to
the Holders of monies deposited with it pursuant to Article 13, and any such
payment shall not be subject to the provisions of Article 5.
The Trustee, subject to the provisions of Section 9.01, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness to
establish that such notice has been given by a Representative or a holder of
Senior Indebtedness. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 5, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article 5, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 5.06. Trustee's Relation to Senior Indebtedness.
-----------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 5 in respect of any Senior Indebtedness at any
time held by it, to the same extent as any other holder of Senior Indebtedness,
and nothing in Section 9.13 or elsewhere in this Indenture shall deprive the
Trustee of any of its rights as such holder. With respect to the holders of
Senior Indebtedness, the Trustee undertakes to perform or to observe only such
of its covenants and obligations as are specifically set forth in this Article
5, and no implied covenants or obligations with respect to the holders of Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and, subject to the provisions of Section 9.01, the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall pay over or
deliver to Holders of Securities, the Company or any other person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue of
this Article 5 or otherwise.
SECTION 5.07. No Impairment of Subordination.
------------------------------
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
48
SECTION 5.08. Certain Conversions Deemed Payment.
----------------------------------
For the purposes of this Article 5 only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article 4
shall not be deemed to constitute a payment or distribution on account of the
principal of (or premium, if any) or interest on Securities or on account of the
purchase or other acquisition of Securities, and (2) the payment, issuance or
delivery of cash (except in satisfaction of fractional shares pursuant to
Section 4.04), property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section 5.08, the term
"junior securities" means (a) shares of any stock of any class of the Company,
-----------------
or (b) securities of the Company which are subordinated in right of payment to
all Senior Indebtedness which may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a greater
extent than, the Securities are so subordinated as provided in this Article.
Nothing contained in this Article 5 or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Indebtedness and the Holders, the right, which is
absolute and unconditional, of the Holder of any Security to convert such
Security in accordance with Article 4.
SECTION 5.09. Article Applicable to Paying Agents.
-----------------------------------
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall (unless the context otherwise requires) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that the first
-------- -------
paragraph of Section 5.05 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
SECTION 5.10. Notice to Senior Indebtedness.
-----------------------------
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify the holders of Senior Indebtedness of
the acceleration (although the failure to give any such notice shall not affect
the subordination provisions of this Article 5).
SECTION 5.11. Senior Indebtedness Entitled to Rely.
------------------------------------
The holders of Senior Indebtedness shall have the right to rely upon
this Article 5, and no amendment or modification of the provisions contained
herein shall diminish the rights of any such holder except in accordance with
Section 11.04.
49
ARTICLE SIX
COVENANTS
SECTION 6.01. Payment of Principal, Premium and Interest.
------------------------------------------
The Company will duly and punctually pay the principal of (and
premium, if any) and interest, if any, on the Securities in accordance with the
terms of the Securities and this Indenture.
SECTION 6.02. Maintenance of Agency.
---------------------
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or surrendered for
payment (each, a "Paying Agent"), where Securities may be surrendered for
------------
registration of transfer or exchange (each, a "Securities Registrar") or for
--------------------
conversion (each, a "Conversion Agent"), 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
of 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 during the continuance of such failure on the Company's part, 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 where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. 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.
The Company hereby initially designates the Trustee as Paying Agent,
Securities Registrar, Securities Custodian and Conversion Agent.
SECTION 6.03. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
(a) The Company agrees
(1) if the Company shall at any time act as its own Paying Agent with
respect to any Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on the Securities, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal (and premium, if any) 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; and
(2) whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of (and premium, if any) or
interest on any Securities, deposit with a Paying Agent a sum sufficient to
pay the principal (and
50
premium, if any) or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal,
premium or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so
to act.
(b) 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
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest, if any, on any Securities in trust
for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company in the
making of any payment of principal (and premium, if any) or interest
on the Securities; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent for payment in respect of
the Securities.
(c) 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 a 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.
(d) Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company, 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; provided, however, that the Trustee or such Paying Agent, before being
-------- -------
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in the Borough of Manhattan, The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 6.04. 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 it or upon its income, profits
or property, and (2) all lawful claims for labor,
51
materials and supplies which, if unpaid, might by law become a lien upon its
property; 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 6.05. Maintenance of Properties.
-------------------------
The Company will cause all its properties used or useful in the
conduct of its business 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 and maintenance of any of
its properties no longer deemed useful in the conduct of the business of the
Company.
SECTION 6.06. Statement as to Compliance.
--------------------------
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company, an Officers' Certificate stating, as
to each signer thereof (one of which must be the principal executive, financial
or accounting officer of the Company), that
(1) a review of the activities of the Company during such year
and of its performance under this Indenture has been made under his or
her supervision, and
(2) to the best of his or her knowledge, based on such review,
the Company has fulfilled all its obligations under this Indenture
throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to him or her and the nature and status thereof.
SECTION 6.07. Corporate Existence.
-------------------
Subject to Article 12, the Company will do, or cause to be done,
all things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 6.08. SEC Reports.
-----------
The Company shall file all reports and other information and
documents which it is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act, and within 15 days after it files them with the SEC,
the Company shall file copies of all such reports, information and other
documents with the Trustee.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
52
SECTION 6.09. Rule 144A Information Requirement.
---------------------------------
Within the period prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), the Company covenants and agrees that it shall, during any
period in which it is not subject to Section 13 or 15(d) under the Exchange Act,
make available to any Holder or beneficial holder of Securities or any Common
Stock issued upon conversion thereof which continue to be Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
Securities or such Common Stock designated by such Holder or beneficial holder,
the information required pursuant to Rule 144A(d)(4) under the Securities Act
upon the request of any Holder or beneficial holder of the Securities or such
Common Stock and it will take such further action as any Holder or beneficial
holder of such Securities or such Common Stock may reasonably request, all to
the extent required from time to time to enable such Holder or beneficial holder
to sell its Securities or Common Stock without registration under the Securities
Act within the limitation of the exemption provided by Rule 144A, as such Rule
may be amended from time to time. Upon the request of any Holder or any
beneficial holder of the Securities or such Common Stock, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements, unless such a statement has been included in the Company's
most recent report required to be filed pursuant to Section 13 or 15(d) under
the Exchange Act.
SECTION 6.10. Payment of Additional Interest.
------------------------------
If Additional Interest is payable by the Company pursuant to the
Registration Rights Agreement, the Company shall deliver to the Trustee a
certificate to that effect stating (i) the amount of such Additional Interest
that is payable and (ii) the date on which such Additional Interest is payable.
Unless and until a Responsible Officer of the Trustee receives such a
certificate, the Trustee may assume without inquiry that no such Additional
Interest is payable. If the Company has paid Additional Interest directly to the
Persons entitled to it, the Company shall deliver to the Trustee a certificate
setting forth the particulars of such payment.
SECTION 6.11. Waiver of Covenants.
-------------------
The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 6.04 and 6.05, with respect to
the Securities, if before or after the time for such compliance the Holders of a
majority in Principal Amount of the Securities at the time Outstanding shall
either waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect such
covenant 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 covenant or condition shall remain in full
force and effect.
53
ARTICLE SEVEN
SECURITYHOLDERS LISTS AND REPORTS
BY TRUSTEE AND COMPANY
SECTION 7.01. Company to Furnish Trustee Name and Addresses of
------------------------------------------------
Securityholders.
---------------
The Company will furnish or cause to be furnished to the Trustee,
semiannually, not more than 15 days after each June 15 and December 15 in each
year beginning after the first issue of Securities under this Indenture, and at
such other times as the Trustee may request in writing, within 30 days after
receipt by the Company of any such request, a list in such form as the Trustee
may reasonably require of the names and addresses of the Holders of Securities
as of a date not more than 15 days prior to the time such information is
furnished; provided, however, that in case and so long as the Trustee is the
-------- -------
Securities Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
----------------------------------------------
Securityholders.
---------------
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 and the names and addresses of Holders of Securities received by
the Trustee in its capacity as Securities Registrar, if so acting. The Trustee
may destroy any list furnished to it as provided in Section 7.01 upon receipt of
a new list so furnished.
(b) Every Holder of the Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 312 of the Trust Indenture Act.
SECTION 7.03. Reports by Trustee.
------------------
The term "reporting date", as used in this Section, shall be May
15, commencing with May 15, of the year following the first issue of any
Securities under this Indenture. Within 60 days after the reporting date in each
year, or at any other times as may be required by the Trust Indenture Act, the
Trustee shall transmit by mail to all Securityholders, as their names and
addresses appear in the Security Register, such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act dated as of such reporting date or at any other times as may be
required by the Trust Indenture Act.
A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each securities
exchange upon which Securities are
54
listed, and also with the Commission. The Company will notify the Trustee when
Securities are listed on, or delisted from, any securities exchange.
SECTION 7.04. Reports by Company.
------------------
The Company will file with the Trustee and the Commission and
transmit to Holders, such information, documents and other reports as may be
required pursuant to the Trust Indenture Act at the times and in the manner
required by the Trust Indenture Act.
SECTION 7.05. Statement by Officers as to Default.
-----------------------------------
The Company shall deliver to the Trustee, as soon as possible and
in any event within 10 Business Days after the Company becomes aware of the
occurrence of any Event of Default or an event which, with notice or the lapse
of time or both, would constitute an Event of Default, an Officers' Certificate
setting forth the details of such Event of Default or default and the action
which the Company proposes to take with respect thereto.
ARTICLE EIGHT
REMEDIES
SECTION 8.01. Events of Default.
-----------------
"Event of Default", wherever used herein with respect to the
----------------
Securities, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be 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) default in the payment of any interest (including any
Additional Interest) upon any Security when the same becomes due and
payable, and continuance of such default for a period of 30 days,
whether or not such payment shall be prohibited by Article 5; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security when the same becomes due and payable (whether
at the Final Maturity Date, upon redemption, on a Change of Control
Purchase Date or otherwise), whether or not such payment shall be
prohibited by Article 5; or
(3) default in giving notice to the Trustee and each Holder of a
Change in Control in accordance with Section 3.09(b); or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere
in this Section specifically dealt with), and continuance of such
default or breach for a period of 90 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in
Principal Amount of the Outstanding Securities,
55
a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
-----------------
or
(5) the entry of an order for relief in respect of any petition filed
against the Company under the Bankruptcy Code, or the entry of a decree or
order by a court having competent jurisdiction in the premises in respect
of any petition filed or action taken against the Company looking to
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any other present or future Federal or
State statute, law or regulation, resulting in the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Company or of any substantial part of its property,
or resulting in the winding-up or liquidation of its affairs, all without
the consent or acquiescence of the Company, and the continuance of any such
decree or order is unstayed and in effect for a period of 60 consecutive
days; or
(6) the filing of a petition for relief under the Bankruptcy Code by
the Company, or the consent, acquiescence or taking of any action by the
Company in support of a petition filed by or against it looking to
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any other present or future federal or
state statute, law or regulation, or the appointment, with the consent of
the Company, of any receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 8.01, a record date shall automatically and without any other action by
any Person be set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such Notice of Default, which record date shall
be the close of business on the day the Trustee receives such Notice of Default.
The Holders of Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in such
Notice of Default, whether or not such Holders remain Holders after such record
date; provided that, unless such Notice of Default shall have become effective
--------
by virtue of Holders of the requisite Principal Amount of Outstanding Securities
on such record date (or their duly appointed agents) having joined therein on or
prior to the 90th day after such record date, such Notice of Default shall
automatically and without any action by any Person be canceled and of no further
effect.
SECTION 8.02. 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 may declare the principal of all of the Securities
to be immediately due and payable, by a notice in writing to the Company (and to
the Trustee if given by Securityholders), and upon any such declaration such
principal, together with interest accrued thereon, shall become immediately due
and payable.
56
At any time after such a declaration of acceleration with this respect
to the Securities has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee as hereinafter in this Article
provided, 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 installments of interest on all the 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 after the date such principal
became due at the rate borne by the Securities per annum,
(C) to the extent that payment of such interest is legally
enforceable, interest upon overdue interest at the rate borne by the
Securities per annum, 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; and
(2) all Events of Default by virtue of which the of securities are
Defaulted, other than the non-payment of the principal of the Securities
which has become due solely by such acceleration, have been cured or waived
as provided in Section 8.13
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or any
rescission and annulment of any such declaration, pursuant to this Section 8.02,
a record date shall automatically and without any other action by any Person be
set for the purpose of determining the Holders of Outstanding Securities
entitled to join in such declaration, or rescission and annulment, as the case
may be, which record date shall be the close of business on the day the Trustee
receives such declaration, or rescission and annulment, as the case may be. The
Holders of Outstanding Securities on such record date (or their duly appointed
agents), and only such Persons, shall be entitled to join in such declaration,
or rescission and annulment, as the case may be, whether or not such Holders
remain Holders after such record date; provided that, unless such declaration,
--------
or rescission and annulment, as the case may be, shall have become effective by
virtue of Holders of the requisite Principal Amount of Outstanding Securities on
such record date (or their duly appointed agents) having joined therein on or
prior to the 90th day after such record date, such declaration, or rescission
and annulment, as the case may be, shall automatically and without any action by
any Person be canceled and of no further effect.
57
SECTION 8.03. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company covenants, but only for the benefit of the Holders of the
Securities, that if
(1) default is made in the payment of any installment of 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 (or premium, if
any, on) any Security at the Final Maturity Date, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of the
Securities, the whole amount then due and payable on such Securities for
principal (and premium, if any) and interest (including Additional
Interest, if any), and (to the extent that payment of such interest shall
be legally enforceable) with interest upon the overdue principal (and
premium, if any) and upon overdue installments of interest, at the rate of
interest borne by the Securities per annum; 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 the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
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 of the Securities 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 to enforce
any other proper remedy.
SECTION 8.04. Trustee May File Proofs of Claim.
--------------------------------
In case of any 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
58
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 9.07.
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; provided,
--------
however, that the Trustee may, on behalf of the Holders, vote for the election
-------
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 8.05. 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 8.06. 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 (or premium,
if any) or interest, upon presentation of the Defaulted 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
9.07;
SECOND: To the Holders of Senior Indebtedness to the extent required
by Article 5.
THIRD: To the payment of the amounts then due and unpaid upon the
Securities for principal (and premium, if any) and interest, if any, 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 premium, if
any) and interest, respectively; and
FOURTH: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 8.07. 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
59
(1) such Holder is the Holder of a Security and has previously given
written notice to the Trustee of a continuing Event of Default;
(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 reasonable
indemnity 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 of Securities 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 of Securities or to obtain or to seek to obtain priority or
preference over any other such 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 of the Securities.
SECTION 8.08. Unconditional Right of Securityholders to Receive
-------------------------------------------------
Principal, Premium and Interest and to Convert.
----------------------------------------------
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 premium, if any) and (subject to
Section 2.07) interest (including Additional Interest, if any), if any, on such
Security on the respective Stated Maturities (or, in the case of redemption, on
the Redemption Date or the Change in Control Purchase Date, as the case may be),
to convert such Security in accordance with Article 4, and to institute suit for
the enforcement of any such payment or right, and such right shall not be
impaired without the consent of such Holder.
SECTION 8.09. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Securityholder 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 Securityholder, then and in every such case the Company,
the Trustee, such Securityholder and all Holders of other Securities shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and such Securityholders shall continue as though no
such proceeding had been instituted.
60
SECTION 8.10. 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 2.06, no right or remedy herein conferred upon or reserved to the
Trustee or the Securityholders 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 8.11. 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 Securityholders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Securityholders,
as the case may be.
SECTION 8.12. Control by Securityholders.
--------------------------
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,
(2) subject to the provisions of Section 9.01, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Officers of the Trustee, determine
that the proceeding so directed would be unjustly prejudicial to the
Holders of the Securities not joining in any such direction or would
involve the Trustee in personal liability, and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Upon receipt by the Trustee of any such direction, a record date shall
automatically and without any other action by any Person be set for determining
the Holders of Outstanding Securities entitled to join in such direction, which
record date shall be the close of business on the day the Trustee receives such
direction. The Holders of Outstanding Securities on such record date (or their
duly appointed agents), and only such Persons, shall be entitled to join in such
direction, whether or not such Holders remain Holders after such record date;
provided that, unless such direction shall have become effective by virtue of
--------
Holders of the requisite Principal Amount of Outstanding Securities on such
record date (or their duly appointed agents) having joined therein on or prior
to the 90th day after such record date, such
61
direction shall automatically and without any action by any Person be canceled
and of no further effect.
SECTION 8.13. Waiver of Past Defaults.
-----------------------
The Holders of 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 by virtue of which the Securities are, or
with notice or lapse of time or both would be, Defaulted, except a default not
theretofore cured
(1) in the payment of the principal of (or premium, if any) or
interest (including Additional Interest, if any), on any Security,
(2) in respect of the conversion of any Security into Common Stock
pursuant to Article 4, or
(3) in respect of a covenant or provision hereof which under Article
11 cannot be modified or amended without the consent of the Holder of each
Outstanding Security.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 8.14. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount of
the Outstanding Securities, or to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of (or premium, if any) or
interest, if any, on any Security on or after the respective Stated Maturity
(or, in the case of redemption, on or after the Redemption Date or the Change in
Control Purchase Date, as the case may be), or to enforcement of the right to
convert such Security in accordance with Article 4, and 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.
SECTION 8.15. 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
62
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.
ARTICLE NINE
THE TRUSTEE
SECTION 9.01. Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 9.02. Notice of Default.
-----------------
If a default occurs hereunder, the Trustee shall give the Holders of
Securities notice of such default as and to the extent provided by the TIA;
provided, however, that in the case of any default of the character specified in
-------- -------
Section 8.01(4) no such notice to Securityholders shall be given until at least
60 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.
SECTION 9.03. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 9.01 and Sections 315(a) through
315(d) of the TIA:
(a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note or other paper or document reasonably 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 a Company Order and any
resolution of the Board of Directors shall 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
63
hereunder, the Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, conclusively rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection 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 Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity reasonably satisfactory to the Trustee 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 or 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
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
(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;
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder;
and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any
64
person authorized to sign an Officers' Certificate, including any person
specified as so authorized in any such certificate previously delivered and not
superseded.
SECTION 9.04. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
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 9.05. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any
Securities 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
Section 9.08 and 9.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Securities Registrar or such other agent.
SECTION 9.06. 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 with the Company.
SECTION 9.07. Compensation and Reimbursement.
------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time such reasonable
compensation for all services rendered by it hereunder as the Company and
the Trustee shall from time to time agree in writing (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 negligence or bad
faith; and
(3) to indemnify the Trustee, any predecessor Trustee and their
respective agents for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of
the trust or 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.
65
As security for the performance of the obligations of the Company
under this Section the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of Holders of particular Securities.
The provisions of this Section 9.09 shall survive the termination
of this Indenture.
SECTION 9.08. Disqualification; Conflicting Interests.
---------------------------------------
(a) If the Trustee has or shall acquire any conflicting interest,
as defined in this Section, with respect to the Securities, it shall, within 90
days after ascertaining that it has such conflicting interest, either eliminate
such conflicting interest or resign in the manner and with the effect
hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section, the Trustee shall, within 10 days
after the expiration of such 90-day period, transmit by mail to all Holders of
Securities, as their names and addresses appear in the Security Register, notice
of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed
to have a conflicting interest with respect to the Securities if the Trustee has
or acquires a conflicting interest as described in Section 310(b) of the Trust
Indenture Act.
SECTION 9.09. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder that shall be
eligible to act under Section 310(a)(1) of the TIA and shall have a combined
capital and surplus (computed in accordance with Section 310(a)(2) of the TIA)
of at least $50,000,000. If at any time a 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 9.10. 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 9.11.
(b) The Trustee may resign subject to the provisions of Section
310 of the TIA 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, at the Company's reasonable expense, 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.
66
(d) If at any time:
(1) the Trustee shall fail to comply with Section 9.08(a) after
written request therefor by the Company or by any Securityholder 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 9.09 and
shall fail to resign after written request therefor by the Company or
by any such Securityholder, 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 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 8.14, any Securityholder 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 or
Trustees.
(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
or Trustees and shall comply with the applicable requirements of Section 9.11.
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 in accordance
with the applicable requirements of Section 9.11, become the successor Trustee
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee shall have been so appointed by the Company or the
Securityholders and accepted appointment in the manner required by Section 9.11,
any Securityholder 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 the
Holders of Securities in the manner provided in Section 1.06. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 9.11. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment of a successor Trustee, such
successor Trustee so appointed 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; but, on request of the Company or the successor
Trustee, such retiring Trustee shall,
67
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, subject
nevertheless to its lien, if any, provided for in Section 9.07.
(b) 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 referred
to in Subsection (a) of this Section, as the case may be.
(c) 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 9.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business of Trustee.
-------------------
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 of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that 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.
SECTION 9.13. Preferential Collection of Claims against Company.
-------------------------------------------------
If the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company the Trustee shall be subject to
the provisions of Section 311 of the Trust Indenture Act regarding the
collection of claims against the Company.
SECTION 9.14. Authenticating Agents.
---------------------
The Trustee, from time to time upon receipt of a Company Request,
shall promptly appoint one or more Authenticating Agents with power to act on
its behalf and subject to its direction in the authentication and delivery of
Securities and in connection with registrations of transfers and exchanges of
Securities as fully for all intents and purposes as though each Authenticating
Agent had been expressly authorized to authenticate and deliver such Securities.
For all purposes of this Indenture, the authentication and delivery of
Securities by any Authenticating Agent pursuant to this Section shall be deemed
to be the authentication and delivery of such Securities "by the Trustee." Any
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America or of any State and authorized under such laws to act as
authenticating agent, with a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the TIA) of at least $5,000,000 and subject
to supervision or examination by Federal or state authority. If at any time an
Authenticating Agent shall cease to be eligible in accordance
68
with the provisions of this Section, it shall resign immediately in the manner
and with the effect specified in this Section.
Any corporation into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of any
Authenticating Agent, shall be the successor of such
Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee, the Company or the Authenticating Agent
or such successor corporation.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time and shall, upon receipt of a Company Request, terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Trustee,
upon receipt of a Company Request, shall promptly appoint a successor
Authenticating Agent acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to the Holders of Securities,
and shall publish notice of such appointment, at the Company's reasonable
expense, at least once in an Authorized Newspaper in the place where such
successor Authenticating Agent has its principal office. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The provisions of Sections 2.09, 9.04 and 9.05 shall be
applicable to any Authenticating Agent.
The Company agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services.
ARTICLE TEN
SECURITYHOLDERS' MEETINGS
SECTION 10.01. Purposes of Meetings.
--------------------
A meeting of the Holders of the Securities may be called at any
time and from time to time pursuant to the provisions of this Article 10 for any
of the following purposes:
(1) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to waive any default hereunder
and its consequences, or to take any other action authorized to be
taken by Securityholders pursuant to any of the provisions of Article
8;
69
(2) to remove the Trustee and appoint a successor pursuant to the
provisions of Article 9;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on
behalf of the holders of a specified aggregate Principal Amount of the
Outstanding Securities under any other provision of this Indenture or
under applicable law.
SECTION 10.02. Call of Meetings by Trustee.
---------------------------
The Trustee may at any time call a meeting of Securityholders to
take any action specified in Section 10.01, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, State of New York, as
the Trustee shall determine. Notice of every meeting of the Securityholders,
setting forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be mailed to holders of the
Securities at their addresses as they shall appear in the Security Register.
Such notice shall be mailed not less than 20 nor more than 90 days prior to the
date fixed for the meeting.
SECTION 10.03. Call of Meetings by Company or Securityholders.
----------------------------------------------
In case at any time the Company, pursuant to a Board Resolution,
or the holders of at least 10% in aggregate Principal Amount of the Securities
then Outstanding, shall have requested the Trustee to call a meeting of
Securityholders by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within 20 days after receipt of such request, then the
Company or such Securityholders may determine the time and the place in said
Borough of Manhattan for such meeting and may call such meeting to take any
action authorized in Section 10.01, by mailing notice thereof as provided in
Section 10.02.
SECTION 10.04. Qualifications for Voting.
-------------------------
To be entitled to vote at any meeting of Securityholders a Person
shall (a) be a Holder of one or more Securities or (b) be a Person appointed by
an instrument in writing as proxy by a holder of one or more such Securities.
The only Persons who shall be entitled to be present or to speak at any meeting
of Securityholders shall be the Persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 10.05. Regulations.
-----------
Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Securityholders, in regard to proof of the 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 meeting as it shall think fit.
70
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 Securityholders, as provided in Section 10.03, in which case the
Company or the Securityholders 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 a majority in aggregate
Principal Amount of the Securities represented at the meeting and entitled to
vote.
At any meeting each Securityholder or proxy shall be entitled to one
vote for each $1,000 of principal amount 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
other than by virtue of Securities held by him or instruments in writing as
aforesaid duly designating him as the Person to vote on behalf of other
Securityholders. Any meeting of Securityholders duly called pursuant to the
provisions of Section 10.02 or 10.03 may be adjourned from time to time, and the
meeting may be held as so adjourned without further notice.
At any meeting of Securityholders, the presence of Persons holding or
representing Securities in an aggregate Principal Amount sufficient to take
action upon the business for the transaction of which such meeting was called
shall be necessary to constitute a quorum; but, if less than a quorum be
present, the Persons holding or representing a majority in aggregate Principal
Amount of the Securities represented at the meeting and entitled to vote may
adjourn such meeting with the same effect, for all intents and purposes, as
though a quorum had been present.
SECTION 10.06. Voting.
------
The vote upon any resolution submitted to any meeting of Securityholders
shall be by written ballots on which shall be subscribed the signatures of the
holders of Securities or of their representatives by proxy and the serial number
or 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 duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Securityholders 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 mailed as
provided in Section 10.02. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
71
SECTION 10.07. Action by Securityholders.
-------------------------
Whenever in this Indenture it is provided that the Holders of a
specified percentage in aggregate Principal Amount of the outstanding Securities
may take any action (including the making of any demand or request, the giving
of any notice, consent or waiver or the taking of any other action), the fact
that at the time of taking any such action the Holders of such specified
percentage have joined therein may be evidenced (a) by any Act of such
Securityholders pursuant to Section 1.04, or (b) by the record of such
Securityholders voting in favor thereof at any meeting of such Securityholders
duly called and held in accordance with the provisions of Article 10, or (c) by
a combination of such Act and any such record of such a meeting of such
Securityholders.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 11.01. Supplemental Indentures without Consent of
------------------------------------------
Securityholders.
---------------
Without the consent of the Holders of any Securities, the Company,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, 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 of the Securities, 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 shall not adversely affect the
--------
interest of any of the Holders of the Securities; or
(4) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this
Indenture under the TIA, or under any similar Federal statute hereafter
enacted; or
(5) to provide for the issuance under this Indenture of Securities in
the form only of an entry or entries in the Security Register and without
delivery thereof in any form (including all appropriate notification and
publication and other provisions), and to provide for exchangeability of
such Securities; or
(6) to evidence and provide for the acceptance, of appointment
hereunder by a successor Trustee.
72
SECTION 11.02. Supplemental Indentures with Consent of
---------------------------------------
Securityholders.
---------------
With the consent of the Holders of not less than 66 2/3% in Principal
Amount of the Outstanding Securities, in each case 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 of such Securities 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 the principal of, or any installment
of interest (including Additional Interest, if any) on, any Security, or
reduce the principal (or premium, if any) thereof payable when the same
becomes due and payable (whether at the Final Maturity Date, upon
redemption, on a Change of Control Purchase Date or otherwise) or the rate
of interest, thereon, or change any Redemption Price or Change in Control
Purchase Price, or reduce the amount of principal of any Security that may
at any time be declared to be due and payable pursuant to Section 8.02, or
change the place of payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right
to institute suit for the enforcement of any payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date or Change in Control Purchase Price) or for enforcement of the right
to convert a Security in accordance with Article 4, or alter adversely the
terms and provisions of Article 4 applicable to conversion of the
Securities or modify the subordination provisions of Article 5 in a manner
materially adverse to the Holders of Securities; or
(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 6.11 or
Section 8.13, 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 an Act of Securityholders 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 11.03. 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 9.01) shall be fully
73
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by and complies with this
Indenture. The Trustee may, but shall not (except to the extent required in the
case of a supplemental indenture entered into under Section 11.01(4) 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 11.04. 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; provided, however, that supplemental indentures under
-------- -------
this Article 11 may not make any change that adversely affects the rights under
Article 5 of any holder of an issue of Senior Indebtedness unless the holders of
that issue, pursuant to its terms, consent to the change.
SECTION 11.05. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 11.06. 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
Board of Directors, 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 11.07. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 11.02, the Company
shall give notice thereof to the Holders of each Outstanding Security, pursuant
to Section 1.06, setting forth in general terms the substance of such
supplemental indenture. Any failure of the Company to give such notice, or any
defect therein, shall not, in any way, impair or affect the validity of any such
supplemental indenture.
ARTICLE TWELVE
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 12.01. Company May Consolidate, etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless
74
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Company substantially as an entirety shall
be a corporation organized and existing under the laws of the United States
of America or any State or the District of Columbia, and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, the due and punctual payment of the principal of (and premium, if
any) and interest, if any, on all the Securities and the performance or
observance of every covenant of this Indenture on the part of the Company
to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 12.02. Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety in accordance
with Section 12.01, the successor corporation formed by such consolidation or
into which the Company is merged or to which such conveyance or transfer 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
corporation had been named as the Company herein and thereafter the predecessor
corporation shall be released from all obligations and covenants under this
Indenture and the Securities. In the event of any such conveyance or transfer,
the Company as the predecessor corporation may be dissolved, wound up and
liquidated at any time thereafter.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
SECTION 13.01. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer, exchange
or conversion of Securities herein expressly provided for and any rights to
receive payments of interest thereon), and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments 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 2.06, and
(ii) Securities for whose
75
payment money has theretofore been (x) 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
6.03(d) or (y) paid to any State or the District of Columbia pursuant
to its unclaimed property or similar laws) 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 the Final Maturity Date
within ninety days, or
(iii) have been called for redemption within ninety days
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, money in an amount in the currency in which
such Securities are payable, sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and
interest (including Additional Interest, if any), if any, to the date
of such deposit (in the case of Securities which have become due and
payable), or to the Final Maturity Date 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 9.07, the obligations of
the Trustee to any Authenticating Agent under Section 9.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the provisions of Sections 1.04, 2.05, 2.06, 2.12, 3.09, 3.10,
3.11, 3.12, 3.13, 6.02, 6.03, 7.01, 7.02, Article 4, the last paragraph of
Section 6.08 and this Article 13 shall survive until the Securities have been
paid in full.
SECTION 13.02. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 6.03, all
money deposited with the Trustee pursuant to Section 13.01 shall be held in
trust and 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),
76
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest, if any, for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
SECTION 13.03. Reinstatement.
-------------
If the Trustee or the Paying Agent is unable to apply any money
in accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 13.01 shall be revived and reinstated as though no
deposit had occurred pursuant to this Article with respect to such Securities,
until such time as the Trustee or Paying Agent is permitted to apply all money
held in trust pursuant to Section 13.02 with respect to such Securities in
accordance with this Article; provided, however, that if the Company makes any
-------- -------
payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.01. Exemption from Individual Liability.
-----------------------------------
No recourse under or upon any obligation, covenant or agreement
of this Indenture, or of any Security, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company,
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 of the Company, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors, as such, of the Company or of any successor
corporation, 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 of the Securities or implied therefrom;
and that any and all such personal liability, 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, 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 of the Securities 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 the Securities.
77
ARTICLE FIFTEEN
MISCELLANEOUS
SECTION 15.01. Counterparts.
------------
This Indenture may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
(Remainder of page intentionally left blank)
00
Xxx Xxxx xx Xxx Xxxx hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and the Company has caused its corporate seal to be
hereunto affixed and attested, all as of the day and year first above written.
X. X. XXXXXX COMPANY, INC.
By_________________________________
Xxxxxx X. Xxxxxxxxx
Executive Vice President and
Chief Financial Officer
Attest:
__________________________
THE BANK OF NEW YORK
By_________________________________
79
STATE OF TEXAS )
) ss.:
COUNTY OF COLLIN )
On this 15th day of October, 2001, before me personally came
Xxxxxx X. Xxxxxxxxx, to me known, who, being by me duly sworn, did depose and
say that he resides at Plano, Texas; that he is Executive Vice President and
Chief Financial Officer of X. X. Penney Company, Inc., one of the corporations
described in and which executed the foregoing instrument; that he knows the
corporate seal of said corporation; that the seal affixed to said instrument is
said corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
______________________________
Notary Public
80
EXHIBIT A
[FORM OF FACE OF SECURITY]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO X. X. XXXXXX COMPANY, INC. (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 THE DEPOSITORY TRUST COMPANY (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF
THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.](1)
[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND THE COMMON STOCK ISSUABLE
UPON CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.](2)
[THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF X. X. PENNEY
COMPANY, INC. THAT (A) THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY: (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A; (II) OUTSIDE THE
UNITED STATES IN A TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904 UNDER
THE SECURITIES ACT; (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE); OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
_________________________________
1 This paragraph should be included only if the Security is a Global Security.
2 This paragraph to be included only if the Security is a Transfer Restricted
Security.
A-1
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY
CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
TRANSACTIONS WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT.](2)
[THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED
TO ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY
AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.](2)
THIS SECURITY MAY NOT BE SOLD OR TRANSFERRED TO, AND EACH PURCHASER BY
ITS PURCHASE OF THIS SECURITY SHALL BE DEEMED TO HAVE REPRESENTED AND COVENANTED
THAT IT IS NOT ACQUIRING THIS SECURITY FOR OR ON BEHALF OF, AND WILL NOT
TRANSFER THIS SECURITY TO, ANY PENSION OR WELFARE PLAN AS DEFINED IN SECTION 3
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")
-----
EXCEPT THAT SUCH PURCHASE FOR OR ON BEHALF OF A PENSION OR WELFARE PLAN SHALL BE
PERMITTED:
(1) TO THE EXTENT SUCH PURCHASE IS MADE BY OR ON BEHALF OF A BANK
COLLECTIVE INVESTMENT FUND MAINTAINED BY THE PURCHASER IN WHICH NO PLAN
(TOGETHER WITH ANY OTHER PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE
ORGANIZATION) HAS AN INTEREST IN EXCESS OF 10% OF THE TOTAL ASSETS IN SUCH
COLLECTIVE INVESTMENT FUND, AND THE OTHER APPLICABLE CONDITIONS OF
PROHIBITED TRANSACTION CLASS EXEMPTION 91-38 ISSUED BY THE DEPARTMENT OF
LABOR ARE SATISFIED;
(2) TO THE EXTENT SUCH PURCHASE IS MADE BY OR ON BEHALF OF AN
INSURANCE COMPANY POOLED SEPARATE ACCOUNT MAINTAINED BY THE PURCHASER IN
WHICH, AT ANY TIME WHILE THESE SECURITIES ARE OUTSTANDING, NO PLAN
(TOGETHER WITH ANY OTHER PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE
ORGANIZATION) HAS AN INTEREST IN EXCESS OF 10% OF THE TOTAL OF ALL ASSETS
IN SUCH POOLED SEPARATE ACCOUNT, AND THE OTHER APPLICABLE CONDITIONS OF
PROHIBITED TRANSACTION CLASS EXEMPTION 90-1 ISSUED BY THE DEPARTMENT OF
LABOR ARE SATISFIED;
(3) TO THE EXTENT SUCH PURCHASE IS MADE ON BEHALF OF A PLAN BY (A) AN
INVESTMENT ADVISER REGISTERED UNDER THE
_____________________
2 This paragraph to be included only if the Security is a Transfer Restricted
Security.
A-2
INVESTMENT ADVISERS ACT OF 1940, AS AMENDED (THE "1940 ACT"), THAT HAD AS OF THE
--------
LAST DAY OF ITS MOST RECENT FISCAL YEAR TOTAL ASSETS UNDER ITS MANAGEMENT AND
CONTROL IN EXCESS OF $50.0 MILLION AND HAD STOCKHOLDERS' OR PARTNERS' EQUITY IN
EXCESS OF $750,000, AS SHOWN IN ITS MOST RECENT BALANCE SHEET PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, OR (B) A BANK AS
DEFINED IN SECTION 202(A)(2) OF THE 1940 ACT WITH EQUITY CAPITAL IN EXCESS OF
$1.0 MILLION AS OF THE LAST DAY OF ITS MOST RECENT FISCAL YEAR, OR (C) AN
INSURANCE COMPANY WHICH IS QUALIFIED UNDER THE LAWS OF MORE THAN ONE STATE TO
MANAGE, ACQUIRE OR DISPOSE OF ANY ASSETS OF A PENSION OR WELFARE PLAN, WHICH
INSURANCE COMPANY HAS AS OF THE LAST DAY OF ITS MOST RECENT FISCAL YEAR, NET
WORTH IN EXCESS OF $1.0 MILLION AND WHICH IS SUBJECT TO SUPERVISION AND
EXAMINATION BY A STATE AUTHORITY HAVING SUPERVISION OVER INSURANCE COMPANIES
AND, IN ANY CASE, SUCH INVESTMENT ADVISER, BANK OR INSURANCE COMPANY IS
OTHERWISE A QUALIFIED PROFESSIONAL ASSET MANAGER, AS SUCH TERM IS USED IN
PROHIBITED TRANSACTION CLASS EXEMPTION 84-14 ISSUED BY THE DEPARTMENT OF LABOR,
AND THE ASSETS OF SUCH PLAN WHEN COMBINED WITH THE ASSETS OF OTHER PLANS
ESTABLISHED OR MAINTAINED BY THE SAME EMPLOYER (OR AFFILIATE THEREOF) OR
EMPLOYEE ORGANIZATION AND MANAGED BY SUCH INVESTMENT ADVISER, BANK OR INSURANCE
COMPANY, DO NOT REPRESENT MORE THAN 20% OF THE TOTAL CLIENT ASSETS MANAGED BY
SUCH INVESTMENT ADVISER, BANK OR INSURANCE COMPANY AT THE TIME OF THE
TRANSACTION, AND THE OTHER APPLICABLE CONDITIONS OF SUCH EXEMPTION ARE OTHERWISE
SATISFIED;
(4) TO THE EXTENT SUCH PLAN IS A GOVERNMENTAL PLAN (AS DEFINED AS SECTION 3
OF ERISA) WHICH IS NOT SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA OR SECTION
401 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE");
----
(5) TO THE EXTENT SUCH PURCHASE IS MADE BY OR ON BEHALF OF AN INSURANCE
COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT, THE RESERVES AND LIABILITIES
FOR THE GENERAL ACCOUNT CONTRACTS HELD BY OR ON BEHALF OF ANY PLAN, TOGETHER
WITH ANY OTHER PLANS MAINTAINED BY THE SAME EMPLOYER (OR ITS AFFILIATES) OR
EMPLOYEE ORGANIZATION, DO NOT EXCEED 10% OF THE TOTAL RESERVES AND LIABILITIES
OF THE INSURANCE COMPANY GENERAL ACCOUNT (EXCLUSIVE OF SEPARATE ACCOUNT
LIABILITIES), PLUS SURPLUS AS SET FORTH IN THE NATIONAL ASSOCIATION OF INSURANCE
COMMISSIONERS ANNUAL STATEMENT FILED WITH THE STATE OF DOMICILE OF THE INSURER,
IN ACCORDANCE WITH PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, AND THE OTHER
APPLICABLE CONDITIONS OF SUCH EXEMPTION ARE OTHERWISE SATISFIED;
A-3
(6) TO THE EXTENT PURCHASE IS MADE BY AN IN-HOUSE ASSET MANAGER WITHIN
THE MEANING OF PART IV(A) OF PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, SUCH
MANAGER HAS MADE OR PROPERLY AUTHORIZED THE DECISION FOR SUCH PLAN TO PURCHASE
THIS SECURITY, UNDER CIRCUMSTANCES SUCH THAT PROHIBITED TRANSACTION CLASS
EXEMPTION 96-23 IS APPLICABLE TO THE PURCHASE AND HOLDING OF THIS SECURITY; OR
(7) TO THE EXTENT SUCH PURCHASE WILL NOT OTHERWISE GIVE RISE TO A
TRANSACTION DESCRIBED IN SECTION 406 OR SECTION 4975(C)(1) OF THE CODE FOR WHICH
A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.
A-4
X. X. XXXXXX COMPANY, INC.
CUSIP: 708160 BU 9
ISIN: US708160BU98 No. ___
5% CONVERTIBLE SUBORDINATED NOTES DUE OCTOBER 15, 2008
X. X. Penney Company, Inc., a Delaware corporation (the "Company", which
-------
term shall include any successor corporation under the Indenture referred to on
the reverse hereof), promises to pay to CEDE & CO., or registered assigns, the
principal sum of [_______] Dollars ([$________]) on October 15, 2008 [or such
greater or lesser amount as is indicated on the Schedule of Exchanges of
Securities on the other side of this Security](3)
Interest Payment Dates: April 15 and October 15, beginning April 15,
2002.
Record Dates: April 1 and October 1.
This Security is convertible as specified on the other side of this
Security. Additional provisions of this Security are set forth on the other side
of this Security.
SIGNATURE PAGE FOLLOWS
_____________________
(3) This phrase should be included only if the Security is a Global Security.
A-5
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
X. X. XXXXXX COMPANY, INC.
By:____________________________
Name:
Title:
Attest
By:____________________________
Name:
Title:
Dated:
Trustee's Certificate of Authentication: This is one of
the Securities referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
_______________________________
Authorized Signatory
A-6
[FORM OF REVERSE SIDE OF SECURITY]
X. X. PENNEY COMPANY, INC.
5% CONVERTIBLE SUBORDINATED NOTES DUE OCTOBER 15, 2008
1. Interest.
--------
X. X. Xxxxxx Company, Inc. a Delaware corporation (the "Company", which
-------
term shall include any successor corporation under the Indenture hereinafter
referred to), promises to pay interest on the principal amount of this Security
at the rate of 5% per annum. The Company shall pay interest semiannually on
April 15 and October 15 of each year, commencing April 15, 2002. Interest on the
Securities shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from October 15, 2001; provided, however,
-------- -------
that if there is not an existing Default in the payment of interest and if this
Security is authenticated between a record date referred to on the face hereof
and the next succeeding interest payment date, interest shall accrue from such
interest payment date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. Any reference herein to interest accrued or payable as
of any date shall include any Additional Interest accrued or payable on such
date as provided in the Registration Rights Agreement.
2. Method of Payment.
-----------------
The Company shall pay interest on this Security (except defaulted
interest) to the person who is the Holder of this Security at the close of
business on April 1 or October 1, as the case may be, next preceding the related
interest payment date. The Holder must surrender this Security to a Paying Agent
to collect payment of principal. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. The Company may, however, pay principal and
interest in respect of any Certificated Security by check or wire payable in
such money; provided, however, that a Holder with an aggregate principal amount
-------- -------
in excess of $2,000,000 will be paid by wire transfer in immediately available
funds at the election of such Holder. The Company may mail an interest check to
the Holder's registered address. Notwithstanding the foregoing, so long as this
Security is registered in the name of a Depositary or its nominee, all payments
hereon shall be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee.
3. Paying Agent, Securities Registrar and Conversion Agent.
-------------------------------------------------------
Initially, The Bank of New York (the "Trustee", which term shall
include any successor trustee under the Indenture hereinafter referred to) will
act as Paying Agent, Securities Registrar and Conversion Agent. The Company may
change any Paying Agent, Securities Registrar or Conversion Agent without notice
to the Holder. The Company or any of its Subsidiaries may, subject to certain
limitations set forth in the Indenture, act as Paying Agent or Securities
Registrar.
A-7
4. Indenture, Limitations.
----------------------
This Security is one of a duly authorized issue of Securities of the
Company designated as its 5% Convertible Subordinated Notes Due October 15, 2008
(the "Securities"), issued under an Indenture dated as of October 15, 2001
----------
(together with any supplemental indentures thereto, the "Indenture"), between
---------
the Company and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of this Security include
those stated in the Indenture and those required by or made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended, as in
effect on the date of the Indenture. This Security is subject to all such terms,
and the Holder of this Security is referred to the Indenture and said Act for a
statement of them. The Securities are subordinated unsecured obligations of the
Company limited to $600,000,000 aggregate principal amount plus the amount (up
to an additional $50,000,000) issuable upon exercise of the option in the
Purchase Agreement, subject to Section 2.7 of the Indenture. The Indenture does
not limit other debt of the Company, secured or unsecured, including Senior
Indebtedness.
5. Optional Redemption.
-------------------
The Securities are subject to redemption, at any time on or after
October 20, 2004, on at least 20 days and no more than 60 days notice, in whole
or in part, at the election of the Company. The Redemption Prices (expressed as
percentages of the principal amount) are as follows for Securities redeemed
during the periods set forth below:
Period Redemption Price
------ ----------------
Beginning on October 20, 2004 and ending on October 14, 2005 ............... 102.500%
Beginning on October 15, 2005 and ending on October 14, 2006 ............... 101.667%
Beginning on October 15, 2006 and ending on October 14, 2007 ............... 100.833%
Beginning on October 15, 2007 and thereafter ............................... 100.000%
in each case together with accrued interest up to but not including the
Redemption Date; provided that if the Redemption Date is an interest payment
--------
date, interest will be payable to the Holders in whose names the Securities are
registered at the close of business on the relevant record dates.
6. Notice of Redemption.
--------------------
Notice of redemption will be mailed by first-class mail at least 20
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. Securities in denominations
larger than $1,000 may be redeemed in part, but only in whole multiples of
$1,000. On and after the Redemption Date, subject to the deposit with the Paying
Agent of funds sufficient to pay the Redemption Price plus accrued interest, if
any, accrued to, but excluding, the Redemption Date, interest shall cease to
accrue on Securities or portions of them called for redemption.
7. Purchase of Securities at Option of Holder Upon a Change in Control.
-------------------------------------------------------------------
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase all or any part
specified by the Holder (so long as
A-8
the principal amount of such part is $1,000 or an integral multiple of $1,000 in
excess thereof) of the Securities held by such Holder on the date that is 30
Business Days after the occurrence of a Change in Control, at a purchase price
equal to 100% of the principal amount thereof together with accrued interest up
to, but excluding, the Change in Control Purchase Date. The Holder shall have
the right to withdraw any Change in Control Purchase Notice (in whole or in a
portion thereof that is $1,000 or an integral multiple of $1,000 in excess
thereof) at any time prior to the close of business on the Business Day next
preceding the Change in Control Purchase Date by delivering a written notice of
withdrawal to the Paying Agent in accordance with the terms of the Indenture.
8. Conversion.
----------
A Holder of a Security may convert the principal amount of such
Security (or any portion thereof equal to $1,000 or any integral multiple of
$1,000 in excess thereof) into shares of Common Stock at any time prior to the
close of business on October 15, 2008; provided, however, that if the Security
-------- -------
is called for redemption or subject to purchase upon a Change in Control, the
conversion right will terminate at the close of business on the Business Day
immediately preceding the Redemption Date or the Change in Control Purchase
Date, as the case may be, for such Security or such earlier date as the Holder
presents such Security for redemption or purchase (unless the Company shall
default in making the redemption payment or Change in Control Purchase Price, as
the case may be, when due, in which case the conversion right shall terminate at
the close of business on the date such default is cured and such Security is
redeemed or purchased). The initial Conversion Price is $28.50 per share,
subject to adjustment under certain circumstances. The number of shares of
Common Stock issuable upon conversion of a Security is determined by dividing
the principal amount of the Security or portion thereof converted by the
Conversion Price in effect on the Conversion Date. No fractional shares will be
issued upon conversion; in lieu thereof, an amount will be paid in cash based
upon the Closing Price (as defined in the Indenture) of the Common Stock on the
Trading Day immediately prior to the Conversion Date. To convert a Security, a
Holder must (a) complete and manually sign the conversion notice set forth below
and deliver such notice to a Conversion Agent, (b) surrender the Security to a
Conversion Agent, (c) furnish appropriate endorsements and transfer documents if
required by a Securities Registrar or a Conversion Agent, and (d) pay any
transfer or similar tax, if required. Securities so surrendered for conversion
(in whole or in part) during the period from the close of business on any
regular record date to the opening of business on the next succeeding interest
payment date (excluding Securities or portions thereof called for redemption or
subject to purchase upon a Change in Control on a Redemption Date or Change in
Control Purchase Date, as the case may be, during the period beginning at the
close of business on a regular record date and ending at the opening of business
on the first Business Day after the next succeeding interest payment date, or if
such interest payment date is not a Business Day, the second such Business Day)
shall also be accompanied by payment in funds acceptable to the Company of an
amount equal to the interest payable on such interest payment date on the
principal amount of such Security then being converted, and such interest shall
be payable to such registered Holder notwithstanding the conversion of such
Security, subject to the provisions of this Indenture relating to the payment of
defaulted interest by the Company. If the Company defaults in the payment of
interest payable on such interest payment date, the Company shall promptly repay
such funds to such Holder. A Holder may convert a portion of a Security equal to
$1,000 or any integral multiple thereof. A Security in respect of which a Holder
had delivered a Change in Control Purchase Notice exercising the option of such
Holder to require the Company to purchase such
A-9
Security may be converted only if the Change in Control Purchase Notice is
withdrawn in accordance with the terms of the Indenture.
9. Conversion Arrangement on Call for Redemption.
---------------------------------------------
Any Securities called for redemption, unless surrendered for
conversion before the close of business on the Business Day immediately
preceding the Redemption Date, may be deemed to be purchased from the Holders of
such Securities at an amount not less than the Redemption Price, together with
accrued interest, if any, to, but not including, the Redemption Date, by one or
more investment bankers or other purchasers who may agree with the Company to
purchase such Securities from the Holders, to convert them into Common Stock of
the Company and to make payment for such Securities to the Paying Agent in trust
for such Holders.
10. Subordination.
-------------
The indebtedness evidenced by the Securities is, to the extent and in
the manner provided in the Indenture, subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness of the Company. Any
Holder by accepting this Security agrees to and shall be bound by such
subordination provisions and authorizes the Trustee to give them effect. In
addition to all other rights of Senior Indebtedness described in the Indenture,
the Senior Indebtedness shall continue to be Senior Indebtedness and entitled to
the benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any terms of any instrument relating to the Senior
Indebtedness or any extension or renewal of the Senior Indebtedness.
11. Denominations, Transfer, Exchange.
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may register the transfer
of or exchange Securities in accordance with the Indenture. The Securities
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes or other governmental
charges that may be imposed in relation thereto by law or permitted by the
Indenture.
12. Persons Deemed Owners.
---------------------
The Holder of a Security may be treated as the owner of it for all
purposes.
13. Unclaimed Money.
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent will pay the money back to the
Company at its written request. After that, Holders entitled to money must look
to the Company for payment.
14. Amendment, Supplement and Waiver.
--------------------------------
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least 66-2/3% in
principal amount of the
A-10
Securities then outstanding, and an existing Default or Event of Default and its
consequence or compliance with any provision of the Indenture or the Securities
may be waived in a particular instance with the consent of the Holders of a
majority in principal amount of the Securities then outstanding. Without the
consent of or notice to any Holder, the Company and the Trustee may amend or
supplement the Indenture or the Securities to, among other things, cure any
ambiguity, defect or inconsistency or make any other change that does not
adversely affect the rights of any Holder.
15. Successor Corporation.
---------------------
When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture in accordance with the terms
and conditions of the Indenture, the predecessor corporation will (except in
certain circumstances specified in the Indenture) be released from those
obligations.
16. Defaults and Remedies.
---------------------
Under the Indenture, an Event of Default includes: (i) default for 30
days in payment of any interest on any Securities; (ii) default in payment of
any principal (including, without limitation, any premium, if any) on the
Securities when due; (iii) failure by the Company for 90 days after notice to it
to comply with any of its other agreements contained in the Indenture or the
Securities; (iv) failure by the Company to give notice to the Trustee and
Holders of a Change in Control in accordance with the Indenture; and (v) certain
events of bankruptcy, insolvency or reorganization of the Company. If an Event
of Default occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the Securities then outstanding may declare all unpaid
principal to the date of acceleration on the Securities then outstanding to be
due and payable immediately, all as and to the extent provided in the Indenture.
Holders may not enforce the Indenture or the Securities except as provided in
the Indenture. The Trustee may require reasonable security and indemnity
reasonably satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in principal
amount of the Securities then outstanding may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in their interests. The Company is
required to file periodic reports with the Trustee as to the absence of Default.
17. Trustee Dealings with the Company.
---------------------------------
The Bank of New York, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.
18. No Recourse Against Others.
--------------------------
A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture nor for any claim based on, in respect of or by
reason of such obligations or their creation. The Holder of
A-11
this Security by accepting this Security waives and releases all such liability.
The waiver and release are part of the consideration for the issuance of this
Security.
19. Authentication.
--------------
This Security shall not be valid until the Trustee or an
authenticating agent manually signs the certificate of authentication on the
other side of this Security.
20. Abbreviations and Definitions.
-----------------------------
Customary abbreviations may be used in the name of the Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and UGMA (= Uniform Gifts to Minors Act).
All terms defined in the Indenture and used in this Security but not
specifically defined herein are defined in the Indenture and are used herein as
so defined.
21. Indenture to Control; Governing Law.
-----------------------------------
In the case of any conflict between the provisions of this Security
and the Indenture, the provisions of the Indenture shall control. This Security
shall be governed by, and construed in accordance with, the laws of the State of
New York, without regard to principles of conflicts of law.
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Requests may be made to: X. X. Xxxxxx
Company, Inc., 0000 Xxxxxx Xxxxx, Xxxxx, Xxxxx, 00000-0000, Attention:
Secretary.
A-12
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to ____________________
________________________________________________________________________________
(Insert assignee's Social Security or Tax I.D. number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint
________________________________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
Your Signature:
Date:______________________ _________________________________________
(Sign exactly as your name appears on the
other side of this Security)
*Signature guaranteed by:
By:_______________________
* Signature(s) must be guaranteed by a qualified guarantor institution with
membership in an approved signature guarantee program pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934.
A-13
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check
the box: [_]
To convert only part of this Security, state the principal amount
to be converted (must be $1,000 or a multiple of $1,000): $____________.
If you want the stock certificate made out in another person's
name, fill in the form below:
------------------------------------------------------------------------
(Insert assignee's Social Security or Tax I.D. number)
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
Your Signature:
Date:______________________ ____________________________________________
(Sign exactly as your name appears on the
other side of this Security)
*Signature guaranteed by:
By:________________________
* Signature(s) must be guaranteed by a qualified guarantor institution with
membership in an approved signature guarantee program pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.
A-14
OPTION TO ELECT REPURCHASE
UPON A CHANGE OF CONTROL
To: X. X. Penney Company, Inc.
The undersigned registered owner of this Security hereby
irrevocably acknowledges receipt of a notice from X. X. Xxxxxx Company, Inc.
(the "Company") as to the occurrence of a Change in Control with respect to the
-------
Company and requests and instructs the Company to redeem the entire principal
amount of this Security, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Security at the Change in Control Purchase Price,
together with accrued interest to, but excluding, such date, to the registered
Holder hereof.
Date:___________________________
_______________________________
Signature(s)
Signature(s) must be guaranteed
by a qualified guarantor
institution with membership in
an approved signature guarantee
program pursuant to Rule
17Ad-15 under the Securities
Exchange Act of 1934.
_______________________________
Signature Guaranty
Principal amount to be redeemed (in an integral
multiple of $1,000, if less than all):
___________________________
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without
alteration or any change whatsoever.
A - 15
SCHEDULE OF EXCHANGES OF SECURITIES(4)
The following exchanges, redemptions, repurchases or conversions of a part of
this global Security have been made:
Principal Amount of
this Global Security
Following Such Amount of Decrease in Amount of Increase in
Decrease Date of Authorized Signatory of Principal Amount of this Principal Amount of this
Exchange (or Increase) Securities Custodian Global Security Global Security
---------------------- ----------------------- ------------------------ ------------------------
----------------------------
(4)This schedule should be included only if the Security is a Global Security.
A - 16
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF TRANSFER RESTRICTED SECURITIES(5)
Re: 5% Convertible Subordinated Securities Due October 15, 2008
(the "Securities") of X. X. Xxxxxx Company, Inc.
----------
This certificate relates to $_______ principal amount of Securities
owned in (check applicable box)
[_] book-entry or
[_] definitive form by ________________ (the "Transferor").
----------
The Transferor has requested a Securities Registrar or the Trustee
to exchange or register the transfer of such Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with transfer restrictions relating to the Securities as provided in Section
2.12 of the Indenture dated as of October 15, 2001 between X. X. Penney Company,
Inc. and The Bank of New York, as trustee (the "Indenture"), and the transfer of
---------
such Security is being made pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "Securities Act") (check
--------------
applicable box) or the transfer or exchange, as the case may be, of such
Security does not require registration under the Securities Act because (check
applicable box):
[_] Such Security is being transferred pursuant to an effective
registration statement under the Securities Act.
[_] Such Security is being acquired for the Transferor's own account,
without transfer.
[_] Such Security is being transferred to the Company or a Subsidiary
(as defined in the Indenture) of the Company.
[_] Such Security is being transferred to a person the Transferor
reasonably believes is a "qualified institutional buyer" (as
defined in Rule 144A or any successor provision thereto ("Rule
----
144A") under the Securities Act) that is purchasing for its own
----
account or for the account of a "qualified institutional buyer", in
each case to whom notice has been given that the transfer is being
made in reliance on such Rule 144A, and in each case in reliance on
Rule 144A.
[_] Such Security is being transferred to a purchaser who is not a U.S.
person (as defined in Regulation S under the Securities Act) in an
offshore transaction pursuant to Regulation S under the Securities
Act.
[_] Such Security is being transferred pursuant to and in compliance
with an exemption from the registration requirements under the
Securities Act in accordance with Rule 144 (or any successor
thereto) ("Rule 144") under the Securities Act.
--------
__________________________
(5) This certificate should only be included if this Security is a Transfer
Restricted Security.
B-1
[_] Such Security is being transferred pursuant to and in compliance with
an exemption from the registration requirements of the Securities Act
(other than an exemption referred to above) and as a result of which
such Security will, upon such transfer, cease to be a "restricted
security" within the meaning of Rule 144 under the Securities Act.
Date:__________________________ _________________________________
(Insert Name of Transferor)
B-2
