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EXHIBIT 4.3
KCS ENERGY, INC.
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
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INDENTURE
Dated as of December ___, 1997
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$143,750,000
% Convertible Subordinated Notes due 2004
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Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Section 310(a)(1) .................................... 609
(a)(2) .................................... 609
(a)(3) .................................... Not Applicable
(a)(4) .................................... Not Applicable
(a)(5) .................................... 609
(b) .................................... 608
Section 311(a) .................................... 613
(b) .................................... 613
Section 312(a) .................................... 701
.................................... 702(a)
(b) .................................... 702(b)
(c) .................................... 702(c)
Section 313(a) .................................... 703(a)
(b) .................................... 703(a)
(c) .................................... 703(a)
(d) .................................... 703(b)
Section 314(a) .................................... 704
(a)(4) .................................... 1005
(b) .................................... Not Applicable
(c)(1) .................................... 102
(c)(2) .................................... 102
(c)(3) .................................... Not Applicable
(d) .................................... Not Applicable
(e) .................................... 102
Section 315(a) .................................... 601
(b) .................................... 602
(c) .................................... 601
(d) .................................... 601
(e) .................................... 514
Section 316(a)(1) .................................... 502
(a)(1)(A) .................................... 512
(a)(1)(B) .................................... 513
(a)(2) .................................... Not Applicable
(b) .................................... 508
(c) .................................... 104(c)
Section 317(a)(1) .................................... 503
(a)(2) .................................... 504
(b) .................................... 1004
Section 318(a) .................................... 107
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Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
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TABLE OF CONTENTS
ARTICLE ONE
Definitions and Other Provisions
of General Application................................................1
SECTION 101. Definitions.........................................1
SECTION 102. Compliance Certificates and Opinions................8
SECTION 103. Form of Documents Delivered to Trustee..............9
SECTION 104. Acts of Holders; Record Dates......................10
SECTION 105. Notices, Etc., to Trustee and Company..............11
SECTION 106. Notice to Holders; Waiver..........................11
SECTION 107. Conflict with Trust Indenture Act..................12
SECTION 108. Effect of Headings and Table of Contents...........12
SECTION 109. Successors and Assigns.............................12
SECTION 110. Separability Clause................................12
SECTION 111. Benefits of Indenture..............................12
SECTION 112. Governing Law......................................13
SECTION 113. Legal Holidays.....................................13
SECTION 114. Limitation on Individual Liability.................13
ARTICLE TWO
Security Forms.......................................................14
SECTION 201. Forms Generally....................................14
SECTION 202. Form of Face of Security...........................14
SECTION 203. Form of Reverse of Security........................16
SECTION 204. Form of Trustee's Certificate
of Authentication.................................25
ARTICLE THREE
The Securities.......................................................25
SECTION 301. Title and Terms....................................25
SECTION 302. Denominations......................................26
SECTION 303. Execution, Authentication, Delivery
and Dating........................................26
SECTION 304. Temporary Securities...............................27
SECTION 305. Registration, Registration of Transfer
and Exchange......................................28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities...31
SECTION 307. Payment of Interest; Interest Rights Preserved.....31
SECTION 308. Persons Deemed Owners..............................33
SECTION 309. Cancellation.......................................33
SECTION 310. Computation of Interest............................33
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ARTICLE FOUR
Satisfaction and Discharge...........................................34
SECTION 401. Satisfaction and Discharge of Indenture............34
SECTION 402. Application of Trust Money.........................35
SECTION 403. Reinstatement......................................35
ARTICLE FIVE
Remedies.............................................................36
SECTION 501. Events of Default..................................36
SECTION 502. Acceleration of Maturity; Rescission and
Annulment.........................................38
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee............................39
SECTION 504. Trustee May File Proofs of Claim...................40
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities.....................................41
SECTION 506. Application of Money Collected.....................41
SECTION 507. Limitation on Suits................................41
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest...................42
SECTION 509. Restoration of Rights and Remedies.................42
SECTION 510. Rights and Remedies Cumulative.....................42
SECTION 511. Delay or Omission Not Waiver.......................43
SECTION 512. Control by Holders. ...............................43
SECTION 513. Waiver of Past Defaults............................44
SECTION 514. Undertaking for Costs..............................44
ARTICLE SIX
The Trustee..........................................................44
SECTION 602. Notice of Defaults.................................45
SECTION 603. Certain Rights of Trustee..........................45
SECTION 604. Not Responsible for Recitals or Issuance of
Securities........................................47
SECTION 605. May Hold Securities................................47
SECTION 606. Money Held in Trust................................47
SECTION 607. Compensation and Reimbursement.....................47
SECTION 608. Disqualification; Conflicting Interests............48
SECTION 609. Corporate Trustee Required; Eligibility............49
SECTION 610. Resignation and Removal; Appointment of
Successor.........................................49
SECTION 611. Acceptance of Appointment by Successor.............50
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business............................51
SECTION 613. Preferential Collection of Claims Against
Company...........................................51
SECTION 614. Appointment of Authenticating Agent................51
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company....................53
SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders........................................53
SECTION 702. Preservation of Information; Communication
to Holders........................................53
SECTION 703. Reports by Trustee.................................54
SECTION 704. Reports by Company.................................54
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease.................55
SECTION 801. Company May Consolidate, Etc., Only on
Certain Terms.....................................55
SECTION 802. Successor Substituted..............................55
ARTICLE NINE
Supplemental Indentures..............................................56
SECTION 901. Supplemental Indentures Without Consent
of Holders........................................56
SECTION 902. Supplemental Indentures with Consent of Holders....56
SECTION 903. Execution of Supplemental Indentures...............57
SECTION 904. Effect of Supplemental Indentures..................57
SECTION 905. Conformity with Trust Indenture Act................58
SECTION 906. Reference in Securities to Supplemental
Indentures........................................58
SECTION 907. Notice of Supplemental Indenture...................58
ARTICLE TEN
Covenants............................................................58
SECTION 1001. Payment of Principal, Premium and Interest.........58
SECTION 1002. Guarantees of Subsidiaries.........................58
SECTION 1003. Maintenance of Office or Agency....................58
SECTION 1004. Money for Security Payments to Be Held in Trust....59
SECTION 1005. Statement by Officers as to Default................60
SECTION 1006. Existence..........................................60
SECTION 1007. Waiver of Certain Covenants........................61
ARTICLE ELEVEN
Redemption of Securities.............................................61
SECTION 1101. Right of Redemption................................61
SECTION 1102. Applicability of Article...........................61
SECTION 1103. Election to Redeem; Notice to Trustee..............61
SECTION 1104. Selection by Trustee of Securities to be
Redeemed..........................................61
SECTION 1105. Notice of Redemption...............................62
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SECTION 1106. Deposit of Redemption Price........................63
SECTION 1107. Securities Payable on Redemption Date..............63
SECTION 1108. Securities Redeemed in Part........................64
ARTICLE TWELVE
Subordination of Securities..........................................64
SECTION 1201. Securities Subordinated to Senior
Indebtedness......................................64
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc.....64
SECTION 1203. Prior Payment to Senior Indebtedness upon
Acceleration of Securities..........................
SECTION 1204. No Payment When Senior Indebtedness in Default.....66
SECTION 1205. Payment Permitted If No Default....................67
SECTION 1206. Subrogation to Rights of Holders of Senior
Indebtedness......................................67
SECTION 1207. Provisions Solely to Define Relative Rights........67
SECTION 1208. Trustee to Effectuate Subordination................68
SECTION 1209. No Waiver of Subordination Provisions..............68
SECTION 1210. Notice to Trustee..................................68
SECTION 1211. Reliance on Judicial Order or Certificate of
Liquidating Agent.................................69
SECTION 1212. Trustee Not Fiduciary for Holders of Senior
Indebtedness......................................69
SECTION 1213. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee'............70
SECTION 1214. Article Applicable to Paying Agents................70
SECTION 1215. Certain Conversions Deemed Payment.................70
SECTION 1216. No Suspension of Remedies..........................70
ARTICLE THIRTEEN
Conversion of Securities.............................................71
SECTION 1301. Conversion Privilege and Conversion Price..........71
SECTION 1302. Exercise of Conversion Privilege...................71
SECTION 1303. Fractions of Shares................................72
SECTION 1304. Adjustment of Conversion Price.....................72
SECTION 1305. Notice of Adjustments of Conversion Price..........79
SECTION 1306. Notice of Certain Corporate Action.................79
SECTION 1307. Company to Reserve Common Stock....................80
SECTION 1308. Taxes on Conversions...............................80
SECTION 1309. Covenant as to Common Stock........................81
SECTION 1310. Cancellation of Converted Securities...............81
SECTION 1311. Provisions of Consolidation, Merger or Sale
of Assets.........................................81
SECTION 1312. Trustee's Disclaimer...............................82
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ARTICLE FOURTEEN
Right to Require Repurchase..........................................82
SECTION 1401. Right to Require Repurchase........................82
SECTION 1402. Notice; Method of Exercising Repurchase Right......82
SECTION 1403. Deposit of Repurchase Price........................83
SECTION 1404. Securities Not Repurchased on Repurchase Date......84
SECTION 1405. Securities Repurchased in Part.....................84
SECTION 1406. Certain Definitions................................84
ARTICLE FIFTEEN
Guarantees...........................................................85
SECTION 1501. Unconditional Guarantees...........................85
SECTION 1502. Addition of Guarantors.............................85
SECTION 1503. Subordination of Guarantees........................85
EXHIBIT A - Initial Guarantors
EXHIBIT B - Form of Guarantee Agreement
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INDENTURE
THIS INDENTURE, dated as of December __, 1997, is between KCS ENERGY,
INC., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal executive offices
at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, and State Street Bank and
Trust Company, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its ____%
Convertible Subordinated Notes due 2004 (herein called the "Securities") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
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(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America, and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required and
permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation;
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision;
(5) the term "merger" includes a statutory share exchange and
the term "merged" has a correlating meaning;
(6) the masculine gender includes the feminine and the neuter;
(7) references to agreements and other instruments include
subsequent amendments thereto; and
(8) a "day" means a calendar day.
Certain terms used in Articles Twelve and Thirteen are defined in such
Articles.
"Act," when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the possession,
directly or indirectly, of the power to direct the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
The term "Beneficial Owner" shall be determined in accordance with Rule
13d-3, promulgated by the Commission under the Exchange Act.
"Board of Directors" means either the Board of Directors of the Company
or any duly authorized committee of that Board.
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"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in Hartford, Connecticut
or New York, New York are authorized or obligated to close by law or executive
order.
"Change in Control" has the meaning specified in Section 1406.
"Commission" means the Securities and Exchange Commission as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means the common stock, $0.01 par value per share, of
the Company as constituted 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
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
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Chief Financial Officer, Controller, Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in Hartford,
Connecticut, which initially shall be 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, at which at any particular time its corporate trust business
shall principally be administered.
"Corporation" means a corporation, association, limited liability
company, joint-stock company or business trust.
"Current Market Price" has the meaning specified in Section 1304(h).
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"DTC" has the meaning specified in Section 305.
"Default" means any event, act or condition that is, or after notice or
passage of time or both would become, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Definitive Security" means a Security or Securities that are in the
form of the Security set forth in Sections 202, 203 and 204 hereof, but not
including the additional language referred to in footnote 1 or the additional
schedule referred to in footnote 2.
"Depositary" has the meaning specified in Section 305.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Global Security" means a Security or Securities in the form of the
Security set forth in Sections 202, 203 and 204 hereof containing the legend
specified for a Global Security, the additional language referred to in footnote
1 and the additional schedule referred to in footnote 2.
"Guarantee" means each of the guarantees of the Securities by the
Guarantors made pursuant to the Guarantee Agreement.
"Guarantee Agreement" means that certain Guarantee Agreement of even
date herewith between the Trustee and the Guarantors.
"Guarantor" means each of the Wholly-owned Significant Subsidiaries set
forth on Exhibit A hereto and each other Person that hereafter becomes, or comes
into existence as, a Wholly-owned Significant Subsidiary (and in each case any
successor thereto) until it is no longer (i) a Significant Subsidiary (as
certified to the Trustee in an Officers' Certificate) or (ii) a member of an
affiliated group (within the meaning of Section 279(g) of the Internal Revenue
Code of 1986, as amended) which includes the Company, including, without
limitation, upon the sale or disposition (whether by merger, stock purchase,
asset sale or otherwise) of such Guarantor.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
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"Interest Payment Date" means the Stated Maturity of an instalment of
interest on the Securities.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity thereof or by declaration of
acceleration, redemption or otherwise.
"Officers' Certificate" means a certificate, in form reasonably
satisfactory to the Trustee, signed by the Chairman of the Board, the Chief
Executive Officer, the President or a Vice President, and by the Chief Financial
Officer, Controller, Treasurer, the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 1005 shall be the principal executive,
financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion, in form reasonably
satisfactory to the Trustee, of counsel, who may be counsel for or an employee
of the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount have been
theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided, however, that if such Securities,
or portions thereof, are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any
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such request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall 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 other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and premium, if any, or interest on any Securities on behalf of the
Company.
"Person" means any individual, Corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Record Date" means either a Regular Record Date or a Special Record
Date, as applicable.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture on the applicable Redemption Date.
"Regular Record Date," for the interest payable on any Interest Payment
Date means the ____________ or____________ (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Repurchase Date" has the meaning specified in Section 1401.
"Repurchase Event" has the meaning specified in Section 1406.
"Repurchase Price" has the meaning specified in Section 1401.
"Responsible Officer" means, when used with respect to the Trustee, the
chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president
(whether or not designated by numbers or words added before or after the title
"vice president"), the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant cashier, any assistant secretary, any
assistant treasurer, or any other officer or
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assistant officer of the Trustee customarily performing functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.
"Securities Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305(a).
"Senior Indebtedness" of a Person means all indebtedness of such Person
for money borrowed, whether outstanding on the date of the execution of this
Indenture or thereafter created, incurred or assumed, except any indebtedness
that by the terms of the instrument or instruments by which such indebtedness
was created or incurred expressly provides that it (i) is junior in right of
payment to the Securities or (ii) ranks pari passu in right of payment with the
Securities. For the purposes of this definition, "indebtedness for money
borrowed" when used with respect to such Person means (i) any obligation of, or
any obligation guaranteed by, such Person for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, (ii) any deferred payment obligation of, or any such obligation
guaranteed by, such Person for the payment of the purchase price of property or
assets evidenced by a note or similar instrument, (iii) any obligation of, or
any such obligation guaranteed by, such Person for the payment of rent or other
amounts under a lease of property or assets which obligation is required to be
classified and accounted for as a capitalized lease on the balance sheet of such
Person under generally accepted accounting principles, (iv) any obligation of,
or any such obligation which is guaranteed by, such Person for the reimbursement
of any obligor of any letter of credit, banker's acceptance or similar credit
transaction, (v) any obligation of, or any such obligation which is guaranteed
by, such Person under interest rate swaps, caps, collars, options and similar
arrangements, (vi) any obligation of the Company under any foreign exchange
contract, currency or commodity swap agreement, futures contract, currency or
commodity option contract or other foreign currency or commodity hedge and (vii)
any interest, fees, penalties and other obligations in respect of any obligation
referred to in the foregoing clauses (i)-(vi).
"Significant Subsidiary" means each Subsidiary that has assets,
businesses, divisions, real property or equipment with a fair market value (as
determined in good faith by the Board of Directors) in excess of $1,000,000.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
instalment of interest thereon, means the date specified in such Security as the
fixed date on which the principal of such Security or such instalment of
interest is due and payable.
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"Subsidiary" means (i) a corporation a majority of whose outstanding
Voting Stock is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries or by the Company and one or more other Subsidiaries or (ii)
any other Person (other than a corporation), including, without limitation, a
joint venture, in which the Company, one or more other Subsidiaries or the
Company and one or more other Subsidiaries, directly or indirectly, have at
least a majority ownership interest entitled to vote in the election of
directors, managers or trustees thereof (or other Persons performing similar
functions).
"Termination of Trading" has the meaning specified in Section 1406.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Underwriters" means the underwriters named in Schedule I to the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement dated
December ___, 1997 between the Company and the Underwriters.
"Vice President," when used with respect to the Company means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
"Voting Stock" means any class or classes of capital stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingencies).
"Wholly-owned Significant Subsidiary" means a Significant Subsidiary
all the capital stock of which (other than director's qualifying shares) is
owned directly by the Company.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of
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Counsel, if to be given by counsel, and shall comply with the requirements of
the Trust Indenture Act and any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual or firm 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
or such firm, he has or they have made such examination or
investigation as is necessary to enable him or them 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 or such firm, such condition or covenant has been complied
with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any Person may certify to
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 certification 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 of public officials or 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.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given
or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in
person or by agents 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 Holders signing such
instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof. Where such execution is by a signer acting
in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
(c) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or
to vote on any action, authorized or permitted to be given or taken by
Holders. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the
case of any such vote, prior to such vote, the record date for any such
action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section
701) prior to such first solicitation or vote, as the case may be. With
regard to any record date, only the Holders on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the
relevant action. 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 Act by the Holders pursuant to Section 501,
502 or 512.
(d) The ownership of Securities shall be proved by the
Security Register.
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(e) Any Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security
issued upon the registration of transfer therefor 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.
(f) 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 different part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any Act of Holders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing (in the English language) to or with the Trustee at
its Corporate Trust Office, Attention: Corporate Trust Department, or
at any other address previously furnished in writing to the Holders and
the Company by the Trustee; or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing (in the English language) and mailed,
registered or certified with postage prepaid, to the Company, addressed
to it at the address of its principal executive offices specified in
the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the United States mail, registered or certified with postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by nationally
recognized overnight air courier guaranteeing next day delivery.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing (in the English language) to each
Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. Where this
Indenture provides for notice in any
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manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver. All such notices and
communications shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, registered or certified with postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by nationally recognized overnight air courier guaranteeing
next day delivery.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act or another provision that would be required or deemed
under such Act to be a part of and govern this Indenture if this Indenture were
subject thereto, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and the
Trustee shall bind each of their respective successors and assigns, whether so
expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. 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 Holders of Securities and, with
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respect to Article Twelve, the holders of Senior Indebtedness, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert his Securities shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal and premium, if any, or conversion of the Securities 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 Interest Payment Date or Redemption Date, or
at the Stated Maturity, or on such last day for conversion; provided, however,
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be, to the
next succeeding Business Day.
SECTION 114. Limitation on Individual Liability.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or of any successor Person, 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, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, shareholders, officers or
directors, as such, of the Company or of any successor Person, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any Security or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, shareholder, officer or director, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Security.
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ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificate of authentication shall be
in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any organizational document, any applicable law or with
the rules of any securities exchange on which the Securities are listed or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.
Unless issued in definitive form, Securities shall be issued in the
form of one or more Global Securities, the face of which shall be in the form
set forth in Section 202 hereof and the reverse of which shall be in the form
set forth in Section 203 hereof. Each Global Security shall be deposited on
behalf of the holders of the Securities represented thereby with the Trustee, as
custodian for the Depositary, and registered in the name of the nominee of the
Depositary, duly executed by the Company and authenticated as provided for
herein.
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
and redemptions. 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 Trustee or the Securities Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof.
The Securities shall be printed, lithographed or engraved or produced
by any combination of these methods or may be produced in any other manner
permitted by the rules of any securities exchange on which the Securities may be
listed or by the Depositary, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 202. Form of Face of Security.
LEGEND FOR GLOBAL SECURITY:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
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DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
KCS ENERGY, INC.
CUSIP No. ___________
_____% Convertible Subordinated Note due 2004
No. ________ $___________
KCS Energy, Inc., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company," which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to __________________________, or registered
assigns, the principal sum of ________________ Dollars [or such greater or
lesser amount as indicated on the Schedule of Exchanges of Securities on the
reverse hereof]1 on ____________, 2004, and to pay interest thereon from
_____________, 1997 or from and including the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually on _________
and __________ in each year, commencing ____________, 1998 at the rate of _____%
per annum, until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the _____________ or __________ (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture. Notice of a Special
Record Date shall be given to Holders of Securities not less than 10 days prior
to such Special Record Date. Payment of the principal of and premium, if any,
and interest on this Security will be made (i) in respect of Securities held
--------
1 This phrase should be included only if the Security is issued in global
form.
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of record by the Depositary or its nominee in same day funds on or prior to the
respective payment dates and (ii) in respect of Securities held of record by
Holders other than the Depositary or its nominee at the office or agency of the
Company maintained for that purpose in The City of New York pursuant to Section
1003 of the Indenture, in each case in such coin or currency of the United
States of America as of the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest in respect of Securities held of record by Holders other
than the Depositary or its nominee may be made by check mailed on or before the
due date to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _________________ KCS ENERGY, INC.
By _________________________
Attest:
------------------------
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of the
Company designated as its _____% Convertible Subordinated Notes due 2004 (herein
called the "Securities"), limited in aggregate principal amount to $143,750,000
(including Securities issuable pursuant to the Underwriters' over-allotment
option, as provided for in the Underwriting Agreement dated December ___, 1997
between the Company and the Underwriters named therein), issued and to be issued
under an Indenture, dated as of December ___, 1997 (herein called the
"Indenture"), between the Company and State Street Bank and Trust Company, as
Trustee (herein called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior
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Indebtedness of the Company and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or before
the close of business on _________, 2004 or in case this Security or a portion
hereof is called for redemption or delivered for repurchase, then in respect of
this Security or such portion hereof until and including, but (unless the
Company defaults in making the payment due upon redemption) not after, the close
of business on the second Business Day preceding the Redemption Date or
Repurchase Date, to convert this Security (or any portion of the principal
amount hereof which is $1,000 or an integral multiple thereof), at the principal
amount hereof, or of such portion, into fully paid and non-assessable shares
(calculated as to each conversion to the nearest 1/100th of a share) of Common
Stock at a conversion price equal to $_____ principal amount for each share of
Common Stock (or at the current adjusted conversion price if an adjustment has
been made as provided in the Indenture) by surrender of this Security, duly
endorsed or assigned to the Company or in blank, to the Company at its office or
agency maintained for that purpose pursuant to Section 1003 of the Indenture,
accompanied by written notice to the Company and the Trustee in the form
provided in this Security (or such other notice as is acceptable to the Company)
that the Holder hereof elects to convert this Security, or if less than the
entire principal amount hereof is to be converted, the portion hereof to be
converted, and, in case such surrender shall be made during the period after the
close of business on any Regular Record Date next preceding any Interest Payment
Date to the close of business on such Interest Payment Date (unless this
Security or the portion thereof being converted has been called for redemption),
also accompanied by payment in New York Clearing House funds, or other funds
acceptable to the Company, of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being
converted. Subject to the aforesaid requirement for payment and, in the case of
a conversion after the Regular Record Date next preceding any Interest Payment
Date and on or before such Interest Payment Date, to the right of the Holder of
this Security (or any Predecessor Security) of record at such Regular Record
Date to receive an instalment of interest (with certain exceptions provided in
the Indenture), no payment or adjustment is to be made upon conversion on
account of any interest accrued hereon or on account of any dividends on the
Common Stock issued upon conversion. No fractional shares or scrip representing
fractions of shares will be issued on conversion, but instead of any fractional
share the Company shall pay a cash adjustment as provided in the Indenture. The
conversion price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the sale or other transfer of all or
substantially all of the properties and assets of the Company, this Security, if
then outstanding, will be convertible thereafter, during the period this
Security shall be convertible as specified above, only into the kind and amount
of securities, cash and other property receivable upon the consolidation,
merger, sale or transfer by a holder of the number of shares of Common Stock
into which this Security might have been converted immediately prior to such
consolidation, merger, sale or transfer (assuming such holder of Common Stock
failed to exercise any rights of election and received per share the kind and
amount received per share by a plurality of non-electing shares).
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The Securities are subject to redemption upon not less than 30 and not
more than 60 days' notice by mail, at any time on or after ____________, 2000,
as a whole or in part, at the election of the Company, at the Redemption Prices
set forth below (expressed as percentages of the principal amount), plus accrued
and unpaid interest to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date).
If redeemed during the 12-month period beginning ___________ in the
year indicated, the Redemption Price shall be:
Year Redemption
----
Price
-----
2000............ %
2001............ %
2002............ %
2003............ %
In certain circumstances involving the occurrence of a Repurchase Event
(as defined in the Indenture), the Holder hereof shall have the right to require
the Company to repurchase this Security at 100% of the principal amount hereof,
together with accrued and unpaid interest to the Repurchase Date, but interest
installments whose Stated Maturity is on or prior to such Repurchase Date will
be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.
In the event of redemption, repurchase or conversion of this Security
in part only, a new Security or Securities for the unredeemed, unpurchased or
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
The indebtedness evidenced by this Security is, in all respects,
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness of the Company, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided, and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the unpaid
principal of and premium, if any, on all the Securities may be declared (or, in
the case of an Event of Default relating to the bankruptcy, insolvency or
reorganization of the Company or any Guarantor, shall become) due and payable in
the manner and with the effect provided in the Indenture.
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The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding, and, under certain limited circumstances, by the Company and the
Trustee without the consent of the Holders. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in fully registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange except as provided in the Indenture, and the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, except as provided in this Security, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
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Each of the Company's Wholly-owned Significant Subsidiaries has
unconditionally guaranteed, jointly and severally, the Company's obligations
under the Securities pursuant to the Guarantee Agreement. The indebtedness
represented by such guarantees is subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness of such Subsidiaries.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture. The Company will
furnish to any Holder upon written request and without charge a copy of the
Indenture.
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[FORM OF CONVERSION NOTICE]
TO: KCS ENERGY, INC.
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (which is
$1,000 or a multiple thereof) designated below, into shares of Common Stock in
accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon the conversion, together
with any check in payment for a fractional share and any Security representing
any unconverted principal amount hereof, be issued and delivered to the
registered owner hereof unless a different name has been provided below. If this
Notice is being delivered on a date after the close of business on a Regular
Record Date and prior to the close of business on the related Interest Payment
Date, this Notice is accompanied by payment in New York Clearing House funds, or
other funds acceptable to the Company, of an amount equal to the interest
payable on such Interest Payment Date on the principal of this Security to be
converted (unless this Security has been called for redemption). If shares or
any portion of this Security not converted are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto.
Dated:
------------------------ --------------------------------
--------------------------------
Signature(s)
Signature(s) must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Trustee or agent responsible for conversion,
which requirements include the membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such "signature guarantee
program" as may be determined by the Trustee in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, if shares of Common Stock are to be delivered, or Securities are to be
issued, other than to and in the name of the registered owner.
------------------------------
Signature Guarantee
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Fill in for registration of shares of Common Stock if they are to be
delivered, or Securities if they are to be issued, other than to and in the name
of the registered owner:
--------------------------------- ------------------------------------
(Name) Social Security or other Taxpayer
Identification Number of owner
------------------------------
(Street Address)
------------------------------
(City, State and zip code)
(Please print name and address)
Register: Common Stock
-----
Securities
-----
(Check appropriate line(s).)
Principal amount to be converted
(if less than all):
$__________,000
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[ASSIGNMENT FORM]
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
---------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
and irrevocably appoint
------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date: Your signature:
------------------ -----------------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
---------------------------------------------------------
Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of
the Trustee, which requirements include the membership or
participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such "signature guarantee program" as
may be determined by the Trustee in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 1401 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Security (which is $1,000 or an
integral multiple thereof) purchased by the Company pursuant to Section 1401 of
the Indenture, state the amount you wish to have purchased:
$
--------------------
An election made pursuant to this notice is irrevocable.
Date: Your Signature(s):
------------------ --------------------
Tax Identification No.:
---------------
(Sign exactly as your name appears on the face of this Security.)
Signature Guarantee:
---------------------------------------------------------
Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Trustee, which requirements include the
membership or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such "signature guarantee program" as may be determined by the
Trustee in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
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[FORM OF SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES2]
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
PRINCIPAL AMOUNT OF SIGNATURE OF AUTHORIZED
AMOUNT OF DECREASE AMOUNT OF INCREASE THIS GLOBAL SECURITY OFFICER
DATE OF IN PRINCIPAL AMOUNT IN PRINCIPAL AMOUNT FOLLOWING SUCH OF TRUSTEE OR SECURITIES
EXCHANGE OF THIS GLOBAL SECURITY OF THIS GLOBAL SECURITY DECREASE (OR INCREASE) CUSTODIAN
-------- ------------------------ ----------------------- ---------------------- ---------
SECTION 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By
------------------------------------
Authorized Signatory
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
----------
(2) This Schedule should be included only if the Security is issued in
global form.
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The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to $143,750,000 (including
$18,750,000 aggregate principal amount of Securities that may be sold to the
Underwriters by the Company upon exercise of the over-allotment option granted
pursuant to the Underwriting Agreement), except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 304, 305, 306, 906, 1108, 1302 or 1405.
The Securities shall be known and designated as the "_____% Convertible
Subordinated Notes due 2004" of the Company. Their Stated Maturity shall be
_____________, 2004 and they shall bear interest at the rate of _____% per
annum, from _____________, 1997 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, as the case may be, payable
semi-annually on ___________ and _____________, commencing ___________, 1998,
until the principal thereof is paid or made available for payment.
The principal of and premium, if any, and interest on the Securities
shall be payable (i) in respect of Securities held of record by the Depositary
or its nominee in same day funds on or prior to the respective payment dates and
(ii) in respect of Securities held of record by Holders other than the
Depositary or its nominee at the office or agency of the Company maintained for
such purpose in The City of New York pursuant to Section 1003; provided,
however, that, at the option of the Company, payment of interest to Holders of
record other than the Depositary may be made by check mailed on or before the
due date to the address of the Person entitled thereto as such address shall
appear in the Security Register.
The Securities shall be redeemable as provided in Article Eleven.
The Securities shall be subordinated in right of payment to Senior
Indebtedness of the Company as provided in Article Twelve.
The Securities shall be convertible as provided in Article Thirteen.
The Securities shall be subject to repurchase at the option of the
Holder as provided in Article Fourteen.
The Securities shall be guaranteed by the Company's Wholly-owned
Significant Subsidiaries as provided in Article Fifteen and the Guarantee
Agreement.
SECTION 302. Denominations.
The Securities shall be issuable only in fully registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
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The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President, its Chief
Financial Officer or one of its Vice Presidents, under its corporate seal or a
facsimile thereof reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall either at one time or from time to time pursuant
to such instructions as may be described therein authenticate and deliver such
Securities as in this Indenture provided and not otherwise. Such Company Order
shall specify the amount of Securities to be authenticated and each date on
which the original issue of Securities is to be authenticated, and shall certify
that all conditions precedent to the issuance of such Securities contained in
this Indenture have been complied with. The aggregate principal amount of
Securities Outstanding at any time may not exceed the amount set forth above
except as provided in Section 306.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed on behalf of the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of the Indenture. The Trustee may appoint an Authenticating Agent
pursuant to the terms of Section 614.
SECTION 304. Temporary Securities.
Pending the preparation of Definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the Definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities. Every such temporary Security shall be executed by
the Company and shall be authenticated and delivered by the Trustee upon the
same conditions and in substantially the same manner, and with the same effect,
as the Definitive Security or Securities in lieu of which it is issued.
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If temporary Securities are issued, the Company will cause Definitive
Securities to be prepared without unreasonable delay. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1003, 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 one or more Definitive Securities of a like
principal amount of authorized denominations. Until so exchanged the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as Definitive Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
(a) The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register maintained in such
office and in any other office or agency designated pursuant to Section
1003 being herein sometimes collectively 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 of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided. At all reasonable times the
Security Register shall be open for inspection by the Company.
The Company initially appoints The Depository Trust Company
("DTC") to act as depositary (the "Depositary") with respect to each
Global Security.
The Company initially appoints the Trustee to act as
Securities Custodian with respect to each Global Security.
(b) With respect to the transfer and exchange of
Definitive Securities, when Definitive Securities are presented to the
Security Registrar with the request (x) to register the transfer of the
Definitive Securities or (y) to exchange such Definitive Securities for
an equal principal amount of Definitive Securities of other authorized
denominations, the Security Registrar shall register the transfer or
make the exchange as requested if its requirements for such
transactions are met; provided, however, that the Definitive Securities
presented or surrendered for register of transfer or exchange shall be
duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Security Registrar duly executed by the Holder
thereof or by its attorney, duly authorized in writing.
(c) The following restrictions apply to any transfer of a
Definitive Security for a beneficial interest in a Global Security. A
Definitive Security may not be exchanged for a beneficial interest in a
Global Security except until and upon satisfaction of the requirements
set forth below. Upon receipt by the Trustee of a Definitive Security,
duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with written instructions
directing the Trustee to make, or to direct the
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Securities Custodian to make, an endorsement on the Global Security to
reflect an increase in the aggregate principal amount of the
Securities represented by the Global Security, then the Trustee shall
cancel such Definitive Security and cause, or direct the Securities
Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities
Custodian, the aggregate principal amount of Securities represented by
the Global Security to be increased accordingly. If no Global
Securities are then outstanding, the Company shall execute and, upon
receipt of an authentication order in the form of a Company Order in
accordance with Section 303, the Trustee shall authenticate a new
Global Security in the appropriate principal amount.
(d) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depositary,
in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary
therefor.
(e) With respect to the transfer of a beneficial interest
in a Global Security for a Definitive Security:
(i) Any Person having a beneficial interest in a
Global Security may upon request exchange such beneficial
interest for a Definitive Security. Upon receipt by the
Trustee of written instructions (or such other form of
instructions as is customary for the Depositary) from the
Depositary or its nominee on behalf of any Person having a
beneficial interest in a Global Security, then the Trustee or
the Securities Custodian, at the direction of the Trustee,
will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities
Custodian, the aggregate principal amount of the Global
Security to be reduced and, following such reduction, the
Company will execute and, upon receipt of an authentication
order in the form of a Company Order in accordance with
Section 303, the Trustee will authenticate and deliver to the
transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for
a beneficial interest in a Global Security pursuant to this
Section 305 shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Securities to the Persons in whose
names such Securities are so registered.
(f) Notwithstanding any other provisions of this
Indenture (other than the provisions set forth in subsection (g) of
this Section 305), a Global Security may not be transferred as a whole
except by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.
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(g) If at any time the Depositary for the Securities
notifies the Company that the Depositary is unwilling or unable to
continue as Depositary for the Global Securities and a successor
Depositary for the Global Securities is not appointed by the Company
within 90 days after delivery of such notice, then the Company will
execute, and the Trustee, upon receipt of a Company Order in accordance
with Section 303 requesting the authentication and delivery of
Definitive Securities, will authenticate and deliver Definitive
Securities, in an aggregate principal amount equal to the principal
amount of the Global Securities, in exchange for such Global
Securities.
(h) At such time as all beneficial interests in a Global
Security have either been exchanged for Definitive Securities,
redeemed, repurchased or cancelled, such Global Security shall be
returned to or retained and cancelled by the Trustee. At any time prior
to such cancellation, if any beneficial interest in a Global Security
is exchanged for Definitive Securities, redeemed, repurchased or
cancelled, the principal amount of Securities represented by such
Global Security shall be reduced and an endorsement shall be made on
such Global Security, by the Trustee or the Securities Custodian, at
the direction of the Trustee, to reflect such reduction.
(i) All Definitive Securities and Global Securities
issued upon any registration of transfer or exchange of Definitive
Securities or Global Securities shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Definitive Securities or Global Securities
surrendered upon such registration of transfer or exchange.
To permit registrations of transfer and exchanges, the Company shall
execute and the Trustee shall authenticate Definitive Securities and Global
Securities at the Security Registrar's request.
No service charge to a Holder shall be made for any registration of
transfer or exchange of Securities except as provided in Section 306. The
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed, and any other expenses (including the
fees and expenses of the Security Registrar and the Trustee) that may be
payable, in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906, 1108 or 1302 not
involving any transfer.
The Company or the Security Registrar shall not be required (i) to
issue, register the transfer of or exchange any Security 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 1104
and ending at the close of business on the day of such mailing or (ii) to
register the transfer of or exchange any Definitive Security or beneficial
interest in any Global Security so selected for redemption in whole or in part,
except the unredeemed portion of any Definitive Security being redeemed in part.
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SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding. The Trustee may charge the Company for the Trustee's expenses in
replacing such Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest. Payment
of interest will be made (i) in respect of Securities held by the Depositary or
its nominee, in same day funds on or prior to the respective Interest Payment
Dates and (ii) in respect of Securities held of record by Holders other than the
Depositary or its nominee, at such office or agency of the Company in The City
of New York as it shall maintain for that purpose pursuant to
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Section 1003; provided, however, that, at the option of the Company, interest on
any Security held of record by Holders other than the Depositary or its nominee
may be paid by mailing checks on or before the relevant Interest Payment Date to
the addresses of the Holders thereof as such addresses appear in the Securities
Register.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee 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
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carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
In the case of any Security which is surrendered for conversion during
the period after the close of business on any Regular Record Date to the close
of business on the next succeeding Interest Payment Date, interest whose Stated
Maturity is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest (whether or not
punctually paid or duly provided for) 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 such Regular Record Date; provided, however, that Securities so
surrendered for conversion shall (except in the case of Securities or portions
thereof called for redemption) be accompanied by payment in New York Clearing
House funds or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount being
surrendered for conversion. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and premium, if
any, and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer, exchange or conversion shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. 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.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
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ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as expressly provided for in this Article Four), and the Trustee, 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 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 1004) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at
their Stated Maturity within one year, or
(iii) are to be called for redemption
within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,
and the Company, in the case of clause (i), (ii) or (iii)
above, has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose an
amount in cash sufficient (without consideration of any
investment of such cash) 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 to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be, provided that
the Trustee shall have been irrevocably instructed to apply
such amount to said payments with respect to the Securities;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
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(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
following rights or obligations under the Securities and this Indenture shall
survive until otherwise terminated or discharged hereunder: (a) Article
Thirteen, Article Fourteen and the Company's obligations under Sections 304,
305, 306, 1002, 1003 and 1004, in each case with respect to any Securities
described in subclause (B) of clause (1) of this Section, (b) this Article Four,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder,
including the obligations of the Company to the Trustee under Section 607, and
the obligations of the Trustee to any Authenticating Agent under Section 614 and
(d) if money shall have been deposited with the Trustee pursuant to subclause
(B) of clause (1) of this Section, the rights of Holders of any Securities
described in subclause (B) of clause (1) of this Section to receive, solely from
the trust fund described in such subclause (B), payments in respect of the
principal of, and premium (if any) and interest on, such Securities when such
payment are due.
SECTION 402. Application of Trust Money.
Subject to the provisions of Section 506 and the last paragraph of
Section 1004, all money deposited with the Trustee pursuant to Section 401 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) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
premium, if any, and interest for whose payment such money has been deposited
with the Trustee. All money deposited with the Trustee pursuant to Section 401
(and held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
SECTION 403. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article Four by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Four until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust with respect to the Securities;
provided, however, that if the Company makes any payment of principal of or any
premium or interest on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of the
Securities to receive such payment from the money so held in trust.
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ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Twelve or 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 the principal of or
premium, if any, on any Security at its Maturity, whether or not such
payment is prohibited by the provisions of Article Twelve; or
(2) default in the payment of any interest upon any
Security when it becomes due and payable, whether or not such payment
is prohibited by the provisions of Article Twelve, and continuance of
such default for a period of 30 days; or
(3) default in the payment of the Redemption Price in
respect of any Security on the Redemption Date therefor in accordance
with the provisions of Article Eleven, whether or not such payment is
prohibited by the provisions of Article Twelve; or
(4) failure to provide timely notice of a Repurchase
Event as required in accordance with the provisions of Article
Fourteen; or
(5) default in the payment of the Repurchase Price in
respect of any Security on the Repurchase Date therefor in accordance
with the provisions of Article Fourteen, whether or not such payment is
prohibited by the provisions of Article Twelve; or
(6) default in the performance, or breach, of any
covenant of the Company in this Indenture (other than a covenant 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 60 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 aggregate
principal amount of the Outstanding Securities 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
(7) default under one or more bonds, debentures, notes or
other evidences of indebtedness for money borrowed by the Company or
any Subsidiary or under one or more mortgages, indentures or
instruments under which there may be issued or by which there may
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be secured or evidenced any indebtedness for money borrowed by the
Company or any Subsidiary, whether such indebtedness exists on the date
of this Indenture or shall hereafter be created, which default
individually or in the aggregate shall constitute a failure to pay the
principal of indebtedness in excess of $10,000,000 when due and payable
after the expiration of any applicable grace period with respect
thereto or shall have resulted in indebtedness in excess of $10,000,000
becoming or being declared due and payable prior to the date on which
it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 30 days after there shall
have 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 aggregate principal amount of the Outstanding Securities a
written notice specifying such default and requiring the Company to
cause such indebtedness to be discharged or cause such acceleration to
be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(8) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
or any Guarantor in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or any
Guarantor a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Guarantor under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Company or any Guarantor or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive
days; or
(9) the commencement by the Company or any Guarantor of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of the Company or any Guarantor in an involuntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State law, or the consent by
it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Guarantor
or of any substantial part of its property, or the making by it of a
general 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 or any Guarantor
in furtherance of any such action.
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Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 501, 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 Business 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, however, that unless such Notice of Default shall have become
effective by virtue of the Holders of the requisite aggregate 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 force or effect.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than as specified in subparagraph (8) or
(9) of Section 501) 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 all unpaid principal of and premium, if any,
on all the Securities to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by Holders), and upon any such
declaration such principal and premium plus any interest accrued and unpaid on
the Securities to the date of declaration shall become immediately due and
payable. If an Event of Default specified in subparagraph (8) or (9) of Section
501 occurs and is continuing, then the principal of, premium, if any, and
accrued and unpaid interest, if any, on all of the Securities shall become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder of Securities.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in aggregate principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of and premium, if any, on any
Securities which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Securities,
(C) to the extent that payment of such interest
is lawful, interest upon overdue interest at the rate borne by
the Securities, and
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(D) all sums paid or advanced by the Trustee and
each predecessor Trustee, their respective agents and counsel
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee and each predecessor
Trustee, their respective agents and counsel;
and
(2) all Events of Default, other than the nonpayment of
the principal of, premium, if any, and interest on the Securities that
have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission and waiver 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 502,
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 Business 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, however, that
unless such declaration, or rescission and annulment, as the case may be, shall
have become effective by virtue of Holders of the requisite aggregate 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
force or effect.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and premium, if any, and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and premium, if any, and on any overdue interest, at the rate
borne
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by the Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
each predecessor Trustee, their respective agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 607.
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 any 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 money adjudged or decreed to be payable in the manner provided by law out of
the property of the Company (or any other obligor upon the 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 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 504. 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 the claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it and
each predecessor Trustee for the reasonable compensation, expenses,
disbursements and advances of the Trustee and each predecessor Trustee and their
respective agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a member of the
Creditors' Committee.
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SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee and each predecessor Trustee and their
respective agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or premium, if
any, or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: Subject to Article Twelve, to the holders of Senior
Indebtedness of the Company;
SECOND: To payment of all amounts due the Trustee under
Section 607;
THIRD: To the payment of the amounts then due and unpaid for
principal of and premium, if any, and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal and premium, if any, and interest, respectively; and
FOURTH: The balance, if any, to the Company for the benefit of
the Company or any other Person or Persons determined to be entitled
thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate
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;
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(3) such Holder or Holders have offered to the Trustee
reasonable indemnity satisfactory to it 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 aggregate principal amount of the Outstanding
Securities; it being understood and intended that no one or more
Holders shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders, or to obtain or to seek to
obtain priority or preference over any other Holders or to enforce any
right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, 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
307) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date or, in the
case of a repurchase pursuant to Article Fourteen, on the Repurchase Date) and
to convert such Security in accordance with Article Thirteen and to institute
suit for the enforcement of any such payment and right to convert, and such
rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise.
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The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate 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, however, that:
(1) such direction shall not be in conflict with any rule
of law or with this Indenture; and
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction; and
(3) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall determine that the action so directed would
involve the Trustee in personal liability or would be unduly
prejudicial to Holders not joining in 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 the purpose
of 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, however, that unless such direction shall have
become effective by virtue of Holders of the requisite aggregate 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 direction shall automatically and without any action by any Person be
canceled and of no further force or effect.
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SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities may on behalf of the Holders of all the Securities
waive any past default hereunder and its consequences, except a default
(1) in the payment of the principal of or premium, if
any, or interest on any Security, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent of
the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, however, 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,
in any suit instituted by the Trustee, a suit by a Holder pursuant to Section
508, or a suit by a Holder or Holders of more than 10% in aggregate principal
amount of the Outstanding Securities.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
this Indenture and the Trust Indenture Act for securities issued pursuant to
indentures qualified thereunder. Except as otherwise provided herein,
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 or risk 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 satisfactory to it
against such risk or liability is not reasonably assured to it. Whether or not
herein
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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. The Trustee shall not be liable (x)
for any error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts or (y) with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in aggregate principal
amount of the Securities at the time Outstanding relating to the time, method
and place of conducting any proceeding or any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture. Prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred: (i) the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Indenture and in the Trust Indenture Act, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture and in the Trust Indenture Act, and no
implied covenants or obligations shall be read in to this Indenture against the
Trustee; and (ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture and believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties; but in the case of any such
statements, certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform on their
face to the requirements of this Indenture. If a default or an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in its
exercise thereof as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder
known to it as and to the extent provided by the Trust Indenture Act; provided,
however, that, except in the case of a default in payment of principal of,
premium, if any, or interest on any Securities, the Trustee may withhold notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of
Securities. 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 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
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paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable
security or indemnity satisfactory to it against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(f) before the Trustee acts or refrains from acting with
respect to any matter contemplated by this Indenture, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to
the provisions of Section 102, and the Trustee shall be protected and
shall not be liable for any action it takes or omits to take in good
faith and without gross negligence in reliance on such certificate or
opinion;
(g) the Trustee shall not be required to give any bond or
surety in respect of the performance of its power and duties hereunder;
(h) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or
by agent or attorney; and
(i) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
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SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The statements and recitals contained herein and in the Securities and
in any other document in connection with the sale of the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee and any Authenticating Agent assume 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 and any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company or any Affiliate of the Company
with the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in trust hereunder need
not be segregated from other funds except to the extent required by law. The
Trustee or any Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (including its
services as Security Registrar or Paying Agent, if so appointed by the
Company) as may be mutually agreed upon in writing by the Company and
the Trustee (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 and each predecessor Trustee promptly upon its
request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in connection with the
performance of its duties under any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel and all other persons not
regularly in its employ) except to the extent any such expense,
disbursement or advance may be attributable to its negligence or bad
faith; and
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(3) to indemnify the Trustee and each predecessor Trustee
(each an "indemnitee") for, and to hold it 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 this Indenture or the trusts hereunder and its duties
hereunder (including its services as Security Registrar or Paying
Agent, if so appointed by the Company), including enforcement of this
Indenture (including Section 607) and including the costs and expenses
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder. The Company shall defend any claim or threatened
claim asserted against an indemnitee for which it may seek indemnity,
and the indemnitee shall cooperate in the defense unless, in the
reasonable opinion of the indemnitee's counsel, the indemnitee has an
interest adverse to the Issuer or a potential conflict of interest
exists between the indemnitee and the Company, in which case the
indemnitee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel; provided, however, that
the Company shall only be responsible for the reasonable fees and
expenses of one law firm (in addition to local counsel) in any one
action or separate substantially similar actions in the same
jurisdiction arising out of the same general allegations or
circumstances, such law firm to be designated by the indemnitee.
As security for the performance of the obligations of the Company under
this Section 607, 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 the Holders of particular Securities, and the
Securities are hereby subordinated to such prior lien. The obligations of the
Company under this Section to compensate and indemnify the Trustee and any
predecessor Trustee and to pay or reimburse the Trustee and any predecessor
Trustee for expenses, disbursements and advances, and any other amounts due the
Trustee or any predecessor Trustee under Section 607, shall constitute an
additional obligation hereunder and shall survive the satisfaction and discharge
of this Indenture.
When the Trustee or any predecessor Trustee incurs expenses or renders
services in connection with the performance of its obligations hereunder
(including its services as Security Registrar or Paying Agent, if so appointed
by the Company) after an Event of Default specified in Section 501(8) or (9)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any applicable bankruptcy,
insolvency or other similar federal or state law to the extent provided in
Section 503(b)(5) of Title 11 of the United States Code, as now or hereafter in
effect.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
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SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that (i) is eligible pursuant to the Trust Indenture Act to act as such and (ii)
has (or, in the case of a corporation included in a bank holding company system,
whose related bank holding company has) a combined capital and surplus of at
least $50,000,000. If such Person publishes reports of conditions at least
annually, pursuant to law or to the requirements of a Federal or state
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a
successor Trustee required by Section 611 shall not have been delivered
to the resigning Trustee within 30 days after the giving of such notice
of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by an Act of
the Holders of a majority in aggregate principal amount of the
Outstanding Securities delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with
Section 608 after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security
for the last six months, or
(2) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
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then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee, or (ii) subject to Section 514, any Holder who has
been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee and such successor Trustee shall
comply with the applicable requirements of Section 611. 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 aggregate 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 611 become the successor Trustee and supersede the successor
Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any Holder who has
been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee
to all Holders in the manner provided in Section 106. Each notice shall
include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
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SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. Such successor Trustee shall promptly notify the
Company of its succession. 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 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents acceptable to
and at the expense of the Company which shall be authorized to act on behalf of
the Trustee to authenticate Securities issued upon original issue and upon
exchange, registration of transfer, partial conversion or partial redemption or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a Person organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
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Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any Person succeeding to the corporate agency or corporate trust
business of an Authenticating Agent, shall continue to be an Authenticating
Agent, provided such Person shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof 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 such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail notice of such
appointment by first-class mail, postage prepaid, to all Holders as their names
and addresses appear in the Security Register. Any successor Authenticating
Agent upon acceptance of its appointment under this Section 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 to act as such under the
provisions of this Section.
Any Authenticating Agent by the acceptance of its appointment shall be
deemed to have represented to the Trustee that it is eligible for appointment as
Authenticating Agent under this Section and to have agreed with the Trustee
that: it will perform and carry out the duties of an Authenticating Agent as
herein set forth, including among other things the duties to authenticate
Securities when presented to it in connection with the original issuance and
with exchanges, registrations of transfer or redemptions or conversions thereof
or pursuant to Section 306; it will keep and maintain, and furnish to the
Trustee from time to time as requested by the Trustee, appropriate records of
all transactions carried out by it as Authenticating Agent and will furnish the
Trustee such other information and reports as the Trustee may reasonably
require; and it will notify the Trustee promptly if it shall cease to be
eligible to act as Authenticating Agent in accordance with the provisions of
this Section. Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have agreed with the Trustee to indemnify the Trustee against
any loss, liability or expense incurred by the Trustee and to defend any claim
asserted against the Trustee by reason of any acts or failures to act of such
Authenticating Agent, but such Authenticating Agent shall have no liability for
any action taken by it in accordance with the specific written direction of the
Trustee.
The Trustee shall not be liable for any act or any failure of the
Authenticating Agent to perform any duty either required herein or authorized
herein to be performed by such person in accordance with this Indenture.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
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If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By
------------------------------------
As Authenticating Agent
By
------------------------------------
Authorized Signatory
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each
Regular Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished.
Notwithstanding the foregoing, so long as the Trustee is the Security Registrar,
no such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communication to Holders.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in Section
701 and the names and addresses of Holders received by the Trustee in
its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list
so furnished.
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(b) The rights of Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and duties of the Trustee,
shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names and
addresses of Holders made pursuant to the Trust Indenture Act or
otherwise in accordance with this Indenture.
SECTION 703. Reports by Trustee.
(a) Not later than 60 days following each May 15, the
Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock
exchange upon which the Securities are listed, with the Commission and
with the Company. The Company will notify the Trustee when the
Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
(a) The Company shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and
other reports, and such summaries thereof, as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; provided, however, that any such information,
documents or reports required to be filed with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with
the Commission.
(b) Whether or not the Company is subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall deliver to the Trustee and to each Holder, within 15 days
after it is or would have been required to file such with the
Commission, annual and quarterly consolidated financial statements
substantially equivalent to financial statements that would have been
included in reports filed with the Commission if the Company was
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by
the Company's certified independent public accountants as such would be
required in such reports to the Commission and, in each case, together
with a management's discussion and analysis of operations and financial
condition as such would be so required.
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ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease all or substantially all of its properties and
assets to any Person, and the Company shall not permit any Person to consolidate
with or merge into the Company, unless:
(1) in case the Company shall consolidate with or merge
into another Person or convey, transfer or lease all or substantially
all of its properties and assets to any Person, the Person formed by
such consolidation or into which the Company is merged or the Person
which acquires by conveyance or transfer, or which leases, all or
substantially all of the properties and assets of the Company shall be
a corporation, shall be organized and validly existing under the laws
of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the
principal of and premium, if any, and interest 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 and such
supplemental indenture shall also provide for conversion rights in
accordance with Section 1311;
(2) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing;
and
(3) the Company or the successor Person, if the Company
is not the continuing obligor under this Indenture, has delivered to
the Trustee an Officers' Certificate stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture
is required in connection with such transaction, such supplemental
indenture comply with this Article and an Opinion of Counsel stating
that the requirements of clause (1) of this Section 801 have been
satisfied.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or
substantially all of the properties and assets of the Company in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a transfer by lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, 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, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to cause this Indenture to be qualified under the
Trust Indenture Act; or
(2) 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
(3) to add to the covenants of the Company for the
benefit of the Holders or an additional Event of Default, or to
surrender any right or power conferred herein or in the Securities upon
the Company; or
(4) to secure the Securities; or
(5) to make provision with respect to the conversion
rights of Holders pursuant to the requirements of Section 1311; or
(6) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities; or
(7) to cure any ambiguity, to correct or supplement any
provision herein or in the Securities which may be defective or
inconsistent with any other provision herein or in the Securities, or
to make any other provisions with respect to matters or questions
arising under this Indenture which shall not adversely affect the
interests of the Holders in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the
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rights of the Holders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or
any installment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, 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 such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
modify the provisions of Article Twelve, Article Thirteen (except as
permitted by Section 901(5)) or Article Fourteen, in any case in a
manner adverse to the Holders, or
(2) reduce the percentage in aggregate principal amount
of the Outstanding Securities, the consent of whose Holders is required
for any such supplemental indenture, or
(3) modify any of the provisions of Section 513 or
Section 1007, except to increase any percentage in aggregate principal
amount of the Outstanding Securities required for any waiver or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which adversely affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
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SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and (at the specific direction of the Company) authenticated and
delivered by the Trustee in exchange for Outstanding Securities.
SECTION 907. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 902, the Company shall transmit to
the Holders a notice setting forth the substance of such supplemental indenture.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of and premium,
if any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
SECTION 1002. Guarantees of Subsidiaries.
The Company will cause each Wholly-owned Significant Subsidiary to
enter into the Guarantee Agreement, in accordance with Article Fifteen of this
Indenture.
SECTION 1003. Maintenance of Office or Agency.
The Company will maintain an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer, where Securities may be surrendered for exchange or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served, which office shall initially be
the office of the Trustee located at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx,
Connecticut
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06103. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations.
Further, if at any time there shall be no such office or agency in The City of
New York where the Securities may be presented or surrendered for payment, the
Company shall forthwith designate and maintain such an office or agency in The
City of New York, in order that the Securities shall at all times be payable in
The City of New York. The Company will give prompt written notice to the Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency.
SECTION 1004. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of and premium, if any, or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal 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.
Whenever the Company shall have one or more Paying Agents, it will, on
or prior to 11:00 a.m. (New York City time) on each due date of the principal of
and premium, if any, or interest on any Securities, deposit with a Paying Agent
a sum in same day funds sufficient to pay the principal and any premium and
interest so becoming due, such sum to be held as provided by the Trust Indenture
Act, and (unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee or the
Company to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act and this Indenture applicable to it as a Paying Agent and hold all
sums held by it for the payment of principal of or any premium or interest on
the 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, (ii) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment in respect of
the Securities; and (iii) at any time during the continuance of any default by
the Company (or any other obligor upon the Securities) in the making of any
payment in respect of the Securities, upon the written
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request of the Trustee, forthwith pay to the Trustee all sums held in trust by
such Paying Agent for payment in respect of the Securities, and account for any
funds disbursed.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of 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 on Company Request, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; 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 a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York, 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 1005. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 1006. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
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SECTION 1007. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 704(b) or 1006, if before the time
for such compliance the Holders of at least a majority in aggregate principal
amount of the Outstanding Securities shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such
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.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption.
The Securities may be redeemed at the election of the Company, in whole
or from time to time in part, at any time on or after _______________, 2000, at
the Redemption Prices specified in the form of Security hereinbefore set forth,
together with accrued and unpaid interest thereon to the Redemption Date.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company as permitted by
any provision of this Indenture shall be made in accordance with such provision
and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 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 period shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities to be
redeemed. In case of any redemption at the election of the Company of all of the
Securities, the Company shall, at least 45 days prior to the Redemption Date
fixed by the Company (unless a shorter period shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date.
SECTION 1104. Selection by Trustee 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
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Securities not previously called for redemption, by lot or pro rata or by such
other method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to $1,000 or any
integral multiple thereof) of the principal amount of Securities of a
denomination larger than $1,000.
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 (so
far as may be) 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. In any case
where more than one Security is registered in the same name, the Trustee in its
discretion may treat the aggregate principal amount so registered as if it were
represented by one Security.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to the Trustee and to each Holder of Securities to be redeemed, at his
address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to
be redeemed,
(d) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that
(unless the Company shall default in payment of the Redemption Price)
interest thereon will cease to accrue on and after said date,
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(e) the conversion price, the date on which the right to
convert the Securities to be redeemed will terminate and the place or
places where such Securities may be surrendered for conversion, and
(f) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
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, at the
Company's request received by the Trustee at least 40 days prior to the
Redemption Date, by the Trustee in the name and at the expense of the
Company.
SECTION 1106. Deposit of Redemption Price.
At or prior to 11:00 a.m. (New York City time) on 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 1004) an amount of money in same day funds sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued and unpaid interest on, all the Securities or portions
thereof which are to be redeemed on that date other than any Securities called
for redemption on that date which have been converted prior to the date of such
deposit.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 307) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued and unpaid
interest thereon to the Redemption Date; provided, however, that installments of
interest whose Maturity is on or prior to the Redemption Date shall be payable
to the Holders of such Securities, or one or more Predecessor Securities,
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registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company maintained for that purpose pursuant to
Section 1003 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, at all times and in all
respects, the indebtedness represented by the Securities and the payment of the
principal of and premium, if any, and interest on each and all of the Securities
are hereby expressly made subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness. All references in this Article
Twelve to "Senior Indebtedness" are to Senior Indebtedness of the Company.
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding, relative to the Company or to its creditors, as such, or to a
substantial part of its assets, or (b) any proceeding for the liquidation,
dissolution or other winding up of the Company, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any general
assignment for the benefits of creditors or any other marshalling of assets and
liabilities of the Company, then and in any such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due or
to become due on or in respect of all Senior Indebtedness or provision shall be
made for such payment in money or money's worth, before the Holders of the
Securities are entitled to receive any payment
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or distribution of any kind or character, whether in cash, property or
securities, on account of principal of or premium, if any, or interest on the
Securities, and to that end the holders of Senior Indebtedness shall be entitled
to receive, for application to the payment thereof, any payment or distribution
of any kind or character, whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Company being subordinated to the
payment of the Securities, which may be payable or deliverable in respect of the
Securities in any such case, proceeding, dissolution, liquidation or other
winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or distribu
tion which may be payable or deliverable by reason of the payment of any other
indebtedness of the Company being subordinated to the payment of the Securities,
before all Senior Indebtedness is paid in full or payment thereof provided for,
and if such fact shall, at or prior to the time of such payment or distribution,
have been made known to the Trustee or such Holder, as the case may be, then and
in such event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include securities 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, which are subordinated
in right of payment to all Senior Indebtedness which may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of all or substantially all of its properties and assets to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a dissolution, winding up, liquidation, reorganization, general
assignment for the benefit of creditors or marshalling of assets and liabilities
of the Company for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or which acquires by
conveyance or transfer all or substantially all of such properties and assets,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions set forth in Article Eight.
SECTION 1203. Prior Payment to Senior Indebtedness upon Acceleration of
Securities.
In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full in cash of all amounts due on or in respect
of such Senior Indebtedness, or provision shall be made for such payment in
money or
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money's worth, before the Holders of the Securities are entitled to receive any
payment (including any payment which may be payable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
Securities) by the Company on account of the principal of or premium, if any, or
interest on the Securities or on account of the purchase or other acquisition of
Securities.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or such Holder, as the
case may be, then and in such event such payment shall be paid over the
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
SECTION 1204. No Payment When Senior Indebtedness in Default.
(a) In the event and during the continuation of any default in the
payment of principal of or premium, if any, or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto, or in the
event that any event of default with respect to any Senior Indebtedness shall
have occurred and be continuing and shall have resulted in such Senior
Indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, unless and until such
event of default shall have been cured or waived or shall have ceased to exist
and such acceleration shall have been rescinded or annulled, or (b) in the event
any judicial proceeding shall be pending with respect to any such default in
payment or event of default, then no payment (including any payment which may be
payable by reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities) shall be made by the Company on
account of the principal of or premium, if any, or interest on the Securities or
on account of the purchase or other acquisition of Securities.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or such Holder, as the
case may be, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
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SECTION 1205. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other winding
up, general assignment for the benefit of creditors or other marshalling of
assets and liabilities of the Company referred to in Section 1202 or under the
conditions described in Section 1203 or 1204, from making payments at any time
of principal of and premium, if any, or interest on the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of and premium, if any, or interest on
the Securities or the retention of such payment by the Holders, if, at the time
of such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.
SECTION 1206. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due on or in respect of
Senior Indebtedness, 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 (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 such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of and premium, if any, and Interest on
the Securities shall be paid in full. For 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 otherwise be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of the Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
SECTION 1207. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than
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 (b) affect the relative rights against the Company or the
Holders of the Securities and creditors of the Company other than the holders of
Senior Indebtedness, or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise
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permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 1208. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 1209. No Waiver of Subordination Provisions.
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 any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 1210. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article 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 to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee therefor; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 601, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have received
the notice provided for in this Section at least four Business Days prior to the
date upon which by the terms hereof any
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money may become payable for any purpose (including, without limitation, the
payment of the principal of and premium, if any, or interest on any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received by it within four Business Days
prior to such date.
Subject to the provisions of Section 601, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a trustee therefor). 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, 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, 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 1211. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 1212. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other Person cash, property or securities to which
holders of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise. 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, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Article against the Trustee.
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SECTION 1213. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
SECTION 1214. Article Applicable to Paying Agents.
In case 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 in such case (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 Section 1213 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1215. Certain Conversions Deemed Payment.
For the purposes of this Article only, (1) the issuance and delivery of
junior securities upon conversion of Securities in accordance with Article
Thirteen shall not be deemed to constitute a payment or distribution on account
of the principal of or premium or interest on Securities or on account of the
purchase or other acquisition of Securities, and (2) the payment, issuance or
delivery of cash, 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, the term "junior
securities" means (a) shares of any class of capital stock of the Company and
(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 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 of the Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article Thirteen.
SECTION 1216. No Suspension of Remedies.
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of the Securities to take any action to accelerate the maturity
of the Securities pursuant to the provisions described under Article Five and as
set forth in this Indenture or to pursue any rights or remedies
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hereunder or under applicable law, subject to the rights, if any, under this
Article of the holders, from time to time, of Senior Indebtedness to receive the
cash, property or securities receivable upon the exercise of such rights or
remedies.
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security or any portion of the principal
amount thereof which equals $1,000 or any integral multiple thereof may be
converted at any time at the principal amount thereof, or of such portion
thereof, into fully paid and nonassessable shares (calculated as to each
conversion to the nearest 1/100 of a share) of Common Stock, at the conversion
price, determined as hereinafter provided, in effect at the time of conversion.
Such conversion right shall expire at the close of business on __________, 2004.
In case a Security or portion thereof is called for redemption or delivered for
repurchase , such conversion right in respect of the Security or portion so
called shall expire at the close of business on the second business day
preceding the applicable Redemption Date or Repurchase Date, unless the Company
defaults in making the payment due upon redemption or repurchase.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be initially $______ per
share of Common Stock. The conversion price shall be adjusted in certain
instances as provided in Section 1304.
SECTION 1302. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security shall surrender such Security, duly endorsed or assigned to the Company
or in blank, at any office or agency of the Company maintained pursuant to
Section 1003, accompanied by written notice to the Company in the form provided
in the Security (or such other notice as is acceptable to the Company) at such
office or agency that the Holder elects to convert such Security or, if less
than the entire principal amount thereof is to be converted, the portion thereof
to be converted. Securities surrendered for conversion during the period after
the close of business on any Regular Record Date next preceding any Interest
Payment Date to the close of business on such Interest Payment Date shall
(except in the case of Securities or portions thereof which have been called for
redemption) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount being surrendered for
conversion. Except as provided in the immediately preceding sentence and subject
to the last paragraph of Section 307, no payment or adjustment shall be made
upon any conversion
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on account of any interest accrued on the Securities surrendered for conversion
or on account of any dividends on the Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock as and
after such time. As promptly as practicable on or after the conversion date, the
Company shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 1303.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
SECTION 1303. Fractions of Shares.
No fractional share of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Securities (or specified portions thereof) so surrendered. Instead
of any fractional share of such Common Stock which would otherwise be issuable
upon conversion of any Security or Securities (or specified portions thereof),
the Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the Closing Price (as hereinafter defined) at the
close of business on the day of conversion (or, if such day is not a Trading Day
(as hereafter defined), on the Trading Day immediately preceding such day).
SECTION 1304. Adjustment of Conversion Price.
(a) In case the Company shall pay or make a dividend or
other distribution on Common Stock exclusively in Common Stock or shall
pay or make a dividend or other distribution on any other class of
capital stock of the Company which dividend or distribution includes
Common Stock, the conversion price in effect at the opening of business
on the day following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution
shall be reduced by multiplying such conversion price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately
after the opening of business on the day following the date fixed for
such
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determination. For the purpose of this paragraph (a), the number of
shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Company. The Company shall not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(b) Subject to paragraph (g) of this Section, in case the
Company shall pay or make a dividend or other distribution on Common
Stock consisting exclusively of, or shall otherwise issue to all
holders of Common Stock, rights or warrants entitling the holders
thereof to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price (determined as provided in
paragraph (h) of this Section) on the date fixed for the determination
of shareholders entitled to receive such rights or warrants, the
conversion price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price of the
total number of shares of Common Stock so offered for subscription or
purchase would purchase at such Current Market Price and the
denominator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination plus
the number of shares of Common Stock so offered for subscription or
purchase, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (b), the number of
shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Company. The Company shall not issue any
rights or warrants in respect of shares of Common Stock held in the
treasury of the Company.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
conversion price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and, conversely, in case outstanding shares
of Common Stock shall be combined into a smaller number of shares of
Common Stock, the conversion price in effect at the opening of business
on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which subdivision
or combination becomes effective.
(d) Subject to the last sentence of this paragraph (d)
and to paragraph (g) of this Section, in case the Company shall, by
dividend or otherwise, distribute to all holders of Common Stock
evidences of its indebtedness, shares of any class of its capital stock
other than Common Stock, cash or other assets (including securities,
but excluding any rights or warrants referred to in paragraph (b) of
this Section, excluding any dividend or distribution paid exclusively
in cash and excluding any dividend or distribution referred to in
paragraph (a) of this Section), the conversion price shall be reduced
by multiplying the conversion price
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in effect immediately prior to the close of business on the date fixed
for the determination of shareholders entitled to such distribution by
a fraction of which the numerator shall be the Current Market Price
(determined as provided in paragraph (h) of this Section) on such date
less the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution) on such date of the portion of the evidences of
indebtedness, shares of capital stock, cash and other assets to be
distributed applicable to one share of Common Stock and the denominator
shall be such Current Market Price, such reduction to become effective
immediately prior to the opening of business on the day following such
date. If the Board of Directors determines the fair market value of any
distribution for purposes of this paragraph (d) by reference to the
actual or when-issued trading market for any securities comprising part
or all of such distribution, it must in doing so consider the prices in
such market over the same period used in computing the Current Market
Price pursuant to paragraph (h) of this Section, to the extent
possible. For purposes of this paragraph (d), any dividend or
distribution that includes shares of Common Stock, rights or warrants
to subscribe for or purchase shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock shall be
deemed to be (x) a dividend or distribution of the evidences of
indebtedness, cash, assets or shares of capital stock other than such
shares of Common Stock, such rights or warrants or such convertible or
exchangeable securities (making any conversion price reduction required
by this paragraph (d)) immediately followed by (y) in the case of such
shares of Common Stock or such rights or warrants, a dividend or
distribution thereof (making any further conversion price reduction
required by paragraph (a) and (b) of this Section, except any shares of
Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of paragraph (a) of this Section), or
(z) in the case of such convertible or exchangeable securities, a
dividend or distribution of the number of shares of Common Stock as
would then be issuable upon the conversion or exchange thereof, whether
or not the conversion or exchange of such securities is subject to any
conditions (making any further conversion price reduction required by
paragraph (a) of this Section, except the shares deemed to constitute
such dividend or distribution shall not be deemed "outstanding at the
close of business on the date fixed for such determination" within the
meaning of paragraph (a) of this Section).
(e) In case the Company shall, by dividend or otherwise,
at any time distribute to all holders of Common Stock cash (excluding
any cash that is distributed as part of a distribution referred to in
paragraph (d) of this Section or in connection with a transaction to
which Section 1311 applies) in an aggregate amount that, together with
(A) the aggregate amount of any other distributions to all holders of
Common Stock made exclusively in cash (excluding any cash that is
distributed in connection with a transaction to which Section 1311
applies) within the 12 months preceding the date fixed for the
determination of shareholders entitled to such distribution and in
respect of which no conversion price adjustment pursuant to this
paragraph (e) has been made previously and (B) the aggregate of any
cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) as of such date of determination of
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consideration payable in respect of any tender offer by the Company or
a Subsidiary for all or any portion of Common Stock consummated within
the 12 months preceding such date of determination and in respect of
which no conversion price adjustment pursuant to paragraph (f) of this
Section has been made previously, exceeds 15% of the product of the
Current Market Price (determined as provided in paragraph (h) of this
Section) on such date of determination times the number of shares of
Common Stock outstanding on such date, the conversion price shall be
reduced by multiplying the conversion price in effect immediately prior
to the close of business on such date of determination by a fraction of
which the numerator shall be the Current Market Price (determined as
provided in paragraph (h) of this Section) on such date less the amount
of cash to be distributed at such time applicable to one share of
Common Stock and the denominator shall be such Current Market Price,
such reduction to become effective immediately prior to the opening of
business on the day after such date.
(f) In case a tender offer made by the Company or any
Subsidiary for all or any portion of Common Stock shall be consummated
and such tender offer shall involve an aggregate consideration having a
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution)
as of the last time (the "Expiration Time") that tenders may be made
pursuant to such tender offer (as it shall have been amended) that,
together with (A) the aggregate of the cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) as of the Expiration
Time of the other consideration paid in respect of any other tender
offer by the Company or a Subsidiary for all or any portion of Common
Stock consummated within the 12 months preceding the Expiration Time
and in respect of which no conversion price adjustment pursuant to this
paragraph (f) has been made previously and (B) the aggregate amount of
any distributions to all holders of Common Stock made exclusively in
cash within the 12 months preceding the Expiration Time and in respect
of which no conversion price adjustment pursuant to paragraph (e) of
this Section has been made previously, exceeds 15% of the product of
the Current Market Price (determined as provided in paragraph (h) of
this Section) immediately prior to the Expiration Time times the number
of shares of Common Stock outstanding (including any tendered shares)
at the Expiration Time, the conversion price shall be reduced by
multiplying the conversion price in effect immediately prior to the
Expiration Time by a fraction of which the numerator shall be (x) the
product of the Current Market Price (determined as provided in
paragraph (h) of this Section) immediately prior to the Expiration Time
times the number of shares of Common Stock outstanding (including any
tendered shares at the Expiration Time) minus (y) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
shareholders upon consummation of such tender offer and the denominator
shall be the product of (A) such Current Market Price times (B) such
number of outstanding shares at the Expiration Time minus the number of
shares accepted for payment in such tender offer (the "Purchased
Shares"), such reduction to become effective immediately prior to the
opening of business on the day following the Expiration Time; provided,
however, that if the number of Purchased Shares or the aggregate
consideration
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payable therefor have not been finally determined by such opening of
business, the adjustment required by this paragraph (f) shall, pending
such final determination, be made based upon the preliminarily
announced results of such tender offer, and, after such final
determination shall have been made, the adjustment required by this
paragraph (f) shall be made based upon the number of Purchased Shares
and the aggregate consideration payable therefor as so finally
determined.
(g) The reclassification of Common Stock into securities
which include securities other than Common Stock (other than any
reclassification upon a consolidation or merger to which Section 1311
applies) shall be deemed to involve (i) a distribution of such
securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be "the
date fixed for the determination of shareholders entitled to such
distribution" within the meaning of paragraph (d) of this Section), and
(ii) a subdivision or combination, as the case may be, of the number of
shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision becomes
effective" or "the day upon which such combination becomes effective,"
as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (c) of
this Section).
Rights or warrants issued by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
shares of Common Stock (either initially or under certain
circumstances), which rights or warrants (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable
and (iii) are also issued in respect of future issuances of Common
Stock, in each case in clauses (i) through (iii) until the occurrence
of a specified event or events ("Trigger Event"), shall for purposes of
this Section 1304 not be deemed issued until the occurrence of the
earliest Trigger Event. If any such rights or warrants, including any
such existing rights or warrants distributed prior to the date of this
Indenture are subject to subsequent events, upon the occurrence of each
of which such rights or warrants shall become exercisable to purchase
different securities, evidences of indebtedness or other assets, then
the occurrence of each such event shall be deemed to be such date of
issuance and record date with respect to new rights or warrants (and a
termination or expiration of the existing rights or warrants without
exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any
Trigger Event with respect thereto, that was counted for purposes of
calculating a distribution amount for which an adjustment to the
conversion price under this Section 1304 was made, (1) in the case of
any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the conversion
price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be,
as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder or holders of
Common Stock with respect to such rights or warrants (assuming such
holder had retained such rights
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or warrants), made to all holders of Common Stock as of the date of
such redemption or repurchase, and (2) in the case of such rights or
warrants which shall have expired or been terminated without exercise
by any holders thereof, the conversion price shall be readjusted as if
such rights and warrants had not been issued.
(h) For the purpose of any computation under this
paragraph and paragraphs (b), (d) and (e) of this Section, the current
market price per share of Common Stock (the "Current Market Price") on
any date shall be deemed to be the average of the daily Closing Prices
for the five consecutive Trading Days selected by the Company
commencing not more than 20 Trading Days before, and ending not later
than, the date in question; provided, however, that (i) if the "ex"
date for any event (other than the issuance or distribution requiring
such computation) that requires an adjustment to the conversion price
pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or
after the 20th Trading Day prior to the date in question and prior to
the "ex" date for the issuance or distribution requiring such
computation, the Closing Price for each Trading Day prior to the "ex"
date for such other event shall be adjusted by multiplying such Closing
Price by the same fraction by which the conversion price is so required
to be adjusted as a result of such other event, (ii) if the "ex" date
for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price
pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or
after the "ex" date for the issuance or distribution requiring such
computation and on or prior to the date in question, the Closing Price
for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the reciprocal
of the fraction by which the conversion price is so required to be
adjusted as a result of such other event, and (iii) if the "ex" date
for the issuance or distribution requiring such computation is on or
prior to the date in question, after taking into account any adjustment
required pursuant to clause (ii) of this proviso, the Closing Price for
each Trading Day on or after such "ex" date shall be adjusted by adding
thereto the amount of any cash and the fair market value on the date in
question (as determined by the Board of Directors in a manner
consistent with any determination of such value for purposes of
paragraph (d) or (e) of this Section, whose determination shall be
conclusive and described in a Board Resolution) of the evidences of
indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on
the day before such "ex" date. For the purpose of any computation under
paragraph (f) of this Section, the Current Market Price on any date
shall be deemed to be the average of the daily Closing Prices for the
five consecutive Trading Days selected by the Company commencing on or
after the latest (the "Commencement Date") of (i) the date 20 Trading
Days before the date in question, (ii) the date of commencement of the
tender offer requiring such computation and (iii) the date of the last
amendment, if any, of such tender offer involving a change in the
maximum number of shares for which tenders are sought or a change in
the consideration offered, and ending not later than the Expiration
Time of such tender offer; provided, however, that if the "ex" date for
any event (other than the tender offer requiring such computation) that
requires an adjustment to the conversion price pursuant to paragraph
(a), (b), (c), (d), (e) or (f) above occurs on or after the
Commencement Date and prior to the
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Expiration Time for the tender offer requiring such computation, the
Closing Price for each Trading Day prior to the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
same fraction by which the conversion price is so required to be
adjusted as a result of such other event. The closing price for any
Trading Day (the "Closing Price") shall be the last reported sales
price regular way or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices regular
way, in either case on the New York Stock Exchange or, if the Common
Stock is not listed or admitted to trading on such exchange, on the
principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on the Nasdaq Stock Market's
National Market or, if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on such National
Market, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the Company for that purpose.
For purposes of this paragraph, the term "Trading Day" means each
Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on
which securities are generally not traded on the applicable securities
exchange or in the applicable securities market and the term "'ex'
date," (i) when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular way on
the relevant exchange or in the relevant market from which the Closing
Prices were obtained without the right to receive such issuance or
distribution, (ii) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which
the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes
effective, and (iii) when used with respect to any tender offer means
the first date on which the Common Stock trades regular way on such
exchange or in such market after the last time that tenders may be made
pursuant to such tender offer (as it shall have been amended).
(i) The Company may make such reductions in the
conversion price, in addition to those required by paragraphs (a), (b),
(c), (d), (e) and (f) of this Section, (i) to the extent permitted by
law, by any amount for any period of at least 20 days or (ii) as it
considers to be advisable (as evidenced by a Board Resolution) in order
that any event treated for federal income tax purposes as a dividend of
stock or stock rights shall not be taxable to the holders of Common
Stock or, if that is not possible, to diminish any income taxes that
are otherwise payable because of such event.
(j) No adjustment in the conversion price shall be
required unless such adjustment (plus any other adjustments not
previously made by reason of this paragraph (j)) would require an
increase or decrease of at least 1% in the conversion price; provided,
however, that any adjustments which by reason of this paragraph (j) are
not required to be made shall be carried forward and taken into account
in any subsequent adjustment.
(k) Notwithstanding any other provision of this Section
1304, no adjustment to the conversion price shall reduce the conversion
price below the then par value per share of
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the Common Stock, and any such purported adjustment shall instead
reduce the conversion price to such par value. The Company hereby
covenants not to take any action to increase the par value per share of
the Common Stock.
SECTION 1305. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion
price in accordance with Section 1304 and shall prepare an Officers'
Certificate signed by the Chief Financial Officer or Treasurer of the
Company setting forth the adjusted conversion price and showing in
reasonable detail the facts upon which such adjustment is based, and
such certificate shall forthwith be filed (with a copy to the Trustee)
at each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 1003; and
(b) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price shall
forthwith be prepared, and as soon as practicable after it is prepared,
such notice shall be mailed by the Company to all Holders at their last
addresses as they shall appear in the Security Register. In the case of
any adjustment pursuant to Section 1304(i)(i), such notice shall be
mailed at least 15 days before the date the reduced conversion price
shall take effect and shall state the reduced conversion price and the
period it will be in effect.
SECTION 1306. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on Common Stock payable (i) otherwise than exclusively in
cash or (ii) exclusively in cash in an amount that would require a
conversion price adjustment pursuant to paragraph (e) of Section 1304;
or
(b) the Company shall authorize the granting to the
holders of Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights
(excluding shares of capital stock or options for capital stock issued
pursuant to a benefit plan for employees, officers or directors of the
Company); or
(c) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock),
or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or
of the sale or transfer of all or substantially all of the properties
and assets of the Company; or
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(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender
offer for all or a portion of outstanding shares of Common Stock (or
shall amend any such tender offer to change the maximum number of
shares being sought or the amount or type of consideration being
offered therefor);
then the Company shall cause to be filed at each office or agency maintained
pursuant to Section 1003, and shall cause to be mailed to all Holders at their
last addresses as they shall appear in the Security Register, at least 21 days
(or 11 days in any case specified in clause (a), (b) or (e) above) prior to the
applicable record, effective or expiration date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or granting of rights or warrants, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record who will
be entitled to such dividend, distribution, rights or warrants are to be
determined, (y) the date on which such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up,
or (z) the date on which such tender offer commenced, the date on which such
tender offer is scheduled to expire unless extended, the consideration offered
and the other material terms thereof (or the material terms of any amendment
thereto). Neither the failure to give any such notice nor any defect therein
shall affect the legality or validity of any action described in clauses (a)
through (e) of this Section 1306.
SECTION 1307. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the authorized but unissued Common Stock or out of the
Common Stock held in treasury, for the purpose of effecting the conversion of
Securities, the full number of shares of Common Stock then issuable upon the
conversion of all outstanding Securities.
SECTION 1308. Taxes on Conversions.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
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SECTION 1309. Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 1308, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
SECTION 1310. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
SECTION 1311. Provisions of Consolidation, Merger or Sale of Assets.
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock) or any sale or
other transfer of all or substantially all of the properties and assets of the
Company, the Person formed by such consolidation or resulting from such merger
or which acquires such properties and assets, as the case may be, shall execute
and deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then Outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in Section 1301, to
convert such Security only into the kind and amount of securities, cash and
other property, if any, receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock into which such
Security might have been converted immediately prior to such consolidation,
merger, sale or transfer, assuming such holder of Common Stock (i) is not a
Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the
case may be (a "Constituent Person"), or an Affiliate of a Constituent Person
and (ii) failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer is not the same for each share of Common Stock held immediately
prior to such consolidation, merger, sale or transfer by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("nonelecting share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares). Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
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SECTION 1312. Trustee's Disclaimer.
The Trustee has no duty to determine when an adjustment under this
Article Thirteen should be made, how it should be made or what such adjustment
should be, but may accept as conclusive evidence of the correctness of any such
adjustment, and shall be protected in relying upon, the Officers' Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 1305. 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 Thirteen.
ARTICLE FOURTEEN
Right to Require Repurchase
SECTION 1401. Right to Require Repurchase.
In the event that there shall occur a Repurchase Event (as defined in
Section 1406), then each Holder shall have the right, at such Holder's option,
to require the Company to purchase, and upon the exercise of such right, the
Company shall, subject to the provisions of Sections 1203 and 1204, purchase,
all or any part of such Holder's Securities on the date (the "Repurchase Date")
that is no more than 30 days after the date the Company gives notice of the
Repurchase Event as contemplated in Section 1402(a) at a price (the "Repurchase
Price") equal to 100% of the principal amount thereof, together with accrued and
unpaid interest thereon to the Repurchase Date.
SECTION 1402. Notice; Method of Exercising Repurchase Right.
(a) On or before the 30th day after the occurrence of a
Repurchase Event, the Company, or at the request of the Company
received by the Trustee at least 40 days prior to the Repurchase Date,
the Trustee (in the name and at the expense of the Company), shall give
notice of the occurrence of the Repurchase Event and of the repurchase
right set forth herein arising as a result thereof by first-class mail,
postage prepaid, to the Trustee and to each Holder of the Securities at
such Holder's address appearing in the Security Register. The Company
shall also deliver a copy of such notice of a repurchase right to the
Trustee.
Each notice of a repurchase right shall state:
(1) the event constituting the Repurchase Event
and the date thereof,
(2) the Repurchase Date,
(3) the date by which the repurchase right must
be exercised,
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(4) the Repurchase Price, and
(5) the procedures a Holder must follow to
exercise a repurchase right.
If any of the Securities subject to a repurchase offer 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 thereto.
No failure of the Company to give the foregoing notice shall
limit any Holder's right to exercise a repurchase right. The Trustee
shall have no affirmative obligation to determine if there shall have
occurred a Repurchase Event.
(b) To exercise a repurchase right, a Holder shall
deliver to the Company (or an agent designated by the Company for such
purpose in the notice referred to in (a) above) and to the Trustee on
or before the close of business on the Repurchase Date (i) written
notice of the Holder's exercise of such right, which notice shall set
forth the name of the Holder, the principal amount of the Security or
Securities (or portion of a Security) to be repurchased, and a
statement that an election to exercise the repurchased right is being
made thereby, and (ii) any Definitive Security with respect to which
the repurchase right is being exercised, duly endorsed for transfer to
the Company. Such written notice shall be irrevocable. If the
Repurchase Date falls between any Regular Record Date and the next
succeeding Interest Payment Date, Securities to be repurchased must be
accompanied by payment from the Holder of an amount equal to the
interest thereon which the registered Holder thereof is to receive on
such Interest Payment Date.
In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall on the Repurchase
Date pay or cause to be paid in cash to the Holder thereof the
Repurchase Price of the Security or Securities as to which the
repurchase right has been exercised, together with accrued and unpaid
interest thereon to the Repurchase Date. In the event that a repurchase
right is exercised with respect to less than the entire principal
amount of a surrendered Security, the Company shall execute and deliver
to the Trustee and the Trustee shall authenticate for issuance in the
name of the Holder a new Security or Securities in the aggregate
principal amount of the unrepurchased portion of such surrendered
security.
SECTION 1403. Deposit of Repurchase Price.
On or prior to 11:00 a.m. (New York time) on the Repurchase 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 1004) an amount of money in same day funds sufficient to pay
the Repurchase Price of, and (except if the Repurchase Date shall be an Interest
Date) accrued interest on, all the Securities which are to be repaid on the
Repurchase Date.
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SECTION 1404. Securities Not Repurchased on Repurchase Date.
If any Security surrendered for repurchase shall not be so paid on the
Repurchase Date, the principal shall, until paid, continue to bear interest from
the Repurchase Date at the rate per annum borne by such Security.
SECTION 1405. Securities Repurchased in Part.
Any Security which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that purpose
pursuant to Section 1003 (with, if the Company or the Trustee so requires, due
endorsement by, or written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Security so surrendered.
SECTION 1406. Certain Definitions.
For purposes of this Article:
(a) A "Repurchase Event" shall have occurred upon the
occurrence of a Change in Control or Termination of Trading after the
date of this Indenture and on or prior to ____________, 2004.
(b) A "Change in Control" shall occur when :
(i) all or substantially all of the properties
and assets of the Company and its Subsidiaries, taken as a
whole, are sold, assigned, conveyed, transferred, leased or
otherwise disposed of either in one transaction or a series of
related transactions, to any Person;
(ii) there shall be consummated any consolidation
or merger of the Company pursuant to which Common Stock would
be converted into cash, securities or other property, in each
case other than a consolidation or merger of the Company in
which the holders of the Voting Stock of the Company
immediately prior to the consolidation or merger own, directly
or indirectly, at least a majority of the Voting Stock of the
continuing or surviving corporation immediately after such
consolidation or merger;
(iii) any person, or any persons acting together
which would constitute a "group" for purposes of Section 13(d)
of the Exchange Act, shall beneficially own (as
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defined in Rule 13d-3 under the Exchange Act) more than 50% of
the Voting Stock of the Company;
(iv) at any time during any consecutive two-year
period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together
with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders
of the Company was approved by a vote of 662/3% of the
directors then still in office who were either directors at
the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason
to constitute a majority of the Board of Directors of the
Company then in office; or
(v) the Company is liquidated or dissolved.
(c) A "Termination of Trading" shall occur if the Common
Stock (or other common stock into which the Securities are then
convertible) is neither listed for trading on a U.S. national
securities exchange nor approved for trading on an established
automated over-the-counter trading market in the United States.
ARTICLE FIFTEEN
Guarantees
SECTION 1501. Unconditional Guarantees.
The Company shall cause each Wholly-owned Subsidiary Significant to
enter the Guarantee Agreement (which Guarantee Agreement shall be substantially
in the form attached hereto as Exhibit B).
SECTION 1502. Addition of Guarantors.
For as long as any Securities are outstanding, promptly but in no event
later than 30 days following the acquisition or creation of any Wholly-owned
Significant Subsidiary after the date of this Indenture, the Company shall cause
such Subsidiary to execute and deliver to the Trustee an amendment to the
Guarantee Agreement to add such Subsidiary as a Guarantor.
SECTION 1503. Subordination of Guarantees.
Each Holder of a Security, by his acceptance thereof, covenants and
agrees, that, to the extent and in the manner set forth in the Guarantee
Agreement, the payment of the principal of (and premium, if any) and interest on
the Securities as guaranteed by each Guarantor pursuant to its
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Guarantee is hereby expressly made subordinate and subject in right of payment
to the prior payment in full of all Senior Indebtedness of such Guarantor.
-----------------------------
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
KCS ENERGY, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
STATE STREET BANK AND TRUST COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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EXHIBIT A
INITIAL GUARANTORS
NAME JURISDICTION OF ORGANIZATION
---- ----------------------------
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EXHIBIT B
GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT, dated as of December ___, 1997, is
among the entities listed on the signature pages hereof (collectively, the
"Guarantors") and State Street Bank and Trust Company, as Trustee (the
"Trustee").
WHEREAS KCS Energy, Inc. (the "Company") and the Trustee, have
entered into an Indenture dated as of even date thereof regarding up to
$143,750,000 in aggregate principal amount of _____% Convertible Subordinated
Notes due 2004 of the Company (the "Securities");
NOW, THEREFORE, in accordance with Article Fifteen of the
Indenture and for value received, each of the undersigned Guarantors jointly and
severally guarantees to the Trustee and to the holders of the Securities (the
"Holders") the punctual payment and performance of the obligations of the
Company under the Indenture, as the direct and primary obligation of each
Guarantor, waiving all demands and suretyship defenses.
Any term used herein and not otherwise defined herein shall
have the meaning assigned to such term in the Indenture.
ARTICLE I
The Guarantees
SECTION 101. Unconditional Guarantees. (a) For value received,
the Guarantors, jointly and severally, hereby fully, unconditionally and
absolutely guarantee (the "Guarantees") to the Holders and to the Trustee the
complete and punctual payment and performance by the Company of the obligations
of the Company under the Indenture (the "Obligations"), and further agree to pay
any and all reasonable expenses (including, without limitation, all reasonable
fees and disbursements of counsel) which may be paid or incurred by the Trustee
or the Holders in enforcing their rights under the Guarantees.
(b) Failing payment or performance by the Company when due of
any Obligation guaranteed pursuant to the Guarantees, for whatever reason, the
Guarantors, jointly and severally, will be obligated to pay or perform the same
immediately. Each of the Guarantors hereby agrees that its obligations hereunder
shall be full, unconditional and absolute, irrespective of the validity or
enforceability of the Securities, the Guarantees or the Indenture, the absence
of any action to enforce the same, any waiver or consent by any Holder with
respect to any provisions hereof or thereof, any release of any other Guarantor,
the recovery of any judgment against the Company, any action to enforce the same
or any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each of the Guarantors hereby agrees that
in the event of a default in payment of the principal of, or premium, if any, or
interest on the Securities, whether at
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the Stated Maturity or by declaration of acceleration, call for redemption or
otherwise, legal proceedings may be instituted by the Trustee on behalf of the
Holders or, subject to Section 507 of the Indenture, by the Holders, on the
terms and conditions set forth in the Indenture, directly against each of the
Guarantors to enforce the Guarantees without first proceeding against the
Company.
(c) The obligations of each Guarantor herein shall be as
aforesaid full, unconditional and absolute and shall not be impaired, modified,
released or limited by any occurrence or condition whatsoever, including,
without limitation, (i) any compromise, settlement, release, waiver, renewal,
extension, indulgence or modification of, or any change in, any of the
obligations and liabilities of the Company or any Guarantor contained in the
Securities or the Indenture, (ii) any impairment, modification, release or
limitation of the liability of the Company, any Guarantor or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of Title 11, U.S. Code or any
similar federal or state law for the relief of debtors, as amended, or other
statute or from the decision of any court, (iii) the assertion or exercise by
the Company, any Guarantor or the Trustee of any rights or remedies, (iv) the
assignment or the purported assignment of any property as security for the
Securities, including all or any part of the rights of the Company under the
Indenture, (v) the extension of the time for payment by the Company or any
Guarantor of any payments or other sums or any part thereof owing or payable
under any of the terms and provisions of the Securities or the Indenture or of
the time for performance by the Company or any Guarantor of any other
obligations under or arising out of any such terms and provisions or the
extension or the renewal of any thereof, (vi) the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of the
Company or any Guarantor set forth herein or in the Indenture or (vii) the
voluntary or involuntary liquidation, dissolution, sale or other disposition of
all or substantially all of the assets, marshalling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization of, or other similar proceeding affecting, the Company or any of
the Guarantors or any of their respective assets.
(d) Each Guarantor hereby (i) waives diligence, presentment,
demand of payment, filing of claims with a court in the event of the merger,
insolvency or bankruptcy of the Company or a Guarantor, and all demands
whatsoever, (ii) acknowledges that any agreement, instrument or document
evidencing the Guarantees may be transferred and that the benefit of its
obligations hereunder shall extend to each holder of any agreement, instrument
or document evidencing the Guarantees without notice to them and (iii) covenants
that its Guarantee will not be discharged except by complete performance of the
Guarantees or upon payment, performance and satisfaction in full by the Company
of its Obligations. Each Guarantor further agrees that if at any time all or any
part of any payment theretofore applied by any Person to any Guarantee is, or
must be, rescinded or returned for any reasons whatsoever, including without
limitation, the insolvency, bankruptcy or reorganization of the Company or any
Guarantor, such Guarantee shall, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence notwithstanding
such application, and the Guarantees shall continue to be effective or be
reinstated as though such application had not been made.
(e) Each Guarantor shall be subrogated to all rights of the
Holders and the Trustee against the Company in respect of any amounts paid by
such Guarantor pursuant to the provisions of the Indenture, provided, however,
that no Guarantor shall be entitled to enforce or to receive any
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payments arising out of, or based upon, such right of subrogation until all of
the Securities and the Guarantees shall have been paid in full or discharged.
SECTION 102. Limitation of Guarantor's Liability. Each
Guarantor and by its acceptance hereof each Holder confirms that it is the
intention of all such parties that the guarantee by such Guarantor pursuant to
its Guarantee not constitute a fraudulent transfer or conveyance for purposes of
any federal, state or foreign law. To effectuate the foregoing intention, the
Holders and each Guarantor hereby irrevocably agree that the obligations of each
Guarantor under its Guarantee shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to Section 103, result in the
obligations of such Guarantor under its Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under federal, state or foreign law.
SECTION 103. Contribution. In order to provide for just and
equitable contribution among the Guarantors, the Guarantors agree, inter se,
that, in the event any payment or distribution is made by any Guarantor (a
"Funding Guarantor") under its Guarantee, such Funding Guarantor shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets (defined below) of each Guarantor (including the
Funding Guarantor) for all payments, damages and expenses incurred by the
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Guarantor's obligations with respect to its Guarantee.
For purposes of this Section, Adjusted Net Assets of a Guarantor at any date
shall mean the lesser of: (x) the amount by which the fair value of the property
of such Guarantor at such date exceeds the total amount of liabilities,
including, without limitation, the probable amount of contingent liabilities
(after giving effect to all other fixed and contingent liabilities incurred or
assumed on such date) of such Guarantor at such date, but excluding liabilities
under the Guarantee of such Guarantor, and (y) the amount by which the present
fair saleable value of the assets of such Guarantor at such date exceeds the
amount that will be required to pay the probable liability of such Guarantor on
its debts (after giving effect to all fixed and contingent liabilities incurred
or assumed on such date), excluding debt in respect of the Guarantee of such
Guarantor, as they become absolute and matured.
SECTION 104. Addition of Guarantors. For as long as any
Guarantees are required to remain in effect pursuant to the terms of the
Indenture, promptly but in no event later than 30 days following the acquisition
or creation of any Wholly-owned Significant Subsidiary after the date of the
Indenture, this Guaranty Agreement shall be amended to add such Subsidiary as a
Guarantor.
SECTION 105. Release of Guarantee. Notwithstanding anything to
the contrary contained in this Article I, in the event that any of the
Guarantors (i) shall no longer be a member of an affiliated group (within the
meaning of Section 279(g) of the Internal Revenue Code of 1986, as amended)
which includes the Company, including, without limitation, upon the sale or
disposition (whether by merger, stock purchase, asset sale or otherwise of such
Guarantor), or (ii) shall no longer be a Significant Subsidiary (as certified to
the Trustee by the Company in an Officers' Certificate), such Guarantor shall be
released from all liability hereunder and the Guarantee
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of such Guarantor shall be of no further force or effect. In any such case,
upon a Company Request the Trustee shall execute and deliver, at the Company's
expense, an instrument evidencing such release.
ARTICLE II
Subordination of Guarantees
SECTION 201. Guarantees Subordinate to Senior Indebtedness.
Each Guarantor covenants and agrees, and pursuant to the Indenture each Holder,
by his acceptance thereof, likewise covenants and agrees, that the payment of
the principal of (and premium, if any) and interest on the Securities as
guaranteed by each Guarantor pursuant to its Guarantee are hereby expressly made
subordinate and, to the same extent and in the same manner as the payment of the
principal of (and premium, if any) and interest on the Securities is subject in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, subject in right of payment to the prior payment in full of all Senior
Indebtedness of such Guarantor.
ARTICLE III
Trust Indenture Act
SECTION 301. Trust Indenture Act; Application. This Guarantee
Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions; and if and to the extent that any
provision of this Guarantee Agreement limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
SECTION 302. List of Holders of Securities. (a) The Guarantors
shall provide or shall cause to be provided to the Trustee (unless the Trustee
is otherwise the registrar of the Securities) a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders"), (i) semi-annually, not more than 15 days after
each Regular Record Date, as of such Regular Record Date, and (ii) at any other
time within 30 days of receipt by the Guarantors of a written request for a List
of Holders as of a date no more than 15 days before such List of Holders is
given to the Trustee; provided, however, that the Guarantors shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Trustee by the
Guarantors of the Company.
(b) The Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 303. Reports by the Trustee. Within 60 days after May
15 of each year, the Trustee shall provide to the Holders of the Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Trustee shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.
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SECTION 304. Periodic Reports to Trustee. The Guarantors shall
provide or shall cause to be provided to the Trustee such documents, reports and
information as required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act. 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 Guarantors' compliance with any of
their covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 305. Evidence of Compliance with Conditions Precedent.
The Guarantors shall provide to the Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Guarantee Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 306. Events of Default; Waiver. The Holders of not
less than a majority in principal amount of Outstanding Securities may, on
behalf of the Holders of all of the Securities, waive any past default hereunder
and its consequences. Upon such waiver, any such default shall cease to exist,
and any default arising therefrom shall be deemed to have been cured, for every
purpose of this Guarantee Agreement, but no such waiver shall extent to any
subsequent or other default or impair any right consequent thereon.
SECTION 307. Event of Default; Notice. The Trustee shall give
the Holders notice of any default hereunder known to it as and to the extent
provided by the Trust Indenture Act; provided, however, that, except in the case
of default in any payment pursuant to the Guarantees, the Trustee shall be
protected in withholding such notice if and so long as a committee of
Responsible Officers in good faith determines that the withholding of such
notice is in the interests of the holders of the Securities.
SECTION 308. Conflicting Interests. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and the Indenture.
ARTICLE IV
Miscellaneous
SECTION 401. Conditions of Effectiveness. This Guarantee
Agreement shall become effective as of the date of this Guarantee Agreement when
and if this Guarantee Agreement has been duly executed by each of the Guarantors
and the Trustee.
SECTION 402. Reference to and Effect on the Indenture. The
execution, delivery and effectiveness of this Guarantee Agreement shall not
operate as a waiver of any right,
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power or remedy of the Trustee under the Indenture, nor constitute a waiver of
any provision of the Indenture, and the Indenture shall remain in full force and
effect and are hereby ratified and confirmed.
SECTION 403. Governing Law. This Guarantee Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 404. Headings. Section headings in this Guarantee
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Guarantee Agreement for any other purpose.
SECTION 405. Counterparts. This Guarantee Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may execute this
Guarantee Agreement by signing any such counterpart.
SECTION 406. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first class mail addressed as
follows:
if to any Guarantor or all Guarantors:
c/o KCS Energy, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
if to the Trustee:
State Street Bank and Trust Company
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
SECTION 407. Rights of Holders. The Guarantors expressly
acknowledge that any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Company or any other Person and
the Holders and the Trustee shall, with respect to this Guarantee Agreement,
have all of the rights and the obligations of the Holders and the Trustee set
forth in the Indenture with respect to the Securities and the Indenture, all as
though this Guarantee Agreement were included therein and made a part thereof.
SECTION 408. Amendments and Waivers. The provisions of this
Guarantee may be amended, modified or supplemented by the Trustee and the
Guarantors, provided that, without the consent of the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities, no
amendment, modification or supplement to this Guarantee Agreement shall be made
which adversely affects the rights of the Holders hereunder in any material
respect. The foregoing notwithstanding, no consent of any Holders shall be
required to (i) reflect the release of any Guarantor from its Guarantee, or the
addition of any Wholly-owned Significant Subsidiary of the Company as a
Guarantor, in the manner provided by the Indenture and this Guarantee Agreement
or (ii) cure any ambiguity, to correct or supplement any provision herein which
may be defective or inconsistent with any other provision herein, or to make any
other
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provisions with respect to matters or questions arising under this Guarantee
Agreement, provided that such action pursuant to this clause (ii) shall not
adversely affect the rights of Holders hereunder in any material respect.
SECTION 409. Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have caused this
Guarantee Agreement to be duly executed, all as of the day and year first above
written.
GUARANTORS
[TO COME]
STATE STREET BANK AND TRUST
COMPANY, AS TRUSTEE
By:
-----------------------------------
Name:
-----------------------------
Title:
----------------------------
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