INTERNATIONAL SHIPHOLDING CORPORATION
AND
THE BANK OF NEW YORK
AS TRUSTEE
INDENTURE
DATED AS OF____________________, 2004
_____% CONVERTIBLE SUBORDINATED NOTES DUE 2014
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS 1
Section 1.1 Definitions 1
ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND
EXCHANGE OF NOTES 8
Section 2.1 Designation, Amount and Issue of Notes 9
Section 2.2 Form of Notes 9
Section 2.3 Date and Denomination of Notes;
Maturity; Payments of Interest 9
Section 2.4 Execution of Notes 11
Section 2.5 Exchange and Registration of Transfer of Notes 12
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes 15
Section 2.7 Temporary Notes 16
Section 2.8 Cancellation of Notes Paid, Etc. 16
ARTICLE III REDEMPTION AND PURCHASE OF NOTES 16
Section 3.1 Redemption of Notes at Option of the Company 16
Section 3.2 Optional Redemption of Notes Upon a Change in Control 17
Section 3.3 Notice of Redemption; Selection of Notes 17
Section 3.4 Payment of Notes Called for Redemption by Company 20
Section 3.5 Reserved 21
Section 3.6 Required Purchase at Option of Holders Upon a Change in Control 21
ARTICLE IV SUBORDINATION OF NOTES 26
Section 4.1 Agreement of Subordination 26
Section 4.2 Payments to Noteholders 27
Section 4.3 Subrogation of Notes 29
Section 4.4 Authorization by Noteholders 30
Section 4.5 Notice to Trustee 30
Section 4.6 Trustee's Relation to Senior Indebtedness 31
Section 4.7 No Impairment of Subordination 31
Section 4.8 Certain Conversions Not Deemed Payment 31
Section 4.9 Article Applicable to Paying Agents 32
Section 4.10 Senior Indebtedness Entitled to Rely 32
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY 32
Section 5.1 Payment of Principal, Premium and Interest 32
Section 5.2 Maintenance of Office or Agency 32
Section 5.3 Appointments to Fill Vacancies in Trustee's Office 33
Section 5.4 Provisions as to Paying Agent 33
Section 5.5 Existence 34
i
Section 5.6 Restriction as to Dividends 34
Section 5.7 Stay, Extension and Usury Laws 34
Section 5.8 Compliance Certificate 35
Section 5.9 Further Instruments and Acts 35
ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE 35
Section 6.1 Noteholders' Lists 35
Section 6.2 Preservation and Disclosure of Lists 36
Section 6.3 Reports by Trustee 36
Section 6.4 Reports by Company 36
ARTICLE VII DEFAULTS AND REMEDIES 37
Section 7.1 Events of Default 37
Section 7.2 Payments of Notes on Default; Suit Therefor 39
Section 7.3 Application of Monies Collected by Trustee 41
Section 7.4 Proceedings by Noteholder 41
Section 7.5 Proceedings by Trustee 42
Section 7.6 Remedies Cumulative and Continuing 42
Section 7.7 Direction of Proceedings and Xxxxxx of Defaults by
Majority of Noteholders 42
Section 7.8 Notice of Defaults 43
Section 7.9 Undertaking to Pay Costs 43
Section 7.10 Delay or Omission Not Waiver 44
ARTICLE VIII CONCERNING THE TRUSTEE 44
Section 8.1 Duties and Responsibilities of Trustee 44
Section 8.2 Reliance on Documents, Opinions, Etc. 45
Section 8.3 Trustee's Disclaimer 46
Section 8.4 Trustee, Paying Agents, Conversion Agents or
Registrar May Own Notes 46
Section 8.5 Monies to Be Held in Trust 46
Section 8.6 Compensation and Expenses of Trustee 46
Section 8.7 Officers' Certificate as Evidence 47
Section 8.8 Conflicting Interests of Trustee 47
Section 8.9 Eligibility of Trustee 47
Section 8.10 Resignation or Removal of Trustee 48
Section 8.11 Acceptance by Successor Trustee 49
Section 8.12 Succession by Xxxxxx, Etc. 49
Section 8.13 Limitation on Rights of Trustee as Creditor 50
ARTICLE IX CONCERNING THE NOTEHOLDERS 50
Section 9.1 Action by Noteholders 50
Section 9.2 Proof of Execution by Noteholders 50
Section 9.3 Who Are Deemed Absolute Owners 51
Section 9.4 Company-Owned Notes Disregarded 51
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Section 9.5 Revocation of Consents; Future Holders Bound 51
ARTICLE X NOTEHOLDERS' MEETINGS 52
Section 10.1 Purpose of Meetings 52
Section 10.2 Call of Meetings by Trustee 52
Section 10.3 Call of Meetings by Company or Noteholders 53
Section 10.4 Qualifications for Voting 53
Section 10.5 Regulations 53
Section 10.6 Voting 53
Section 10.7 No Delay of Rights by Meeting 54
ARTICLE XI SUPPLEMENTAL INDENTURES 54
Section 11.1 Supplemental Indentures Without Consent of Noteholders 54
Section 11.2 Supplemental Indentures with Consent of Noteholders 55
Section 11.3 Effect of Supplemental Indentures 56
Section 11.4 Notation on Notes 57
Section 11.5 Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee 57
ARTICLE XII MERGER, SALE OR CONSOLIDATION 57
Section 12.1 Limitation on Merger, Sale or Consolidation 57
Section 12.2 Successor Corporation to Be Substituted 57
ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE 58
Section 13.1 Discharge of Indenture 58
Section 13.2 Deposited Monies to Be Held in Trust by Trustee 59
Section 13.3 Paying Agent to Repay Monies Held 59
Section 13.4 Return of Unclaimed Monies 59
Section 13.5 Reinstatement 59
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS 60
Section 14.1 Indenture and Notes Solely Corporate Obligations 60
ARTICLE XV CONVERSION OF NOTES 60
Section 15.1 Holder's Right to Convert 60
Section 15.2 Exercise of Conversion Right; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends 60
Section 15.3 Cash Payments in Lieu of Fractional Shares 62
Section 15.4 Conversion Price 62
Section 15.5 Adjustment of Conversion Price 62
Section 15.6 Reclassification, Consolidation, Merger or Sale 70
Section 15.7 Taxes on Shares Issued 71
Section 15.8 Reservation of Shares; Shares to Be Fully Paid;
Listing of Common Stock 72
Section 15.9 Responsibility of Trustee 73
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Section 15.10 Notice to Holders Prior to Certain Actions 73
ARTICLE XVI MISCELLANEOUS PROVISIONS 74
Section 16.1 Provisions Binding on Company's Successors 74
Section 16.2 Official Acts by Successor Corporation 74
Section 16.3 Addresses for Notices, Etc. 75
Section 16.4 Governing Law 74
Section 16.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee 75
Section 16.6 Legal Holidays 75
Section 16.7 No Security Interest Created 75
Section 16.8 Trust Indenture Act 75
Section 16.9 Benefits of Indenture 76
Section 16.10 Table of Contents, Headings, Etc. 76
Section 16.11 Authenticating Agent 76
Section 16.12 Execution in Counterparts 77
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CROSS REFERENCE SHEET*
Between
Provisions of Trust Indenture Act of 1939 and Indenture, dated as
of , 2004, between International Shipholding Corporation and The
Bank of New York, as Trustee, providing for the % Convertible Subordinated
Notes Due 2014:
SECTION OF
SECTION OF THE ACT INDENTURE
------------------ ---------
310(a)(1) and (2) 8.9
310(a)(3) and (4) Inapplicable
310(b) 8.8 and
8.10(b) and (d)
310(c) Inapplicable
311(a) 8.13
311(b) 8.13
311(c) Inapplicable
312(a) 6.1 and 6.2(a)
312(b) 6.2(b)
312(c) 6.2(c)
313(a) 6.3(a)
313(b)(1) Inapplicable
313(b)(2) 6.3(a)
313(c) 6.3(a)
313(d) 6.3(b)
314(a) 6.4
314(b) Inapplicable
314(c)(1) and (2) 16.5
314(c)(3) Inapplicable
314(d) Inapplicable
314(e) 16.5
314(f) Inapplicable
315(a), (c) and (d) 8.1
315(b) 7.8
315(e) 7.9
316(a)(1) 7.7
316(a)(2) Inapplicable
316(a)(last sentence) 9.4
316(b) 11.2
317(a) 7.2
317(b) 5.4 and 13.2
318(a) 16.8
v
INDENTURE
INDENTURE, dated as of _______________, 2004, between International
Shipholding Corporation, a Delaware corporation (hereinafter sometimes called
the "Company," as more fully set forth in Section 1.1), and The Bank of New
York, a state banking corporation organized and existing under the laws of the
State of New York, as trustee (hereinafter sometimes called the "Trustee", as
more fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its _____% Convertible Subordinated Notes Due 2014
(hereinafter sometimes called the "Notes"), in an aggregate principal amount not
to exceed $___,000,000 and, to provide the terms and conditions upon which the
Notes are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, and a form of conversion notice to be borne by
the Notes are to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are to be authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Notes by the holders thereof,
the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Each of the terms defined in this Section 1.1
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.1. Each of
the terms used in this Indenture, which are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings
assigned to such term in said Trust Indenture Act and in said Securities Act as
in force at the date of the execution of this Indenture. The words "herein,"
"hereof," "hereunder," and words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other Subdivision. The terms
defined in this Article include the plural as well as the singular.
AFFILIATE. The term "Affiliate" of any specified person shall mean any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person. For the purposes of this
definition, "control," when used with respect to any specified person means the
power to direct or cause the direction of the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AMENDED RIGHTS PLAN. The term "Amended Rights Plan" shall have the
meaning specified in Section 15.5(d).
BENEFICIAL OWNER. The term "Beneficial Owner" means the person in whose
name a Note is recorded as beneficial owner of such Note by the Depositary, or
by any participant or indirect participant in the Depositary, as the case may
be.
BOARD OF DIRECTORS. The term "Board of Directors" shall mean the Board
of Directors of the Company or a committee of such Board duly authorized to act
for it hereunder.
BOARD RESOLUTION. The term "Board Resolution" shall mean 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. The term "Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York, New York or the city in which the
Corporate Trust Office is located are authorized or obligated by law or
executive order to close or be closed.
CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred at the time, after the Exchange Date, (i) that any person or group of
persons (within the meaning of Sections 13(d) or 14(a) of the Exchange Act)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Commission under the Exchange Act) of 50% or more of the
voting capital stock of the Company; or (ii) within a period of twelve (12)
consecutive calendar months, individuals who were directors of the Company on
the first day of such period (together with any new directors whose election to
the Board of Directors, or whose nomination for election, was approved by a vote
of a majority 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) shall cease to constitute a majority of the Board of
Directors.
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CHANGE IN CONTROL PURCHASE DATE. The term "Change in Control Purchase
Date" shall have the meaning specified in Section 3.6(a).
CHANGE IN CONTROL PURCHASE NOTICE. The term "Change in Control Purchase
Notice" shall have the meaning specified in Section 3.6(c).
CLOSING PRICE. The term "Closing Price" shall have the meaning
specified in Section 15.5(h)(1).
COMMISSION. The term "Commission" shall mean the Securities and
Exchange Commission.
COMMON STOCK. The term "Common Stock" shall mean the class of capital
stock of the Company designated as Common Stock, par value $1.00 per share, at
the date hereof. Subject to the provisions of Section 15.6, shares issuable on
conversion of Notes shall include only shares of such class or shares of any
class or classes 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 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
Notes 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. The term "Company" shall mean International Shipholding
Corporation, a Delaware corporation and, subject to the provisions of Article
XII, shall include its successors and assigns.
CONVERSION PRICE. The term "Conversion Price" shall have the meaning
specified in Section 15.4.
CORPORATE TRUST OFFICE. The term "Corporate Trust Office," or other
similar term, shall mean the office of the Trustee at which at any particular
time its corporate trust business as it relates to this Indenture shall be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 00000 Xxxxxxxxx Xxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx (International Shipholding
Corporation, ____% Convertible Subordinated Notes Due 2014).
CURRENT MARKET PRICE. The term "Current Market Price" shall have the
meaning specified in Section 15.5(h)(2).
CUSTODIAN. The term "Custodian" shall mean The Bank of New York, as
custodian with respect to the Notes in global form, or any successor entity
thereto.
DEFAULT. The term "default" shall mean any event that is, or after
notice or passage of time, or both, would be, an Event of Default.
3
DEFAULTED INTEREST. The term "Defaulted Interest" shall have the
meaning specified in Section 2.3.
DEPOSITARY. The term "Depositary" shall mean, with respect to the Notes
issuable or issued in whole or in part in global form, the person specified in
Section 2.5(d) as the Depositary with respect to such Notes, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
EVENT OF DEFAULT. The term "Event of Default" shall mean any event
specified in Section 7.1 continued for the period of time, if any, and after the
giving of notice, if any, therein designated.
EXCHANGE ACT. The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
EXCHANGE DATE. The term "Exchange Date" shall mean the date on which
the Notes are issued in exchange for all of the outstanding shares of Preferred
Stock.
"EX" DATE. The term "ex" date shall have the meaning specified in
Section 15.5(h)(2).
EXPIRATION TIME. The term "Expiration Time" shall have the meaning
specified in Section 15.5(f).
FAIR MARKET VALUE. The term "fair market value" shall have the meaning
specified in Section 15.5(h)(3).
GLOBAL NOTE. The term "Global Note" shall have the meaning specified in
Section 2.5(b).
INDEBTEDNESS. The term "Indebtedness" shall mean, with respect to any
person, all obligations, whether or not contingent, of such person (i) (a) for
borrowed money, whether or not evidenced by a note, Note, bond, or other written
instrument, (b) evidenced by a note, Note, bond or other written instrument, (c)
under a lease required to be capitalized on the balance sheet of the lessee
under generally accepted accounting principles or under any lease or related
document (including a purchase agreement) that provides that the lessee is
contractually obligated to purchase or cause a third party to purchase and
thereby guarantee a minimum residual value of the leased property to the lessor
and the obligations of the lessee under such lease or related document to
purchase or to cause a third party to purchase such leased property, (d) in
respect of letters of credit, bank guarantees or bankers' acceptances (including
reimbursement obligations with respect to any of the foregoing), (e) with
respect to Indebtedness secured by a mortgage, pledge, lien, encumbrance, charge
or adverse claim affecting title or an encumbrance to which the property or
assets of such person are subject, whether or not the obligation secured thereby
shall have been assumed by or shall otherwise be such person's legal liability,
(f) in respect of the balance of deferred and unpaid purchase price of any
property or assets, (g) under interest rate or
4
currency swap agreements, cap, floor and collar agreements, spot and forward
contracts and similar agreements and arrangements; (ii) with respect to any
obligation of others of the type described in the preceding clause (i) or under
clause (iii) below assumed by or guaranteed in any manner by such person or in
effect guaranteed by such person through an agreement to purchase (including,
without limitation, "take or pay" and similar arrangements), contingent or
otherwise (and the obligations of such person under any such assumptions,
guarantees or other such arrangements); and (iii) any and all Indebtedness
constituting deferrals, renewals, extensions, refinancings and refundings of, or
amendments, modifications or supplements to, any of the foregoing.
INDENTURE. The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
MATURITY DATE. The term "Maturity Date" shall mean _____________, 2014.
NEW RIGHTS PLAN. The term "New Rights Plan" shall have the meaning
specified in Section 15.5(d).
NON-ELECTING SHARE. The term "non-electing share" shall have the
meaning specified in Section 15.6.
NOTE OR NOTES. The terms "Note" or "Notes" shall mean any Note or
Notes, as the case may be, authenticated and delivered under this Indenture.
NOTEHOLDER; HOLDER. The terms "Noteholder" or "holder" as applied to
any Note, or other similar terms (but excluding the term "beneficial holder"),
shall mean any person in whose name at the time a particular Note is registered
on the Note register.
NOTE REGISTER. The term "Note register" shall have the meaning
specified in Section 2.5.
NOTE REGISTRAR. The term "Note registrar" shall have the meaning
specified in Section 2.5(a).
OFFICERS' CERTIFICATE. The term "Officers' Certificate," when used with
respect to the Company, shall mean a certificate signed by (a) one of the
President, the Chief Executive Officer, Executive or Senior Vice President, any
Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") or the Chief Financial
Officer and (b) by one of the Treasurer or any Assistant Treasurer, Secretary or
any Assistant Secretary, or the Controller of the Company, which is delivered to
the Trustee. Each such certificate shall include the statements provided for in
Section 16.5 if and to the extent required by the provisions of such Section.
OPINION OF COUNSEL. The term "Opinion of Counsel" shall mean an opinion
in writing signed by legal counsel, who may be an employee of or counsel to the
Company, or other counsel acceptable to the Trustee, which is delivered to the
Trustee. Each such opinion shall
5
include the statements provided for in Section 16.5 if and to the extent
required by the provisions of such Section.
OUTSTANDING. The term "outstanding," when used with reference to Notes,
shall, subject to the provisions of Section 9.4, mean, as of any particular
time, all Notes authenticated and delivered by the Trustee under this Indenture,
except
(a) Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Notes, or portions thereof, for the payment, redemption or
purchase of which monies in the necessary amount shall have been deposited in
trust pursuant hereto with the Trustee or with any paying agent (other than the
Company) or shall have been set aside and segregated in trust by the Company (if
the Company shall act as its own paying agent); provided that if such Notes are
to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as provided in Section 3.3, or provision satisfactory to the
Trustee shall have been made for giving such notice; and provided further that
if such Notes are to be purchased prior to the maturity thereof in connection
with a Change in Control, a Change in Control Purchase Notice shall have been
received as provided in Section 3.6.
(c) Notes in lieu of which, or in substitution for which,
other Notes shall have been authenticated and delivered pursuant to the terms of
Section 2.6 unless proof satisfactory to the Trustee is presented that any such
Notes are held by bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article XV
and Notes deemed not outstanding pursuant to Section 3.4 or 3.6.
PAYMENT BLOCKAGE NOTICE. The term "Payment Blockage Notice" has the
meaning specified in Section 4.2(b).
PERSON. The term "person" shall mean a corporation, a limited liability
company, an association, a partnership, an individual, a joint venture, a joint
stock company, a trust, an unincorporated organization or any other entity or
organization, including a government or an agency, instrumentality or political
subdivision thereof.
PREDECESSOR NOTE. The term "Predecessor Note" of any particular Note
shall mean every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.6 in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note that it replaces.
PREFERRED STOCK. The term "Preferred Stock" shall mean the _______%
Convertible Exchangeable Preferred Stock of the Company.
PURCHASED SHARES. The term "Purchased Shares" shall have the meaning
specified in Section 15.5(f).
6
RECORD DATE. The term "Record Date" shall have the meaning specified in
Section 15.5(h)(4).
REFERENCE PERIOD. The term "Reference Period" shall have the meaning
specified in Section 15.5(d).
REPRESENTATIVE. The term "Representative" means the (a) indenture
trustee or other trustee, agent or representative for any Senior Indebtedness or
(b) with respect to any Senior Indebtedness that does not have any such trustee,
agent or other representative, (i) in the case of such Senior Indebtedness
issued pursuant to an agreement providing for voting arrangements as among the
holders or owners of such Senior Indebtedness, any holder or owner of such
Senior Indebtedness acting with the consent of the required persons necessary to
bind such holders or owners of such Senior Indebtedness and (ii) in the case of
all other such Senior Indebtedness, the holder or owner of such Senior
Indebtedness.
RESPONSIBLE OFFICER. The term "Responsible Officer", when used with
respect to the Trustee, shall mean an officer of the Trustee assigned to the
Corporate Trust Office, and any officer of the Trustee to whom such matter is
referred to because of his, her or its knowledge of and familiarity with the
particular subject.
RIGHTS PLAN. The term "Rights Plan" shall have the meaning specified in
Section 15.5(d).
RULE 144. The term "Rule 144" shall mean Rule 144 as promulgated under
the Securities Act.
SECURITIES. The term "Securities" shall have the meaning specified in
Section 15.5(d).
SECURITIES ACT. The term "Securities Act" means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
SENIOR INDEBTEDNESS. The term "Senior Indebtedness" means the principal
of, premium, if any, and interest on any Indebtedness of the Company (including,
without limitation, any interest accruing after the filing of a petition by or
against the Company under any bankruptcy law, whether or not allowed as a claim
after such filing in any proceeding under such bankruptcy law), or any other
payment of Indebtedness, whether outstanding on the date of this Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the
Company (including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to the foregoing); provided, however,
that Senior Indebtedness does not include (i) Indebtedness evidenced by the
Notes, (ii) any liability for federal, state, local or other taxes owed or owing
by the Company, (iii) Indebtedness of the Company to any Subsidiary, (iv) any
trade payables of the Company incurred in the ordinary course of its business,
and (v) any indebtedness in which the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such Indebtedness
shall not be senior in right of payment to, or is pari passu with, or
subordinated or junior to, the Notes.
7
SUBSIDIARY. The term "Subsidiary" means a corporation more than 50% of
the outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
TENDER EXPIRATION TIME. The term "Tender Expiration Time" shall have
the meaning specified in Section 15.5(g).
TENDER PURCHASED SHARES. The term "Tender Purchased Shares" shall have
the meaning specified in Section 15.5(g).
TRADING DAY. The term "Trading Day" has the meaning specified in
Section 15.5(h)(5).
TRANSFER AGENT. The term "Transfer Agent" means American Stock Transfer
& Trust Company or such other agent or agents of the Company as may be
designated by the Board of Directors as the transfer agent for the Preferred
Stock.
TRIGGER EVENT. The term "Trigger Event" shall have the meaning
specified in Section 15.5(d).
TRUST INDENTURE ACT. The term "Trust Indenture Act" shall mean the
Trust Indenture Act of 1939, as amended, as it was in force at the date of
execution of this Indenture, except as provided in Sections 11.3 and 15.6;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after the date hereof, the term "Trust Indenture Act" shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939 as so amended.
TRUSTEE. The term "Trustee" shall mean The Bank of New York and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.
UNDERWRITER. The term "Underwriter" shall mean Xxxxxx, Xxxxx Xxxxx,
Incorporated.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
SECTION 2.1 DESIGNATION, AMOUNT AND ISSUE OF NOTES. The Notes shall be
designated as "_____% Convertible Subordinated Notes Due 2014." Notes not to
exceed the aggregate principal amount of $_______________ (or $_______________
if the over-allotment option set forth in Section [ ] of the Underwriting
Agreement dated _______________, 2004 (as amended from time to time by the
parties thereto) by and between the Company and the Underwriter is
8
exercised in full) (except pursuant to Sections 2.5, 2.6, 3.3 and 15.2) upon the
execution of this Indenture, or from time to time thereafter, may be executed by
the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Notes upon the written order of
the Company, signed by the Company's (a) President, Chief Executive Officer,
Executive or Senior Vice President, any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "Vice President") or Chief Financial Officer and (b) Treasurer or
Assistant Treasurer or its Secretary or any Assistant Secretary, without any
further action by the Company hereunder; provided, however, that said Notes may
not be executed, delivered or authenticated unless and until (i) the Company may
legally issue said Notes in accordance with the Delaware General Corporation
Law, as amended, and (ii) the Trustee shall have received an Officer's
Certificate and Opinion of Counsel in accordance with Section 16.5. The Notes
may only be issued upon the exchange of all outstanding Preferred Stock.
SECTION 2.2 FORM OF NOTES. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed or designated for issuance, or to conform to usage.
Any Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect transfers or exchanges permitted hereby. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest and premium, if any (including
any redemption or purchase price), on any Global Note shall be made to the
holder of such Note.
The terms and provisions contained in the form of Note attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
SECTION 2.3 DATE AND DENOMINATION OF NOTES; MATURITY; PAYMENTS OF
INTEREST. The Notes shall be issuable in registered form without coupons in
denominations of $50 principal amount and integral multiples thereof equal to
the number of shares of Preferred Stock for which the Notes are exchanged. Every
Note shall be dated the date of its authentication and, except as
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provided in this Section, shall bear interest at the annual rate of _____%,
payable quarterly on the _________ day of _________, _________, _________ and
_________ of each year, commencing on the first such date after the Exchange
Date, from the most recent date to which interest has been paid or duly provided
for, or if no interest has been paid or duly provided for on the Notes, from the
Exchange Date, until payment of the principal sum has been made or fully
provided for. The Notes will mature on the Maturity Date, regardless of the
Exchange Date, unless earlier converted, redeemed or purchased. Notwithstanding
the foregoing, when there is no existing default in the payment of interest on
the Notes, all Notes authenticated by the Trustee after the close of business on
the record date (as defined in this Section 2.3) for any interest payment date
(the _________ day of _________, _________, _________ or _________, as the case
may be) and prior to such interest payment date shall be dated the date of
authentication but shall bear interest from such interest payment date;
provided, however, that if and to the extent that the Company shall default in
interest due on such interest payment date then any such Note shall bear
interest from the _________ day of _________, _________, _________ or _________,
as the case may be, immediately preceding the date of such Note to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for on the Notes, from the Exchange Date.
The person in whose name any Note (or its Predecessor Note) is
registered at the close of business on any record date with respect to any
interest payment date (including any Note that is converted after the record
date and on or before the interest payment date) shall be entitled to receive
the interest payable on such interest payment date notwithstanding the
cancellation of such Note upon any transfer, exchange or conversion subsequent
to the record date and on or prior to such interest payment date. Interest may,
at the option of the Company, be paid by check mailed to the address of such
person on the registry kept for such purposes; provided that, with respect to
any holder of Notes with an aggregate principal amount equal to or in excess of
$2,000,000, at the request of such holder in writing to the Company, interest on
such holder's Notes shall be paid by wire transfer in immediately available
funds in accordance with the wire transfer instruction supplied by such holder
to the Trustee and paying agent (if different from Trustee). Interest payable
with respect to Notes held in the form of a Global Note shall be paid to the
Depositary by wire transfer in immediately available funds in accordance with
the applicable procedures of the Depositary. The term "record date" with respect
to any interest payment date shall mean the _________ day of _________,
_________, _________ or _________, as the case may be, preceding said _________
day of _________, _________, _________ or _________, as the case may be.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any said _________ day of _________, _________,
_________ or _________ (herein called "Defaulted Interest") shall forthwith
cease to be payable to the Noteholder on the relevant record date by virtue of
his, her or it having been such Noteholder; and such Defaulted Interest shall be
paid by the Company, at its election in each case, as provided in clause (1) or
(2) below:
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(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Notes (or their respective
Predecessor Notes) 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 to be paid on each Note and
the date of the payment (which shall be not less than twenty-five (25)
days after the receipt by the Trustee of such notice, unless the
Trustee shall consent to an earlier date), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount 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 fifteen (15) days and not less
than ten (10) days prior to the date of the proposed payment and not
less than ten (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 Noteholder as of such special record date at
his, her or its address as it appears in the Note register, not less
than ten (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 Notes (or their respective
Predecessor Notes) were 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 or automated quotation system on which the Notes
may be listed or designated for issuance, and upon such notice as may
be required by such exchange or automated quotation system, 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.
SECTION 2.4 EXECUTION OF NOTES. The Notes shall be signed in the name
and on behalf of the Company by the facsimile signature of its President, its
Chief Executive Officer, any of its Executive or Senior Vice Presidents, or any
of its Vice Presidents (whether or not designated by a number or numbers or word
or words added before or after the title "Vice President") and attested by the
manual or facsimile signature of its Secretary or any of its Assistant
Secretaries (which may be printed, engraved or otherwise reproduced thereon, by
facsimile or otherwise). Only such Notes as shall bear thereon a certificate of
authentication substantially in the form set forth on the form of Note attached
as Exhibit A hereto, manually executed by the Trustee (or an authenticating
agent appointed by the Trustee as provided by Section 16.11), shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee (or such an authenticating agent) upon any Note
executed by the Company shall be
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conclusive evidence that the Note so authenticated has been duly authenticated
and delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
SECTION 2.5 EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES.
(a) The Company shall cause to be kept at the Corporate Trust
Office or other office of the Trustee or its Affiliate a register (the register
maintained in such office and in any other office or agency of the Company
designated pursuant to Section 5.2 being herein sometimes collectively referred
to as the "Note register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Notes and of
transfers of Notes. Such register shall be in written form or in any form
capable of being converted into written form within a reasonable period of time.
The Trustee is hereby initially appointed "Note registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 5.2. There shall be
only one Note register.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount. Notes may be exchanged for other Notes of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at any such office or agency. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Noteholder making
the exchange is entitled to receive, bearing registration numbers not
contemporaneously outstanding.
All Notes presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee, the Note registrar
or any co-registrar) be duly endorsed, or be accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company and duly
executed, by the Noteholder thereof or his, her or its attorney duly authorized
in writing.
No service charge shall be charged to the Noteholder for any exchange
or registration of transfer of Notes.
None of the Company, the Trustee, the Note registrar or any
co-registrar shall be required to exchange or register a transfer of (a) any
Notes for a period of fifteen (15) days next preceding
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any selection of Notes to be redeemed or (b) any Notes called for redemption or,
if a portion of any Note is selected or called for redemption, such portion
thereof selected or called for redemption or (c) any Notes surrendered for
conversion or, if a portion of any Note is surrendered for conversion, such
portion thereof surrendered for conversion or (d) any Notes tendered for
purchase or, if a portion of a Note is tendered for purchase, such portion
thereof tendered for purchase.
All Notes issued upon any transfer or exchange of Notes in accordance
with this Indenture shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture as the
Notes surrendered upon such registration of transfer or exchange.
(b) So long as the Notes are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all Notes
that are so eligible may be represented by a Note or Notes in global form (the
"Global Note" or "Global Notes") registered in the name of the Depositary or the
nominee of the Depositary, except as otherwise specified below. The transfer,
conversion and exchange of beneficial interests in the Global Note shall be
effected through the Depositary in accordance with this Indenture and the
procedures of the Depositary therefor.
Transfers of interests in a Global Note will be made in accordance with
the standing instructions and procedures of the Depositary and its participants.
The Trustee shall make appropriate endorsements to reflect increases or
decreases in the Global Note as set forth on the face of the Global Note to
reflect any such transfers.
Except as provided below, beneficial owners of an interest in a Global
Note shall not be entitled to have certificates registered in their names, will
not receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered holders of such Global Notes. No
definitive Note, or portion thereof, in respect of which the Company or an
Affiliate of the Company held any beneficial interest shall be included in a
Global Note. The Trustee shall authenticate Notes in definitive form upon any
transfer of a beneficial interest in any Global Note to the Company or any
Affiliate of the Company.
(c) Any Global Note may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Indenture as may be required by the Custodian, the
Depositary, the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc. or any other exchange or
automated quotation system in which the Notes are then authorized for trading in
order to comply with any applicable law or any regulation thereunder or with the
rules and regulations of any securities exchange upon which the Notes may be
listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular Notes
are subject.
(d) Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in this Section 2.5(d)), a Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the
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Depositary or another nominee to a successor Depositary or a nominee of such
successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Notes. Initially, the Global Note shall be
issued to the Depositary, registered in the name of Cede & Co., as the nominee
of the Depositary, and deposited with the Custodian for Cede & Co.
If at any time: (A) the Depositary for a Global Note (i) has notified
the Company that it is unwilling or unable to continue as Depositary for such
Global Note and a successor depositary has not been appointed by the Company
within ninety (90) calendar days, or (ii) has ceased to be a clearing agency
registered under the Exchange Act and no successor clearing agency has been
appointed by the Company within ninety (90) calendar days; (B) an Event of
Default has occurred and is continuing; or (C) the Company, in its sole
discretion, notifies the Trustee in writing that it no longer wishes to have all
the Notes represented by Global Notes, the Company will execute, and the Trustee
will authenticate and deliver, Notes in certificated form, in an aggregate
principal amount equal to the principal amount of the Global Note, in exchange
for such Global Note. Any Global Note exchanged pursuant to clause (A) or (B)
above shall be so exchanged in whole and not in part, and any Global Note
exchanged pursuant to clause (C) above may be exchanged in whole or in part from
time to time as directed by the Company. Notes in definitive form issued in
exchange for all or a part of a Global Note pursuant to this Section 2.5(d)
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. Upon execution and authentication, the
Trustee shall deliver such Notes in certificated form to the persons in whose
names such Notes in definitive form are so registered. Any Global Note exchanged
pursuant to clause (A) or (B) above shall be so exchanged in whole and not in
part and any Global Note exchanged pursuant to clause (C) above may be exchanged
in whole or from time to time in part as directed by the Company.
At such time as all interests in a Global Note have been redeemed,
converted, exchanged, purchased or canceled for Notes in definitive form, or
transferred to a transferee who receives Notes in definitive form, such Global
Note shall be, upon receipt thereof, canceled by the Trustee in accordance with
standing procedures and instructions existing between the Custodian and
Depositary. At any time prior to such cancellation, if any interest in a Global
Note is exchanged for Notes in certificated form, redeemed, converted,
exchanged, purchased by the Company or canceled, or transferred for part of a
Global Note, the principal amount of such Global Note shall, in accordance with
the standing procedures and instructions existing between the Custodian and the
Depositary, be reduced or increased, as the case may be, and an endorsement
shall be made on such Global Note, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase.
(e) Any Note or Common Stock issued upon the conversion or
exchange of a Note that is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
14
in such Note or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144). Any Note or Common Stock issued in
definitive form to the Company or any Affiliate thereof shall be endorsed with
or have incorporated in the text thereof such legends or recitals as necessary
to set forth the foregoing restrictions.
SECTION 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its request the Trustee or an authenticating
agent appointed by the Trustee shall authenticate and deliver, a new Note,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Note, or in lieu of and in substitution for the Note so
destroyed, lost or stolen. In every case the applicant for a substituted Note
shall furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be required by them to
save each of them harmless for any loss, liability, cost or expense caused by or
connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, 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 connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption, or tendered for purchase in connection with a Change in
Control, or is about to be converted into Common Stock shall become mutilated or
be destroyed, lost or stolen, the Company may, instead of issuing a substitute
Note, pay or authorize the payment of or convert or authorize the conversion of
the same (without surrender thereof except in the case of a mutilated Note), as
the case may be, if the applicant for such payment or conversion shall furnish
to the Company, to the Trustee and, if applicable, to such authenticating agent
such security or indemnity as may be required by them to save each of them
harmless for any loss, liability, cost or expense caused by or connected with
such substitution, and, in case of destruction, loss or theft, evidence
satisfactory to the Company, the Trustee and, if applicable, any paying agent or
conversion agent of the destruction, loss or theft of such Note and of the
ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section
2.6 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
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SECTION 2.7 TEMPORARY NOTES. Pending the preparation of definitive
Notes or any Global Note, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon written request of the
Company, authenticate and deliver temporary Notes (printed or lithographed).
Temporary Notes shall be issuable in any authorized denomination, and
substantially in the form of the definitive Notes but with such omissions,
insertions and variations as may be appropriate for temporary Notes, all as may
be determined by the Company. Every such temporary Note shall be executed by the
Company and authenticated by the Trustee or such authenticating agent upon the
same conditions and in substantially the same manner, and with the same effect,
as the definitive Notes. Without unreasonable delay the Company will execute and
deliver to the Trustee or such authenticating agent definitive Notes and
thereupon any or all temporary Notes may be surrendered in exchange therefor, at
each office or agency maintained by the Company pursuant to Section 5.2 and the
Trustee or such authenticating agent shall authenticate and deliver in exchange
for such temporary Notes an equal aggregate principal amount of definitive
Notes. Such exchange shall be made by the Company at its own expense and without
any charge therefor. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits and subject to the same limitations
under this Indenture as definitive Notes authenticated and delivered hereunder.
SECTION 2.8 CANCELLATION OF NOTES PAID, ETC. All Notes surrendered for
the purpose of payment, redemption, purchase, conversion, exchange or
registration of transfer, shall, if surrendered to the Company or any paying
agent or any Note registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Notes shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. Upon written
instructions of the Company, the Trustee shall destroy canceled Notes and, after
such destruction, shall, if requested by the Company, deliver a certificate of
such destruction to the Company. If the Company shall acquire any of the Notes,
such acquisition shall not operate as a redemption, purchase or satisfaction of
the indebtedness represented by such Notes unless and until the same are
delivered to the Trustee for cancellation.
ARTICLE III
REDEMPTION AND REPURCHASE OF NOTES
SECTION 3.1 REDEMPTION OF NOTES AT OPTION OF THE COMPANY. Except as
provided in Section 3.2, the Company may not redeem any Notes prior to
__________, 2006. On or after __________, 2006, and prior to the Maturity Date,
the Notes may, subject to the last paragraph of Section 3.4, be redeemed at the
option of the Company, in whole or in part, at any time or from time to time,
upon notice as set forth in Section 3.3 and subject to the provisions for
partial redemption described below, for cash, at the redemption prices set forth
in the form of Note attached as Exhibit A hereto, plus an amount equal to
accrued and unpaid interest, if any, to, but excluding, the date fixed for
redemption; provided that prior to __________ __, 2007, the Notes may not be
redeemed by the Company, except as provided in Section 3.2, unless the Closing
Price of Common Stock (or, if more than one class of Common Stock is then issued
and outstanding, all classes of Common Stock) has exceeded 150% of the
Conversion Price for at
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least 20 Trading Days during any period of 30 consecutive Trading Days ending
within five Trading Days prior to the notice of redemption.
SECTION 3.2 OPTIONAL REDEMPTION OF NOTES UPON A CHANGE IN CONTROL. Upon
the occurrence of a Change in Control, the Notes may, subject to the last
paragraph of Section 3.4, be redeemed at the option of the Company, in whole but
not in part, on a date which is not later than sixty (60) Business Days
following the effective date of the event or circumstance resulting in the
Change in Control, upon notice as set forth in Section 3.3, for cash at the
redemption prices set forth in the form of Note attached as Exhibit A hereto,
plus an amount equal to accrued and unpaid interest, if any, to, but excluding,
the date fixed for redemption.
SECTION 3.3 NOTICE OF REDEMPTION; SELECTION OF NOTES.
(a) If the Company elects to exercise its right to redeem all
or any part of the Notes pursuant to Section 3.1, it shall fix a date for
redemption and it, or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below unless a shorter period is agreed to
by the Trustee), the Trustee, in the name of and at the expense of the Company,
shall mail or cause to be mailed a notice of such redemption not fewer than
thirty (30) nor more than sixty (60) days prior to the date fixed for redemption
to each holder of Notes to be redeemed in whole or in part at its last address
as the same appears on the Note register and to the Beneficial Owners in
accordance with the procedures established by the Depositary and the Trustee;
provided that if the Company shall give such notice, it shall also give such
notice, and notice of the Notes to be redeemed, to the Trustee. Such mailing
shall be by first class mail. The notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Note designated for
redemption in whole or in part shall not affect the validity of the proceedings
for the redemption of any other Note. Concurrently with the mailing of any such
notice of redemption, the Company shall (i) issue a press release announcing
such redemption, (ii) publish such information once in a daily newspaper printed
in the English language and of general circulation in the Borough of Manhattan,
City of New York, New York, and (iii) publish such information on the Company's
website; it being understood that the form and content of such press release and
such publications shall be determined by the Company in its sole discretion.
None of the failure to issue any such press release nor make such publications
nor any defect therein shall affect the validity of the redemption notice or any
of the proceedings for the redemption of any Note called for redemption.
(b) If the Company elects to exercise its right to redeem the
Notes in whole pursuant to Section 3.2, it shall fix a date for redemption and
it, or at its written request (which must be received by the Trustee at least
five (5) Business Days prior to the date the Trustee is requested to give notice
as described below unless a shorter period is agreed to by the Trustee), the
Trustee, in the name of and at the expense of the Company, shall mail or cause
to be mailed a notice of such redemption on a date that is at least thirty (30)
and not more than sixty (60) days prior to the date fixed for redemption, which
shall not be later than sixty (60) days following the effective date of the
event or circumstance resulting in the Change in Control, to each holder of
Notes at its last address as the same appears on the Note register and to the
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Beneficial Owners in accordance with the procedures established by the
Depositary and the Trustee, provided that if the Company shall give such notice,
it shall also give such notice to the Trustee. Such mailing shall be by first
class mail. The notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Note shall not affect the validity of
the proceedings for the redemption of any other Note. The notice shall state
that a Change in Control has occurred or may occur and shall describe the event
or circumstance which has resulted or may result in a Change in Control, shall
be accompanied by a copy of any press release or other public announcement of
the Change in Control event, and may state that the Company's obligation to
redeem the Notes is subject to consummation of the Change in Control event.
Concurrently with the mailing of any such notice of redemption, the Company
shall (i) issue a press release announcing such redemption, (ii) publish such
information once in a daily newspaper printed in the English language and of
general circulation in the Borough of Manhattan, City of New York, New York, and
(iii) publish such information on the Company's website; it being understood
that the form and content of such press release and such publications shall be
determined by the Company in its sole discretion. None of the failure to issue
any such press release nor make such publications nor any defect therein shall
affect the validity of the redemption notice or any of the proceedings for the
redemption of any Note called for redemption.
(c) In addition to the information specified in Section
3.3(b), if applicable, each such notice of redemption shall indicate that the
Company has exercised its right to redeem the Notes in respect of which notice
is given and shall specify the aggregate principal amount of Notes to be
redeemed, the CUSIP number or numbers of the Notes being redeemed, the date
fixed for redemption (which shall be a Business Day), the redemption price at
which Notes are to be redeemed, the place or places of payment that payment will
be made upon presentation and surrender of such Notes, including any procedures
applicable to a redemption to be accomplished through book-entry transfer, that
accrued and unpaid interest to (but excluding) the date fixed for redemption
will be paid as specified in said notice, and that on and after said date
interest thereon or on the portion thereof to be redeemed (as the case may be)
will cease to accrue. Such notice shall also state the current Conversion Price
and the date on which the right to convert such Notes or portions thereof into
Common Stock will expire. If fewer than all the Notes are to be redeemed, the
notice of redemption shall identify the Notes to be redeemed (including CUSIP
numbers). In the event any Note represented by a certificate is to be redeemed
in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that, on and after the date fixed
for redemption, upon presentation and surrender of such Note, a new Note or
Notes in an aggregate principal amount equal to the unredeemed portion thereof
will be issued without cost to the holder of such Note.
(d) If the Company gives notice of redemption as provided in
this Section 3.3, then the Company shall, on the date fixed for redemption,
before 12:00 p.m., New York City time, with respect to: (i) Notes held by the
Depositary or its nominees, deposit or cause to be deposited, irrevocably with
the Trustee or any paying agent an amount of money sufficient to redeem on the
date fixed for redemption all the Notes so called for redemption (other than
those theretofore surrendered for conversion into Common Stock) at the
applicable redemption price, together with accrued and unpaid interest, if any,
to, but excluding, the date fixed for redemption
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and shall give the Trustee or any paying agent irrevocable instructions and
authority to pay such amount to holders of such Notes upon book-entry transfer
of such Notes to the Trustee's account at the Depositary; (ii) Notes held in
certificated form, deposit or cause to be deposited, irrevocably with the
Trustee an amount of money sufficient to redeem on the date fixed for redemption
all the Notes so called for redemption (other than those theretofore surrendered
for conversion into Common Stock) at the applicable redemption price, together
with accrued and unpaid interest, if any, to, but excluding, the date fixed for
redemption and shall give the Trustee irrevocable instructions and authority to
pay such amount to holders of such Notes upon surrender of their certificates
evidencing such Notes.
(e) Payment of the redemption price for Notes, together with
accrued and unpaid interest, if any, to, but excluding, the date fixed for
redemption is conditioned upon book-entry transfer or physical delivery of
certificates representing the Notes, together with any necessary endorsements,
to the Trustee, or the Trustee's account at the Depositary, at any time after
delivery of the notice of redemption. The Company shall be entitled to retain
any interest, yield or gain on amounts deposited with the Trustee or any paying
agent pursuant to this Section 3.3 in excess of the amounts required hereunder
to pay the redemption price and accrued and unpaid interest to, but excluding,
the date fixed for redemption. Payment of the redemption price for the Notes,
together with accrued and unpaid interest to (but excluding) the date fixed for
redemption, will be made: (i) if book-entry transfer or physical delivery of the
Notes has been made by or on the date fixed for redemption, on the date fixed
for redemption, or (ii) if book-entry transfer or physical delivery of the Notes
has not been made by or on such date, at the time of book-entry transfer or
physical delivery of the Notes. If any Note called for redemption is converted
into Common Stock pursuant to Article XV prior to the date fixed for redemption,
any money deposited with the Trustee or any paying agent or segregated and held
in trust for the redemption of such Note shall be paid to the Company or, if
then held by the Company, shall be discharged from such trust. Whenever any
Notes are to be redeemed pursuant to Section 3.1 or 3.2, the Company will give
the Trustee written notice in the form of an Officers' Certificate not fewer
than sixty (60) days (or such shorter period of time as may be acceptable to the
Trustee) prior to the date fixed for redemption as to the aggregate principal
amount of Notes to be redeemed.
(f) If less than all of the outstanding Notes are to be
redeemed, the Trustee shall select the Notes or portions thereof of the Global
Note or the Notes in certificated form to be redeemed (in principal amounts of
$50 or integral multiples thereof) by lot, on a pro rata basis or by another
method the Trustee deems fair and appropriate in its sole discretion. If a
portion of a holder's Notes are selected for redemption pursuant to Section 3.1
and such holder elects to convert a portion of its Notes into Common Stock
pursuant to Article XV prior to the date fixed for redemption, then such
converted portion shall be deemed to be taken from the portion selected for
redemption. The Notes (or portions thereof) so selected shall be deemed duly
selected for redemption for all purposes hereof, notwithstanding that any such
Note is submitted for conversion, into Common Stock pursuant to Article XV, in
whole or in part, before the mailing of the notice of redemption. In the event
any Note represented by a certificate is to be redeemed in part only, upon
presentation of such Note, the Company shall execute and the Trustee shall
authenticate and deliver to the holder of such Note, at the expense of the
Company, a new Note or Notes in an aggregate principal amount equal to the
unredeemed portion of such Note.
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(g) Upon any redemption of less than all of the outstanding
Notes, the Company and the Trustee may (but need not), solely for purposes of
determining the pro rata allocation among such Notes as are unconverted and
outstanding at the time of redemption, treat as outstanding any Notes
surrendered for conversion into Common Stock pursuant to Article XV, during the
period of fifteen (15) days immediately preceding the mailing of a notice of
redemption, and may (but need not) treat as outstanding any Note authenticated
and delivered during such period in exchange for the unconverted portion of any
Note converted into Common Stock pursuant to Article XV, in part during such
period.
SECTION 3.4 PAYMENT OF NOTES CALLED FOR REDEMPTION BY COMPANY. If
notice of redemption has been given as provided above, the Notes or portion of
Notes with respect to which such notice has been given shall, unless converted
into Common Stock pursuant to Article XV, become due and payable on the date and
at the place or places stated in such notice at the applicable redemption price,
together with accrued and unpaid interest to, but excluding, the date fixed for
redemption, and if the Trustee or any paying agent holds, in accordance with
this Section 3.4, money sufficient to pay the redemption price of the Notes
called for redemption, together with accrued and unpaid interest to, but
excluding, the date fixed for redemption, on and after said date (unless the
Company shall default in the payment of such Notes at the redemption price,
together with accrued and unpaid interest to, but excluding, said date, in which
case the Notes will remain outstanding and interest shall continue to accrue
until the Company pays the redemption price, together with accrued and unpaid
interest to (but excluding) the date of such payment)) interest on the Notes or
portion of Notes called for redemption shall cease
to accrue, such Notes shall be deemed to be no longer outstanding and, except
as provided in Sections 8.5 and 13.4, shall cease to be entitled to any benefit
or security under this Indenture, such Notes shall cease after the close of
business on the Business Day immediately preceding the date fixed for redemption
to be convertible into Common Stock and the holders thereof shall have no right
in respect of such Notes except the right to receive the redemption price
thereof and accrued and unpaid interest to, but excluding, the date fixed for
redemption, without interest thereon. On presentation and surrender of such
Notes via book-entry transfer or physical delivery, such Notes to be redeemed
shall be paid and redeemed by the Company at the applicable redemption price,
together with payment of accrued and unpaid interest thereon to, but excluding,
the date fixed for redemption; provided that, if the date fixed for redemption
is after a record date and on or before the corresponding interest payment date,
holders of such Notes registered as such on such record date, subject to the
terms and provisions of Section 2.3 hereof, shall be entitled to receive the
interest payable on such Notes on the corresponding interest payment date, and
the amount payable to holders of such Notes on the date fixed for redemption
will not include any amount in respect of interest payable on such corresponding
interest payment date.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount equal to the unredeemed portion of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of redemption during the continuance of a default in payment
of interest or premium, if any, on
20
the Notes or of any Event of Default of which, in the case of any Event of
Default other than under Section 7.1(a) or (b), a Responsible Officer of the
Trustee has knowledge.
SECTION 3.5 RESERVED.
SECTION 3.6 REQUIRED PURCHASE AT OPTION OF HOLDER UPON A CHANGE IN
CONTROL.
(a) If there shall occur a Change in Control at any time prior
to the Maturity Date, and the Company does not elect to exercise the right to
redeem the Notes in whole pursuant to Section 3.2, Notes shall be purchased by
the Company, at the option of the holders thereof, in whole or in part (in
integral multiples of $50) as of the date (the "Change in Control Purchase
Date") specified by the Company that is 45 calendar days (or if such day is not
a Business Day, then the next succeeding Business Day) after the Company, or at
its request, the Trustee, has mailed written notice of such Change in Control to
holders of the Notes as set forth below, subject to satisfaction by or on behalf
of any holder of the requirements set forth below, for cash at a purchase price
equal to one-hundred percent (100%) of the aggregate principal amount thereof,
together with accrued and unpaid interest, if any, to, but excluding, the Change
in Control Purchase Date.
(b) Within 30 calendar days after the effective date of the
event or circumstance resulting in a Change in Control, the Company, or at its
written request (which must be received by the Trustee at least five (5)
Business Days prior to the date the Trustee is requested to give notice unless a
shorter period is agreed to by the Trustee), the Trustee, in the name of and at
the expense of the Company, shall mail a written notice of the Change in Control
to the holders of Notes at their last addresses as the same appear on the
Company's Note register and to the Beneficial Owners in accordance with the
procedures established by the Depositary and the Trustee, as of the date of the
Change in Control; provided that if the Company shall give such notice, it shall
also give such notice to the Trustee. Such mailing shall be by first class mail.
The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Note shall not affect the validity of the
proceedings for the purchase of any other Note. Concurrently with the mailing of
any such notice of Change in Control, the Company shall (i) issue a press
release announcing the Change in Control, (ii) publish such information once in
a daily newspaper printed in the English language and of general circulation in
the Borough of Manhattan, City of New York, New York, and (iii) publish such
information on the Company's website; it being understood that the form and
content of such press release and such publications shall be determined by the
Company in its sole discretion. None of the failure to issue any such press
release nor make such publications nor any defect therein shall affect the
validity of the notice of Change in Control or any of the proceedings for the
purchase of any Note. The notice shall include the form of a Change in Control
Purchase Notice to be completed by the holder and a copy of any press release or
other public announcement of the Change in Control event, and shall state:
(i) that a Change in Control has occurred or may
occur (including a description of the event or circumstance which has or may
result in a Change in Control), and that, as a result, the holders of Notes have
certain purchase rights;
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(ii) the Change in Control Purchase Date;
(iii) the date by which the Change in Control
Purchase Notice pursuant to this Section 3.6 must be given;
(iv) the purchase price that will be payable with
respect to the Notes as of the Change in Control Purchase Date;
(v) that, on the Change in Control Purchase Date, if
the Change in Control Purchase Notice is timely given, the purchase price of the
Notes subject to such Change in Control Purchase Notice, together with accrued
and unpaid interest, if any, to, but excluding, the Change in Control Purchase
Date, will become due and payable and interest on such Notes shall cease to
accrue;
(vi) the name and address of the Trustee;
(vii) the Conversion Price then in effect;
(viii) that Notes as to which a Change in Control
Purchase Notice has been given may be converted into Common Stock only to the
extent that the Change in Control Purchase Notice has been withdrawn in
accordance with the terms of this Section 3.6;
(ix) the procedures that the holder of Notes must
follow to exercise its rights under this Section 3.6;
(x) the procedures for withdrawing a Change in
Control Purchase Notice, including a form of notice of withdrawal; and
(xi) that the Company's obligation to redeem the
Notes may be subject to the consummation of the Change in Control event.
If any of the Notes is in the form of a Global Note, then the Company
shall modify such notice to the extent necessary to accord with the procedures
of the Depositary and the Trustee applicable to the purchase of Notes
represented by the Global Note.
(c) A holder of Notes may exercise its rights pursuant to this
Section 3.6 upon delivery of a written notice (a form of which is set forth on
the reverse of the Note) duly completed, which may be delivered by letter,
overnight courier, hand delivery, facsimile transmission or in any other written
form and, in the case of Notes represented by a Global Note, may be delivered
electronically or by other means in accordance with the Depositary's customary
procedures, of the exercise of such rights (a "Change in Control Purchase
Notice") to the Trustee at any time prior to the close of business on the
Business Day immediately before the Change in Control Purchase Date. Payment of
the purchase price for Notes, together with accrued and unpaid interest, if any,
to, but excluding, the Change in Control Purchase Date, is conditioned upon (i)
timely delivery of a completed Change in Control Purchase Notice and (ii)
book-entry
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transfer or physical delivery of the Notes, together with any necessary
endorsements, to the Trustee, or to the Trustee's account at the Depositary, at
any time after timely delivery of the Change in Control Purchase Notice. If a
holder timely delivers its Change in Control Purchase Notice, payment of the
purchase price for the Notes, together with accrued and unpaid interest, if any,
to, but excluding, the Change in Control Purchase Date, will be made: (i) if
book-entry transfer of or physical delivery of the Notes has been made by or on
the Change in Control Purchase Date, on the Change in Control Purchase Date, or
(ii) if book-entry transfer of or physical delivery of the Notes has not been
made by or on such date, at the time of book-entry transfer of or physical
delivery of the Notes.
(d) Notwithstanding anything herein to the contrary, any
holder of Notes delivering to the Trustee the Change in Control Purchase Notice
shall have the right to withdraw such Change in Control Purchase Notice in whole
or as to a portion of such holder's Notes that is an integral multiple of $50 at
any time prior to the close of business on the Business Day before the Change in
Control Purchase Date (unless the Company shall default in the payment of the
purchase price, together with accrued and unpaid interest to (but excluding) the
Change in Control Purchase Date, in which case, such withdrawal shall be
permitted until the Company pays the purchase price, together with accrued and
unpaid interest to (but excluding) the date of such payment) by delivery of a
written notice of withdrawal to the Trustee in accordance with the provisions of
this Section 3.6 specifying:
(i) the principal amount of Notes, in integral
multiples of $50, with respect to which such notice of withdrawal is being
submitted;
(ii) if certificated Notes have been issued, the
certificate numbers for such shares in respect of which such notice of
withdrawal is being submitted or, if such Notes are in the form of a Global
Note, such information as is required by the Depositary; and
(iii) the principal amount of Notes, if any, that
remain subject to the original Change in Control Purchase Notice and have been
or will be delivered for purchase by the Company.
The Trustee shall promptly notify the Company of the receipt
by it of any Change in Control Purchase Notice or written withdrawal thereof.
The Trustee will promptly return to the respective holders thereof any Notes
with respect to which a Change in Control Purchase Notice has been withdrawn in
compliance with this Section 3.6, in which case, upon such return, the Change in
Control Purchase Notice with respect thereto shall be deemed to have been
withdrawn. Any money deposited with the Trustee or any paying agent or
segregated and held in trust for the purchase of Notes as to which a Change in
Control Purchase Notice has been withdrawn shall be paid to the Company or, if
then held by the Company, shall be discharged from such trust.
(e) Anything herein to the contrary notwithstanding, in the
case of Notes held pursuant to a Global Note, any Change in Control Purchase
Notice may be delivered or withdrawn and the Notes in respect of such Global
Note may be delivered for purchase or
23
withdrawn in accordance with the applicable procedures of the Depositary as in
effect from time to time.
(f) The Company shall, on the Change in Control Purchase Date,
before 12:00 p.m., New York City time, with respect to: (i) all Notes or
portions thereof which are to be purchased pursuant to this Section 3.6 and are
held by the Depositary or its nominees, deposit or cause to be deposited,
irrevocably with the Trustee or any paying agent an amount of money sufficient
to pay the aggregate purchase price of all Notes or portions thereof which are
to be purchased pursuant to this Section 3.6 plus an amount equal to the accrued
and unpaid interest, if any, to (but excluding) the Change in Control Purchase
Date, and shall give the Trustee or any paying agent irrevocable instructions
and authority to pay such amount to holders of such Notes upon book-entry
transfer of such Notes to the Trustee's account at the Depositary; and (ii) all
Notes or portions thereof which are to be purchased pursuant to this Section 3.6
and are held in certificated form, deposit or cause to be deposited, irrevocably
with the Trustee an amount of money sufficient to pay the aggregate purchase
price of all Notes or portions thereof which are to be purchased pursuant to
this Section 3.6 plus an amount equal to the accrued and unpaid interest, if
any, to (but excluding) the Change in Control Purchase Date, and shall give the
Trustee irrevocable instructions and authority to pay such amount to holders of
the certificates evidencing such Notes upon surrender of the certificates
evidencing such Notes. The Company shall be entitled to retain any interest,
yield or gain on funds deposited with the Trustee or any paying agent pursuant
to this Section 3.6 in excess of the amounts required to pay the purchase price,
together with accrued and unpaid interest to (but excluding) the Change in
Control Purchase Date.
(g) If a Change in Control Purchase Notice has been given as
provided above, the purchase price of the Notes or portion of the Notes with
respect to which such Change in Control Purchase Notice has been given shall,
unless such Change in Control Purchase Notice is withdrawn pursuant to this
Section 3.6, become due and payable on the Change in Control Purchase Date
together with accrued and unpaid interest to, but excluding, the Change in
Control Purchase Date and if the Trustee or any paying agent holds, in
accordance with this Section 3.6, money sufficient to pay the purchase price of
the Notes to be purchased, together with accrued and unpaid interest to, but
excluding, the Change in Control Purchase Date, on and after the Change in
Control Purchase Date (unless the Company shall default in the payment of the
purchase price, together with accrued and unpaid interest to, but excluding, the
Change in Control Purchase Date, in which case the Notes will remain outstanding
and interest shall continue to accrue until the Company pays the purchase price,
together with accrued and unpaid interest to (but excluding) the date of such
payment), interest on such Notes shall cease to accrue, such Notes shall be
deemed no longer outstanding and, except as provided in Sections 8.5 and 13.4,
shall cease to be entitled to any benefit or security under this Indenture, the
holders of such Notes shall no longer have the right to withdraw any Change in
Control Purchase Notice in respect of such Notes after the close of business on
the Business Day immediately preceding the Change in Control Purchase Date and
the holders thereof shall have no right in respect of such Notes except the
right to receive the purchase price thereof and accrued and unpaid interest to,
but excluding, the Change in Control Purchase Date, without interest thereon.
Notes in respect of which a Change in Control Purchase Notice has been given by
the holder thereof may not be converted into shares of Common Stock on or after
the date of the delivery of such Change in
24
Control Purchase Notice unless such Change in Control Purchase Notice has first
been validly withdrawn as specified in this Section 3.6. On presentation and
surrender of such Notes via book-entry transfer or physical delivery, such Notes
to be purchased shall be paid and purchased by the Company at the purchase
price, together with payment of accrued and unpaid interest thereon to, but
excluding, the Change in Control Purchase Date; provided that, if the Change in
Control Purchase Date falls after a record date and on or before the
corresponding interest payment date holders of such Notes registered as such on
such record date, subject to the terms and provisions of Section 2.3 hereof,
shall be entitled to receive the interest payable on such Notes on the
corresponding interest payment date, and the amount payable to holders of such
Notes on the Change in Control Purchase Date will not include any amount in
respect of interest payable on such corresponding interest payment date.
(h) Upon presentation of any Note purchased in part only, the
Company shall execute and the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Company, a new Note or Notes, in an
aggregate principal amount equal to the unpurchased portion of such Note.
(i) The Company shall comply with any applicable provisions of
Rule 13e-4 and any other tender offer rules under the Exchange Act (including,
without limitation, a filing on Schedule TO or other schedule) to the extent
then applicable in connection with the purchase rights of the holders of the
Notes pursuant to this Section 3.6.
(j) To the extent the Company has insufficient funds to
purchase all Notes for which the Trustee has received a Change in Control
Purchase Notice that has not subsequently been withdrawn, the Trustee shall
select the Notes or portions thereof of the Global Note or the Notes in
certificated form to be purchased (in principal amounts of $50 or integral
multiples thereof) from the Notes for which the Trustee has received a Change in
Control Purchase Notice that has not subsequently been withdrawn by lot, on a
pro rata basis or by another method the Trustee deems fair and appropriate in
its sole discretion. To the extent the Company has insufficient funds to
purchase all Notes for which the Trustee has received a Change in Control
Purchase Notice that has not subsequently been withdrawn, the Company and the
Trustee may (but need not), solely for purposes of determining the pro rata
allocation among such Notes as are unconverted and outstanding on the Change in
Control Purchase Date, treat as outstanding any Notes surrendered for conversion
into Common Stock pursuant to Article XV, during the period of fifteen (15) days
immediately preceding the mailing of the notice of Change in Control pursuant to
Section 3.6(b), and may (but need not) treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted into Common Stock pursuant to Article XV, in part
during such period.
(k) The Company shall not be required to purchase any Notes
upon the occurrence of a Change in Control if a third party makes an offer to
purchase the Notes in the manner, for the amount, at the times and otherwise in
compliance with the requirements described in this Section 3.6 and purchases all
Notes for which the Trustee has received a Change in Control Purchase Notice
that has not subsequently been withdrawn.
25
(l) In the event of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which clause (i) of Section 12.1
applies as a result of which the Common Stock issuable upon conversion of the
Notes changed or exchanged into the right to receive stock, securities or other
property or assets (including cash), which includes Common Stock or common stock
of another person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of fifty percent
(50%) of the aggregate fair market value of such stock, securities or other
property or assets (including cash) (as determined by the Company, which
determination shall be conclusive and binding), then the person formed by such
consolidation or resulting from such merger or that acquires such assets, as the
case may be, shall execute and deliver to the Trustee a supplemental indenture
(accompanied by an Opinion of Counsel that such supplemental indenture complies
with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of this Indenture relating to
the right of holders of the Notes to cause the Company to purchase the Notes
following a Change in Control, including without limitation the applicable
provisions of this Section 3.6 and the definitions of Common Stock and Change in
Control, as appropriate, as determined in good faith by the Company (which
determination shall be conclusive and binding), to make such provisions apply to
such other person if different from the Company and the common stock issued by
such Person (in lieu of the Company and the Common Stock, respectively).
ARTICLE IV
SUBORDINATION OF NOTES
SECTION 4.1 AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each holder of Notes issued hereunder by his, her or its acceptance
thereof likewise covenants and agrees, that all Notes shall be issued subject to
the provisions of this Article IV; and each person holding any Note, whether
upon original issue or upon transfer, assignment or exchange thereof, accepts
and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all
Notes (including, but not limited to, the redemption price with respect to the
Notes called for redemption in accordance with Section 3.3 and the purchase
price with respect to Notes tendered for purchase in accordance with Section
3.6) issued hereunder shall, to the extent and in the manner hereinafter set
forth, be subordinated and subject in right of payment to the prior payment in
full in cash or other payment satisfactory to holders of Senior Indebtedness of
all Senior Indebtedness.
No provision of this Article IV shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 4.2 PAYMENTS TO NOTEHOLDERS. No payment shall be made with
respect to the principal of, or premium, if any, or interest on the Notes
(including, but not limited to, the redemption price with respect to the Notes
called for redemption in accordance with Section 3.3 and the purchase price with
respect to Notes tendered for purchase in accordance with Section
26
3.6), except payments and distributions made by the Trustee as permitted by the
first or second paragraph of Section 4.5, if:
(a) a default in the payment of principal, premium, if any,
interest, or other obligations due on any Senior Indebtedness occurs and is
continuing (or, in the case of Senior Indebtedness for which there is a period
of grace, in the event of such a default that continues beyond the period of
grace, if any, specified in the instrument or lease evidencing such Senior
Indebtedness), unless and until such default shall have been cured or waived or
shall have ceased to exist; or
(b) a default, other than a payment default, on a Senior
Indebtedness occurs and is continuing that then permits holders of such Senior
Indebtedness to accelerate its maturity and the Trustee receives a notice of the
default (a "Payment Blockage Notice") from the Company or holder or
Representative of Senior Indebtedness.
If the Trustee receives any Payment Blockage Notice pursuant to clause
(b) above, no subsequent Payment Blockage Notice shall be effective for purposes
of this Section unless and until (A) at least 365 days shall have elapsed since
the effectiveness of the immediately prior Payment Blockage Notice, and (B) all
scheduled payments of principal, premium, if any, and interest on the Notes that
have come due have been paid in full in cash. No nonpayment default that existed
or was continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
The Company may and shall resume payments on and distributions in
respect of the Notes upon the earlier of:
(1) the date upon which the default is cured or waived or
ceases to exist, or
(2) in the case of a default referred to in clause (b) above,
the earlier of (x) the date such default is cured or waived or ceases
to exist or (y) the date that is 179 days after a Payment Blockage
Notice is received if the maturity of such Senior Indebtedness has not
been accelerated, unless this Article IV otherwise prohibits the
payment or distribution at the time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or total or partial liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or to
become due upon all Senior Indebtedness shall first be paid in full, in cash or
other payment satisfactory to the holders of Senior Indebtedness or payment
thereof provided for in cash or other payment satisfactory to the holders of
Senior Indebtedness, before any payment is made on account of the principal (and
premium, if any) or interest on the Notes (except payments made pursuant to
Article XIII from monies deposited with the Trustee pursuant thereto prior to
the happening of such dissolution, winding-up, liquidation or reorganization or
bankruptcy, insolvency, receivership or other such proceedings); and upon any
such dissolution or winding-up or liquidation or reorganization or bankruptcy,
insolvency, receivership or other such
27
proceedings, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Notes or the Trustee under this Indenture would be
entitled, except for the provision of this Article IV, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
or by the holders of the Notes or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders or as otherwise required by law or a court order) or their
respective Representative or Representatives, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full in cash
or other payment satisfactory to holders of Senior Indebtedness after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the holders of the
Notes or to the Trustee under this Indenture.
In the event of the acceleration of the Notes pursuant to Article VII,
no payment or distribution shall be made to the Trustee or any holder of Notes
in respect of the principal of, premium, if any, or interest on the Notes
(including, but not limited to, the redemption price with respect to the Notes
called for redemption in accordance with Section 3.3 and the purchase price with
respect to Notes tendered for purchase in accordance with Section 3.6), except
payments and distributions made by the Trustee as permitted by the first or
second paragraph of Section 4.5, until all Senior Indebtedness has been paid in
full in cash or other payment satisfactory to the holders of Senior Indebtedness
or such acceleration is rescinded in accordance with the terms of this
Indenture. If payment of the Notes is accelerated pursuant to Article VII, the
Company shall promptly notify holders of Senior Indebtedness of such
acceleration.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (including, without limitation, by way of set-off or
otherwise), prohibited by the foregoing, shall be received by the Trustee under
this Indenture or by any holders of the Notes before all Senior Indebtedness is
paid in full in cash or other payment satisfactory to holders of Senior
Indebtedness, or provision is made for in cash or other payment satisfactory to
holders of Senior Indebtedness, such payment or distribution shall be held by
the recipient or recipients in trust for the benefit of, and shall be
immediately paid over or delivered to, the holders of Senior Indebtedness or
their respective Representative or Representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash or other payment satisfactory to the holders of
Senior Indebtedness, after giving effect to any concurrent payment or
distribution (or provision therefor) to or for the holders of such Senior
Indebtedness.
For purposes of this Article IV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated (at least to the extent provided in this Article IV with respect
to the Notes) to the payment of all Senior Indebtedness which may at the time be
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outstanding; provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from such reorganization or adjustment, and (ii)
the rights of the holders of Senior Indebtedness (other than leases which are
not assumed by the Company or by the new corporation, as the case may be) are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article XII shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 4.2
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article XII.
Nothing in this Section 4.2 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.6. This Section 4.2 shall be subject
to the further provisions of Section 4.5.
SECTION 4.3 SUBROGATION OF NOTES. Subject to the payment in full of all
Senior Indebtedness, the rights of the holders of the Notes 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 IV (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 Notes are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal of (and premium, if
any) and interest on the Notes shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Notes or the Trustee would be entitled except for the provisions of this Article
IV, and no payment over pursuant to the provisions of this Article IV, to or for
the benefit of the holders of Senior Indebtedness by holders of the Notes or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Indebtedness, and the holders of the Notes, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness; and no payments or
distributions of cash, property or securities to or for the benefit of the
holders of the Notes pursuant to the subrogation provisions of this Article IV,
which would otherwise have been paid to the holders of Senior Indebtedness shall
be deemed to be a payment by the Company to or for the account of the Notes. It
is understood that the provisions of this Article IV are and are intended solely
for the purposes of defining the relative rights of the holders of the Notes, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of (and premium, if any) and interest on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Notes and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Note from exercising all remedies
29
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article IV of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article IV, the Trustee, subject to the provisions of Section 8.1, and
the holders of the Notes shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article IV.
SECTION 4.4 AUTHORIZATION BY NOTEHOLDERS. Each holder of a Note by his,
her or its acceptance thereof authorizes and directs the Trustee on his, her or
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article IV and appoints the Trustee his, her
or its attorney-in-fact for any and all such purposes.
SECTION 4.5 NOTICE TO TRUSTEE. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Notes pursuant to the provisions of this Article IV.
Notwithstanding the provisions of this Article IV or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any Senior Indebtedness or of any default or event of default with respect to
any Senior Indebtedness or of any other facts which would prohibit the making of
any payment of monies to or by the Trustee in respect of the Notes pursuant to
the provisions of this Article IV, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof at the Corporate Trust Office
from the Company (in the form of an Officers' Certificate) or a holder or
holders or Representative of Senior Indebtedness who shall have been certified
by the Company or otherwise established to the reasonable satisfaction of the
Trustee to be such holder or Representative; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 8.1, shall be
entitled in all respects to assume that no such facts exist; provided that if on
a date at least two (2) Business Days prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest on
any Note), the Trustee shall not have received with respect to such monies the
notice provided for in this Section 4.5, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date.
Notwithstanding anything to the contrary hereinbefore set forth,
nothing shall prevent (a) any payment by the Company or the Trustee to the
Noteholders of amounts in connection with (i)
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a redemption of Notes if notice of such redemption has been given to the holders
of Notes in compliance with Section 3.3 prior to the receipt by the Trustee of
written notice as aforesaid, or (ii) a purchase of Notes tendered for purchase
if the Change in Control Purchase Notice has been received in compliance with
Section 3.6 prior to the receipt by the Trustee of written notice as aforesaid;
or (b) any payment by the Trustee to the Noteholders of monies deposited with it
pursuant to Section 13.1.
The Trustee, subject to the provisions of Section 8.1, shall be
entitled to rely on the delivery to it of a written notice by a person
representing himself, herself or itself to be a holder of Senior Indebtedness
(or a Representative on behalf of such holder) to establish that such notice has
been given by a holder of Senior Indebtedness or a Representative on behalf of
any such holder or holders. 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 IV, 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 IV, 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 4.6 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee and
any agent of the Company or the Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article IV in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in Section 8.13 or elsewhere in this Indenture
shall deprive the Trustee or any such agent of any of its rights as such holder.
Nothing in this Article IV shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 8.6.
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 IV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Sections 4.2, 4.5 and 8.1, the Trustee shall not be liable to any
holder of Senior Indebtedness if it shall pay over or deliver to holders of
Notes, the Company or any other person money or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article IV or otherwise.
SECTION 4.7 NO IMPAIRMENT OF SUBORDINATION. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
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SECTION 4.8 CERTAIN CONVERSIONS NOT DEEMED PAYMENT. For the purposes of
this Article IV only, (1) the issuance and delivery of junior securities upon
(i) conversion of Notes in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on Notes or on account of the purchase or other acquisition
of Notes, and will therefor not be subject to the subordination provisions of
Article IV and (2) the payment, issuance or delivery of cash (except in
satisfaction of fractional shares pursuant to Section 15.3), property or
securities (other than junior securities) upon conversion of a Note shall be
deemed to constitute payment on account of the principal of such Note. For the
purposes of this Section, the term "junior securities" means (a) shares of any
stock of any class 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 Notes are so
subordinated as provided in this Article. Nothing contained in this Article or
elsewhere in this Indenture or in the Notes is intended to or shall impair, as
among the Company, its creditors other than holders of Senior Indebtedness and
the holders of the Notes, the right, which is absolute and unconditional, of the
holder of any Note to convert such Note in accordance with Article XV.
SECTION 4.9 ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article in addition to or in
place of the Trustee; provided, however, that the first paragraph of Section 4.5
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as paying agent.
SECTION 4.10 SENIOR INDEBTEDNESS ENTITLED TO RELY. The holders of
Senior Indebtedness shall have the right to rely upon this Article IV, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing thereto.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes.
SECTION 5.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in the Borough of Manhattan, The City of New York, New York, an office or agency
where the Notes may be surrendered for registration of transfer or exchange or
for presentation for payment or for conversion or redemption or purchase and
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not
32
designated or appointed by the Trustee. 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, or the office or agency of
the Trustee or an Affiliate of the Trustee, in the Borough of Manhattan, The
City of New York, New York.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, New York, for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent. The Corporate Trust Office and
the office or agency of the Trustee in the Borough of Manhattan, The City of New
York, New York (which shall initially be The Bank of New York Trust Company,
N.A. located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000) shall be considered as
one such office or agency of the Company for each of the aforesaid purposes.
So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11.
SECTION 5.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 5.4 PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the
Trustee, the Company will cause such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section 5.4:
(1) that it will hold all sums held by it as such
agent for the payment of the principal of and premium, if any,
or interest on the Notes (whether such sums have been paid to
it by the Company or by any other obligor on the Notes) in
trust for the benefit of the holders of the Notes;
(2) that it will give the Trustee written notice of
any failure by the Company (or by any other obligor on the
Notes) to make any payment of the principal of and premium, if
any, or interest on the Notes when the same shall be due and
payable; and
(3) that at any time during the continuance of an
Event of Default, upon request of the Trustee, it will
forthwith pay to the Trustee all sums so held in trust.
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The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a sum
(in funds which are immediately available) sufficient to pay such principal,
premium, if any, or interest, and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee in writing of any failure to take such
action, provided that if such deposit is made on the due date, such deposit must
be received by the paying agent by 10:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will,
on or before each due date of the principal of, premium, if any, or interest on
the Notes, set aside, segregate and hold in trust for the benefit of the holders
of the Notes a sum sufficient to pay such principal, premium, if any, or
interest so becoming due and will notify the Trustee in writing of any failure
to take such action and of any failure by the Company (or any other obligor
under the Notes) to make any payment of the principal of, premium, if any, or
interest on the Notes when the same shall become due and payable.
(c) Anything in this Section 5.4 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the Company or any
paying agent hereunder as required by this Section 5.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying agent
shall be released from all further liability with respect to such sums.
(d) Anything in this Section 5.4 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
5.4 is subject to Sections 13.3 and 13.4.
SECTION 5.5 EXISTENCE. Subject to Article XII, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence.
SECTION 5.6 RESTRICTION AS TO DIVIDENDS. The Company covenants and
agrees that so long as any Note is outstanding, no dividend (other than
dividends or distributions paid in shares of, or options, warrants or rights to
subscribe for or purchase shares of, Common Stock) shall be declared or paid or
set apart for payment, and no other distribution shall be declared or made or
set apart for payment, in each case upon the Common Stock, nor shall any Common
Stock be redeemed, purchased or otherwise acquired for any consideration (or any
monies be paid to or made available for a sinking fund or otherwise for the
purchase or redemption of any shares of Common Stock), by the Company or any
Subsidiary (except (A) by conversion into or exchange for Common Stock; or (B)
repurchases of unvested shares of Common Stock at cost upon termination of the
employment or consultancy of the holder thereof, provided such repurchases are
approved by the Board of Directors in good faith) unless such dividend,
distribution, redemption, purchase or acquisition is not declared, paid or made,
or funds or other assets therefor set aside or made available for payment or
distribution (whether by way of a sinking fund or otherwise), until December 31,
2007.
34
SECTION 5.7 STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest on the Notes as contemplated herein, wherever enacted, now
or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law has been enacted.
SECTION 5.8 COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year in which the Exchange Date falls), 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.
The Company will deliver to the Trustee, forthwith upon becoming aware
of any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such default or Event of Default and
further stating what action the Company has taken, is taking or proposes to take
with respect thereto.
Any notice required to be given under this Section 5.8 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 5.9 FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 6.1 NOTEHOLDERS' LISTS. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, quarterly, not more
than fifteen (15) days after the _________ day of _________, _________,
_________ and _________ of each year beginning with the _________ day of
_________, _________, _________ or _________, immediately after the Exchange
Date, and at such other times as the Trustee may request in writing, within
thirty (30) days after receipt by the Company of any such request (or such
lesser time as the Trustee may reasonably request in order to enable it to
timely provide any notice to be provided by it hereunder), a list in such form
as the Trustee may reasonably require of the names and addresses of the holders
of Notes as of a date not more than fifteen (15) days (or such other date as the
35
Trustee may reasonably request in order to so provide any such notices) prior to
the time such information is furnished, except that no such list need be
furnished so long as the Trustee is acting as Note registrar.
SECTION 6.2 PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Notes contained in the most recent list furnished to it as provided
in Section 6.1 or maintained by the Trustee in its capacity as Note registrar,
if so acting. The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders
of Notes with respect to their rights under this Indenture or under the Notes
and the corresponding rights and duties of the Trustee, shall be as provided by
the Trust Indenture Act.
(c) Every Noteholder, 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 of Notes made
pursuant to the Trust Indenture Act.
SECTION 6.3 REPORTS BY TRUSTEE.
(a) Within 60 days after May 1 of each year commencing with
the year in which the Exchange Date falls, the Trustee shall transmit to holders
of Notes such reports dated as of May 1 of the year in which such reports are
made concerning the Trustee and its actions under this Indenture as may be
required pursuant to Section 313 of the Trust Indenture Act at the times and in
the manner provided pursuant thereto. In the event that no events have occurred
under the applicable sections of the Trust Indenture Act, the Trustee shall be
under no duty or obligation to provide such reports.
(b) A copy of such report shall, at the time of such
transmission to holders of Notes, be filed by the Trustee with each stock
exchange or automated quotation system upon which the Notes are listed, with the
Commission and with the Company. The Company will notify the Trustee when the
Notes are listed on any stock exchange or automated quotation system and when
any such listing is discontinued.
SECTION 6.4 REPORTS BY COMPANY.
(a) The Company (and any obligor upon the Notes) shall file
with the Trustee and the Commission, and transmit to holders of Notes, 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 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.
36
(b) The Company will deliver to the Trustee (a) as soon as
available and in any event within ninety (90) days after the end of each fiscal
year of the Company (i) a consolidated balance sheet of the Company and its
subsidiaries as of the end of such fiscal year and the related consolidated
statements of operations, stockholders' equity and cash flows for such fiscal
year, all reported on by an independent public accountant of nationally
recognized standing and (ii) a report containing a management's discussion and
analysis of the financial condition and results of operations and a description
of the business and properties of the Company and (b) as soon as available and
in any event within forty-five (45) days after the end of each of the first
three quarters of each fiscal year of the Company an unaudited consolidated
management's discussion and analysis of the financial condition and results of
operations of the Company for such quarter; provided that the foregoing
statements and reports shall not be required for any fiscal year or quarter, as
the case may be, with respect to which the Company files or expects to file with
the Trustee an annual report or quarterly report, as the case may be, pursuant
to Section 6.4(a). The Trustee shall have no liability as regards the substance
of the information provided by the Company or its agents pursuant to this
Section 6.4.
ARTICLE VII
DEFAULTS AND REMEDIES
SECTION 7.1 EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of the principal of and premium, if
any, on any of the Notes as and when the same shall become due and payable
either at maturity or in connection with any redemption or purchase, by
declaration or otherwise, whether or not such payment is prohibited by the
provisions of Article IV; or
(b) default in the payment of any installment of interest,
upon any of the Notes as and when the same shall become due and payable, and
continuance of such default for a period of thirty (30) days, whether or not
such payment is prohibited by the provisions of Article IV; or
(c) default in the Company's obligation to deliver shares of
Common Stock, together with cash in lieu of any fractional shares, when due upon
conversion of Notes as provided in Article XV, and continuance of such default
for a period of ten (10) Business Days; or
(d) failure on the part of the Company to provide timely
notice of a Change in Control as provided in Section 3.6(b); or
(e) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the Company in
the Notes or in this Indenture (other than
37
a covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with) continued for a period of
forty-five (45) days after the date on which written notice of such failure,
requiring the Company to remedy the same, shall have been given to the Company
by the Trustee, or to the Company and a Responsible Officer of the Trustee by
the holders of at least 25% in aggregate principal amount of the outstanding
Notes at the time outstanding determined in accordance with Section 9.4; or
(f) failure by the Company, or any current or future
Subsidiary, to make any payment at maturity, including any applicable grace
period, in respect of Indebtedness, in an amount in excess of $5,000,000 or the
equivalent thereof in any other currency or composite currency and such failure
shall have continued for a period of thirty (30) days after written notice
thereof shall have been given to the Company by the Trustee, or to the Company
and a Responsible Officer of the Trustee by the holders of at least 25% in
aggregate principal amount of the outstanding Notes at the time outstanding
determined in accordance with Section 9.4; or
(g) a default by the Company, or any current or future
Subsidiary, with respect to any Indebtedness which default results in the
acceleration of Indebtedness in an amount in excess of $5,000,000 or the
equivalent thereof in any other currency or composite currency without such
Indebtedness having been discharged or such acceleration having been cured,
waived, rescinded or annulled for a period of thirty (30) days after written
notice thereof shall have been given to the Company by the Trustee or to the
Company and a Responsible Officer of the Trustee by the holders of at least 25%
in aggregate principal amount of the outstanding Notes at the time outstanding
determined in accordance with Section 9.4; or
(h) the Company or any current or future Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(i) an involuntary case or other proceeding shall be commenced
against the Company or any current or future Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of ninety (90) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.1(h) or (i)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes then outstanding hereunder
determined in accordance with Section 9.4, by notice in writing to the Company
(and to the Trustee if given by Noteholders), may declare the principal of and
premium, if any, on all the Notes and the interest accrued thereon to be due and
payable
38
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.1(h) or (i) occurs and is continuing, the principal of and premium, if
any, on all the Notes and the interest accrued thereon shall be immediately due
and payable. This provision, however, is subject to the conditions that if, at
any time after the principal of the Notes shall have been so declared due and
payable, and before any judgment or decree for the payment of the monies due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all Notes and the principal of and premium, if
any, on any and all Notes which shall have become due otherwise than by
acceleration (with interest on overdue installments of interest (to the extent
that payment of such interest is enforceable under applicable law) and on such
principal and premium, if any, at the rate borne by the Notes, to the date of
such payment or deposit) and amounts due to the Trustee pursuant to Section 8.6,
and if any and all defaults under this Indenture, other than the nonpayment of
principal of and premium, if any, and accrued interest on Notes which shall have
become due by acceleration, shall have been cured or waived pursuant to Section
7.7, then and in every such case the holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice to the Company
and to the Trustee, may waive all defaults or Events of Default and rescind and
annul such declaration and its consequences; but no such waiver or rescission
and annulment shall extend to or shall affect any subsequent default or Event of
Default, or shall impair any right consequent thereon. The Company shall notify
the Responsible Officer of the Trustee, promptly upon becoming aware thereof, of
any Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been instituted.
SECTION 7.2 PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR. The Company
covenants that (a) in case default shall be made in the payment by the Company
of any installment of interest upon any of the Notes as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or (b) in case default shall be made in the payment of the
principal of or premium, if any, on any of the Notes as and when the same shall
have become due and payable, whether at maturity of the Notes or in connection
with any redemption, purchase, by declaration under this Indenture or otherwise,
then, upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Notes, the whole amount that then shall have
become due and payable on all such Notes for principal and premium, if any, or
interest, or both, as the case may be, with interest upon the overdue principal
and premium, if any, and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest at
the rate borne by the Notes; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its
39
negligence or bad faith. Until such demand by the Trustee, the Company may pay
the principal of and premium, if any, and interest on the Notes to the
registered holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.6; and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders 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 Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including counsel fees incurred by it up to the date of such distribution. To
the extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, monies, securities and other property
which the holders of the Notes may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or adopt on behalf of any Noteholder any plan of
reorganization or arrangement affecting the Notes or the rights of any
Noteholder, or to authorize the Trustee to vote in respect of the claim of any
Noteholder in any such proceeding; provided, however, that the Trustee may, on
behalf of
40
the Noteholders, vote for the election of a trustee in bankruptcy or similar
official and may be a member of the creditor's committee established with
respect to such bankruptcy.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof on any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.
SECTION 7.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under Section 8.6;
Second: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall not have become due and be unpaid, to the payment
of interest on the Notes in default in the order of the maturity of the
installments of such interest, with interest (to the extent that such interest
has been collected by the Trustee) upon the overdue installments of interest at
the rate borne by the Notes, such payments to be made ratably to the persons
entitled thereto;
Third: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall have become due, by declaration or otherwise, and
be unpaid, to the payment of the whole amount then owing and unpaid upon the
Notes for principal and premium, if any, and interest, with interest on the
overdue principal and premium, if any, and (to the extent that such interest has
been collected by the Trustee) upon overdue installments of interest at the rate
borne by the Notes; and in case such monies shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Notes, then to the payment of such
principal and premium, if any, and interest without preference or priority of
principal and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the aggregate of such
principal and premium, if any, and accrued and unpaid interest; and
Fourth: Subject to the provisions of Article IV, to the payment of the
remainder, if any, to the Company or any other person lawfully entitled thereto.
SECTION 7.4 PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have
any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the
41
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for sixty (60) days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action, suit
or proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 7.7; it being understood and
intended that no one or more holders of Notes shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other holders of Notes, or to
obtain or 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 of Notes.
Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any, and interest on such Note, on or after the
respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in his, her or its own behalf and for
his, her or its own benefit, may enforce, and may institute and maintain any
proceeding suitable to enforce, his, her or its rights of conversion as provided
herein.
SECTION 7.5 PROCEEDINGS BY TRUSTEE. In case of an Event of Default, the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 7.6 REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
Section 2.6, all powers and remedies given by this Article VII to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or any acquiescence therein; and, subject to the provisions of Section
7.4, every power and remedy given by this Article VII or by law to the Trustee
or to the Noteholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Trustee or by the Noteholders.
42
SECTION 7.7 DIRECTION OF PROCEEDINGS AND XXXXXX OF DEFAULTS BY MAJORITY
OF NOTEHOLDERS. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.4 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 (a) such direction shall
not be in conflict with any rule of law or with this Indenture, and (b) the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. The holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 9.4 may on behalf of the holders of all of the Notes
waive any past default or Event of Default hereunder and its consequences except
(i) a default by the Company in the payment of interest or premium, if any, on,
or the principal of, the Notes, (ii) a failure by the Company to convert any
Notes into Common Stock or (iii) a default by the Company in respect of a
covenant or provision hereof which under Article XI cannot be modified or
amended without the consent of the holders of all Notes then outstanding
affected thereby. Upon any such waiver the Company, the Trustee and the holders
of the Notes shall be restored to their former positions and rights hereunder;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event of
Default hereunder shall have been waived as permitted by this Section 7.7, said
default or Event of Default shall for all purposes of the Notes and this
Indenture be deemed to have been cured and to be not continuing; but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 7.8 NOTICE OF DEFAULTS. The Trustee shall, within ninety (90)
days after the occurrence of a default, mail to all Noteholders, as the names
and addresses of such holders appear upon the Note register, notice of all
defaults known to a Responsible Officer, unless such defaults shall have been
cured or waived before the giving of such notice; and provided that, except in
the case of default in the payment of the principal of, or premium, if any
(either at maturity or in connection with any redemption or purchase, by
declaration or otherwise), or interest on any of the Notes, the Trustee shall be
protected in withholding such notice if and so long as a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the best interests of the Noteholders.
The Trustee shall not be charged with the knowledge of any default or
Event of Default with respect to the Notes, other than an Event of Default under
Section 7.1(a) or (b) unless either (1) a Responsible Officer shall have actual
knowledge of such default or Event of Default or (2) written notice of such
default or Event of Default making reference to this Indenture and to the Notes
shall have been given to the Trustee by the Company or any Noteholder.
SECTION 7.9 UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Note by his, her or its acceptance thereof shall
be deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section 7.9
43
shall not apply to any suit instituted by the Trustee, to any suit instituted by
any Noteholder, or group of Noteholders, holding in the aggregate more than 10%
in principal amount of the Notes at the time outstanding determined in
accordance with Section 9.4, or to any suit instituted by any Noteholder for the
enforcement of the payment of the principal of or premium, if any, or interest
on any Note (including, but not limited to, the redemption price with respect to
the Notes being redeemed or the purchase price with respect to the Notes being
purchased as provided in this Indenture) on or after the due date expressed in
such Note or to any suit for the enforcement of the right to convert any Note in
accordance with the provisions of Article XV.
SECTION 7.10 DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any holder of any Note 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 any acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the holders of Notes
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the holders of Notes, as the case may be.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture and 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 no implied covenants or obligations shall be read into
this Indenture and the Trust Indenture Act against the
Trustee; and
(2) 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 expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but, in the case of
44
any such 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 to the requirements
of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated
therein);
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee, unless
it shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(c) the Trustee shall not be liable to any Noteholder 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
principal amount of the Notes at the time outstanding determined as provided in
Section 9.4 relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture; and
(d) whether or not therein 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.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
SECTION 8.2 RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise
provided in Section 8.1:
(a) the Trustee may rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, Note, coupon or other paper or document believed
by it in good faith to be genuine and to have been signed or presented by the
proper party or parties;
(b) before the Trustee acts or refrains from acting, it may
request an Officers' Certificate or an Opinion of Counsel, or both;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the
45
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(e) 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,
Note, note 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; provided, however, that if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity from the Noteholders against such expenses or liability as
a condition to so proceeding; the reasonable expenses of every such examination
shall be paid by the Company or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Company upon demand; and
(f) 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 by it with due care
hereunder.
In no event shall the Trustee be liable for any consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.
SECTION 8.3 TRUSTEE'S DISCLAIMER. The recitals contained herein and in
the Notes (except in the Trustee's certificate of authentication) shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Notes. The Trustee shall not
be accountable for the use or application by the Company of any Notes or the
proceeds of any Notes authenticated and delivered by the Trustee in conformity
with the provisions of this Indenture.
SECTION 8.4 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY
OWN NOTES. The Trustee, any paying agent, any conversion agent or Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
SECTION 8.5 MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as may be
agreed from time to time by the Company and the Trustee.
46
SECTION 8.6 COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it hereunder
in any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or willful misconduct. The Company
also covenants to indemnify the Trustee in any capacity under this Indenture and
its agents and any authenticating agent for, and to hold them harmless against,
any loss, liability or expense incurred without negligence or willful misconduct
on the part of the Trustee or such agent or authenticating agent, as the case
may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses of defending themselves against any claim of liability in the
premises. The obligations of the Company under this Section 8.6 to compensate or
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the Notes
upon all property and funds held or collected by the Trustee as such, except
funds held in trust herewith for the benefit of the holders of particular Notes
prior to the date of the accrual of such unpaid compensation or indemnifiable
claim. The obligation of the Company under this Section shall survive the
satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.1(h) or (i) occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any bankruptcy,
insolvency or similar laws.
SECTION 8.7 OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 8.1 or Section 8.2, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence, willful misconduct,
recklessness and bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such Officers' Certificate, in the absence of negligence, willful
misconduct, recklessness and bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 8.8 CONFLICTING INTERESTS OF TRUSTEE.
(a) 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.
47
(b) In the event that the Trustee shall fail to comply with
Subsection (a) of this Section 8.8, the Trustee shall transmit notice of such
failure to the holders of Notes to the extent and in the manner provided by, and
subject to, the provisions of the Trust Indenture Act.
SECTION 8.9 ELIGIBILITY OF TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus (together
with its corporate parent) of at least $50,000,000 (or, if such person is a
member of a bank holding company system, the bank holding company shall have a
combined capital and surplus of at least $50,000,000). If such person publishes
reports of condition at least annually, pursuant to law or to the requirements
of any 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 8.10 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written
notice of such resignation to the Company and by mailing notice thereof to the
holders of Notes at their addresses as they shall appear on the Note register.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment thirty (30) days
after the mailing of such notice of resignation to the Noteholders, the
resigning Trustee may, at the expense of the Company, petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Noteholder who has been a bona fide holder of a Note or Notes for at least six
months may, subject to the provisions of Section 7.9, on behalf of himself,
herself or itself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section
8.8(a) after written request therefor by the Company or by any
Noteholder who has been a bona fide holder of a Note or Notes
for at least six months, or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.9 and shall fail
to resign after written request therefor by the Company or by
any such Noteholder, or
(3) the Trustee shall become incapable of acting, or
shall be adjudged bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be
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appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six months may, on behalf of himself, herself or
itself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so removed or
any Noteholder, upon the terms and conditions and otherwise as in Section
8.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 8.10
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.11.
SECTION 8.11 ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.6, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, each of the Company and the former trustee shall mail or
cause to be mailed notice of the
49
succession of such trustee hereunder to the holders of Notes at their addresses
as they shall appear on the Note register. If the Company fails to mail such
notice within ten (10) days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Company.
SECTION 8.12 SUCCESSION BY MERGER, ETC. Any corporation or other entity
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or other
entity succeeding to all or substantially all of the corporate trust business of
the Trustee (including the trust created hereunder), shall be the successor to
the Trustee hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that in the case
of any corporation succeeding to all or substantially all of the trust business
of the Trustee such corporation shall be qualified under the provisions of
Section 8.8 and eligible under the provisions of Section 8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by such successor
trustee may authenticate such Notes either in the name of any predecessor
trustee hereunder or in the name of the successor trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 8.13 LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR. If and when
the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Notes and the Trust Indenture Act is applicable hereto), the Trustee
shall be subject to the provisions of Section 311(a) of the Trust Indenture Act
or, if applicable, Section 311(b) of the Trust Indenture Act regarding the
collection of the claims against the Company (or any such other obligor).
ARTICLE IX
CONCERNING THE NOTEHOLDERS
SECTION 9.1 ACTION BY NOTEHOLDERS. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article X, or
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(c) by a combination of such instrument or instruments and any such record of
such a meeting of Noteholders. Whenever the Company or the Trustee solicits the
taking of any action by the holders of the Notes, the Company or the Trustee may
fix in advance of such solicitation, a date as the record date for determining
holders entitled to take such action. The record date shall be not more than
fifteen (15) days prior to the date of commencement of solicitation of such
action.
SECTION 9.2 PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the
provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of any
instrument by a Noteholder or his, her or its agent or proxy shall be sufficient
if made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Notes shall be proved by the Note register or by a
certificate of the Note registrar. The record of any Noteholders' meeting shall
be proved in the manner provided in Section 10.6.
SECTION 9.3 WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee,
any paying agent, any conversion agent and any Note registrar may deem the
person in whose name such Note shall be registered upon the Note register to be,
and may treat him, her or it as, the absolute owner of such Note (whether or not
such Note shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account of
the principal of, premium, if any, and interest on such Note, for conversion of
such Note and for all other purposes; and neither the Company nor the Trustee
nor any paying agent nor any conversion agent nor any Note registrar shall be
affected by any notice to the contrary. All such payments so made to any holder
for the time being, or upon his, her or its order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.
SECTION 9.4 COMPANY-OWNED NOTES DISREGARDED. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or by any Affiliate
of the Company or any other obligor on the Notes shall be disregarded and deemed
not to be outstanding for the purpose of any such determination; provided that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent, waiver or other action only Notes which
a Responsible Officer of the Trustee knows are so owned shall be so disregarded.
Notes so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section 9.4 if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to vote such Notes and
that the pledgee is not the Company, any other obligor on the Notes or an
Affiliate of the Company or any such other obligor. In the case of a dispute as
to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. Upon request of the Trustee, the
Company shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Notes, if any, known by the Company to be owned or held by
or for the account of any of the above described persons; and, subject to
Section 8.1, the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that all
Notes not listed therein are outstanding for the purpose of any such
determination.
51
SECTION 9.5 REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.2, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE X
NOTEHOLDERS' MEETINGS
SECTION 10.1 PURPOSE OF MEETINGS. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article X for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to
give any directions to the Trustee permitted under this Indenture, or
to consent to the waiving of any default or Event of Default hereunder
and its consequences, or to take any other action authorized to be
taken by Noteholders pursuant to any of the provisions of Article VII;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VIII;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2;
(4) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of
the Notes under any other provision of this Indenture or under
applicable law; or
(5) to take any other action authorized by this Indenture or
under applicable law.
SECTION 10.2 CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place in the Borough of Manhattan, The City of
New York, New York, as the Trustee shall determine. Notice of every meeting of
the Noteholders, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting and the
establishment of any record date pursuant to Section 9.1, shall be mailed to
holders of Notes at their addresses as they shall appear on the Note register.
Such notice shall also be mailed to the
52
Company. Such notices shall be mailed not less than twenty (20) nor more than
ninety (90) days prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
SECTION 10.3 CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least 10% in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place for such meeting and
may call such meeting to take any action authorized in Section 10.1, by mailing
notice thereof as provided in Section 10.2.
SECTION 10.4 QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes. The only
persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 10.5 REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $50 principal
amount of Notes held or represented by him, her or it; provided, however, that
no vote shall be cast or counted at any meeting in respect of any Note
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Notes held by him, her or it or instruments in writing as aforesaid
duly designating him, her or it
53
as the proxy to vote on behalf of other Noteholders. Any meeting of Noteholders
duly called pursuant to the provisions of Section 10.2 or 10.3 may be adjourned
from time to time by the holders of a majority of the aggregate principal amount
of Notes represented at the meeting, whether or not constituting a quorum, and
the meeting may be held as so adjourned without further notice.
SECTION 10.6 VOTING. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 10.2. The record shall show the principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.7 NO DELAY OF RIGHTS BY MEETING. Nothing in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of
the holders of Notes pursuant to the requirements of Section 15.6;
(b) subject to Article IV, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Notes, any property or
assets;
54
(c) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article XII;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the Trustee
shall consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes
in coupon form (including Notes registrable as to principal only) and to provide
for exchange of such Notes with the Notes issued hereunder in fully registered
form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture which shall not materially adversely
affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualifications of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.
55
SECTION 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. With
the consent (evidenced as provided in Article IX) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding (determined in accordance with Section 9.4), the Company, when
authorized by the resolutions of the Board of Directors, and the Trustee may
from time to time and at any time 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 any
supplemental indenture or of modifying in any manner the rights of the holders
of the Notes; provided, however, that no such supplemental indenture shall, in
each case, without the consent of the holder of each Note so affected: (i)
extend the fixed maturity of any Note, or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount thereof or premium,
if any, thereon, or reduce any amount payable on redemption or purchase thereof,
or change the obligation of the Company to redeem any Note on a redemption date
in a manner adverse to the holders of Notes, or change the obligation of the
Company to purchase any Note upon the happening of a Change in Control in a
manner adverse to the holders of Notes, or impair or adversely affect the right
of any Noteholder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, or change or impair in a manner
adverse to the Noteholders the right to convert the Notes into Common Stock or
reduce the number of shares of Common Stock or any other property receivable by
a Noteholder upon conversion subject to the terms set forth herein, including
Section 15.6, or modify the provisions of this Indenture with respect to the
subordination of the Notes in a manner adverse to the Noteholders; or (ii)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any supplemental indenture, waiver or modification of any of the
provisions of this Section or Section 7.7.
Up to and prior to the close of business on the Exchange Date, only the
holders of shares of Preferred Stock shall be entitled to approve any amendments
or supplements to this Indenture as provided above. Any such vote of the holders
of shares of Preferred Stock shall require the affirmative vote or consent of
the holders of at least 66 2/3 percent (unless a higher percentage shall then be
required by applicable law) of all outstanding shares of Preferred Stock voting
separately as a class.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 11.3 EFFECT OF SUPPLEMENTAL INDENTURES. Any supplemental
indenture executed pursuant to the provisions of this Article XI shall comply
with the Trust Indenture Act, as then in
56
effect. Upon the execution of any supplemental indenture pursuant to the
provisions of this Article XI, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitation of rights, obligations, duties and immunities under this Indenture of
the Trustee, the Company and the holders of Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 11.4 NOTATION ON NOTES. Notes authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of this
Article XI may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may, at the Company's expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 16.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.
SECTION 11.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. The Trustee, subject to the provisions of Sections 8.1 and
8.2, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
ARTICLE XII
MERGER, SALE OR CONSOLIDATION
SECTION 12.1 LIMITATION ON MERGER, SALE OR CONSOLIDATION. The Company
shall not consolidate with or merge with or into another person or permit any
other person to consolidate with or merge with or into the Company, or sell,
lease, convey or transfer all or substantially all of its assets (computed on a
consolidated basis), whether in a single transaction or a series of related
transactions, to another person or group of affiliated persons, unless (i)
either (A) in the case of a consolidation or merger, the Company is the
surviving entity or (B) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Company in connection with the Notes and the Indenture;
(ii) no default or Event of Default shall exist or shall occur immediately after
giving effect on a pro forma basis to such transaction; and (iii) the Company
has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, sale, lease, conveyance or
transfer and, if a supplemental indenture is required, such supplemental
indenture comply with the Indenture and that all conditions precedent relating
to such transactions have been satisfied.
SECTION 12.2 SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and
57
interest on all of the Notes and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Company, such
successor corporation shall succeed to and be substituted for the Company, with
the same effect as if it had been named herein as the party of the first part.
Such successor corporation thereupon may cause to be signed, and may issue
either in its own name or in the name of International Shipholding Corporation
any or all of the Notes issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver, or cause to be authenticated and delivered, any
Notes which previously shall have been signed and delivered by the officers of
the Company to the Trustee for authentication, and any Notes which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Notes so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Notes had been issued at the date of the execution hereof. In the event
of any such consolidation, merger, sale or conveyance (but not in the event of
such lease), the person named as the "Company" in the first paragraph of this
Indenture, or any successor which shall thereafter have become such in the
manner prescribed in this Article XII and which shall have transferred its
rights and obligations hereunder to another successor in the manner prescribed
in this Article XII, may be dissolved, wound up and liquidated at any time
thereafter and such person shall be released from its liabilities as obligor and
maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.1 DISCHARGE OF INDENTURE. When (a) the Company shall deliver
to the Trustee for cancellation all Notes theretofore authenticated (other than
any Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall irrevocably
deposit with the Trustee, in trust, funds sufficient to pay at maturity or upon
redemption of all of the Notes (other than any Notes which shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for which
other Notes shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest due or to become due to such date of maturity or
redemption date, as the case may be, and if in either case the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect with respect to the
Notes (except
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as to (i) remaining rights of registration of transfer, substitution and
exchange and conversion of Notes and maintenance of an office therefor, (ii)
rights hereunder of Noteholders to receive payments of principal of and premium,
if any, and interest on, the Notes and the other rights, duties and obligations
of Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel as required by Section 16.5
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
SECTION 13.2 DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject
to Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1
shall be held in trust and applied by it to the payment, notwithstanding the
provisions of Article IV, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Trustee, of all sums due and to become due thereon for principal and
interest and premium, if any.
SECTION 13.3 PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon demand of the Company, be repaid to
it or paid to the Trustee, and thereupon such paying agent shall be released
from all further liability with respect to such monies.
SECTION 13.4 RETURN OF UNCLAIMED MONIES. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee or any paying
agent for payment of the principal of, premium, if any, or interest on Notes and
not applied but remaining unclaimed by the holders of Notes for two years after
the date upon which the principal of, premium, if any, or interest on such
Notes, as the case may be, shall have become due and payable, shall be returned
to the Company by the Trustee or any paying agent upon the Company's request and
all liability or responsibility of the Trustee or any paying agent shall
thereupon cease with respect to such monies; and the holder of any of the Notes
shall thereafter have the right to look only to the Company for any payment
which such holder may be entitled to collect unless an applicable abandoned
property law designates another person.
SECTION 13.5 REINSTATEMENT. If (i) the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.2 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application and (ii) the holders of at least a
majority in principal amount of the then outstanding Notes so request by written
notice to the Trustee, the Company's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 13.1 until such time as the Trustee or the paying agent is permitted
to apply all such money in accordance with Section 13.2; provided, however, that
if the Company makes any payment of interest on or principal of any Note
following the reinstatement of its obligations, the Company shall be
59
subrogated to the rights of the holders of such Notes to receive such payment
from the money held by the Trustee or paying agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.1 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of or premium, if any, or interest on
any Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
ARTICLE XV
CONVERSION OF NOTES
SECTION 15.1 HOLDER'S RIGHT TO CONVERT. Subject to and upon compliance
with the provisions of this Indenture, the holder of any Note shall have, at
his, her or its option, the right, at any time on or prior to the close of
business on the Maturity Date (except that, with respect to any Note or portion
of a Note which shall be called for redemption, such right shall terminate at
the close of business on the Business Day immediately preceding the date fixed
for redemption of such Note or portion of a Note unless the Company shall
default in payment of the amount due upon redemption thereof, in which case such
right shall terminate upon payment of the amount due upon such redemption) to
convert the principal amount of any such Note, or any portion of such principal
amount which is $50 or an integral multiple thereof, into that number of fully
paid and non-assessable shares of Common Stock (as such shares shall then be
constituted) obtained by dividing the principal amount of the Note or portion
thereof surrendered for conversion by the Conversion Price in effect at such
time, by surrender of the Note so to be converted in whole or in part in the
manner provided in Section 15.2. A holder of Notes is not entitled to any rights
of a holder of Common Stock until such holder has converted his, her or its
Notes to Common Stock, and only to the extent such Notes are deemed to have been
converted to Common Stock under this Article XV.
SECTION 15.2 EXERCISE OF CONVERSION RIGHT; ISSUANCE OF COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the
conversion right with respect to any Note held in certificated form, the holder
of any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at the office or agency maintained by the Company pursuant to
Section 5.2, accompanied by the funds, if any, required
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by the last paragraph of this Section 15.2, and shall give written notice of
conversion in substantially the form provided on the reverse of the form of Note
attached hereto as Exhibit A (or such other notice which is acceptable to the
Company) to such office or agency that the holder elects to convert such Note or
such portion thereof specified in such notice. Such notice shall also state the
name or names (with addresses) in which the certificate or certificates for
shares of Common Stock which shall be issuable on such conversion shall be
issued, and shall be accompanied by payment of any transfer taxes required
pursuant to Section 15.7. Each such Note surrendered for conversion shall,
unless the shares of Common Stock issuable on conversion are to be issued in the
same name in which such Notes are registered, be duly endorsed by, or be
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or his, her or its duly authorized attorney. In order to
exercise the conversion right with respect to any Notes represented by a Global
Note, the holder of the Note to be converted shall comply with the procedures
established by the Depositary for conversion.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, the Company shall issue and shall deliver to such
holder or, if shares issuable on conversion are to be issued in a name other
than that of the Noteholder (as if such transfer were a transfer of the Note or
Notes (or portion thereof) so converted), to such other person, at the office or
agency maintained by the Company for such purpose pursuant to Section 5.2, a
certificate or certificates representing the number of shares of Common Stock
issuable upon the conversion of such Note or portion thereof in accordance with
the provisions of this Article XV and a check or cash in respect of any
fractional share of Common Stock arising upon such conversion, as provided in
Section 15.3 (which payment, if any, shall be paid no later than five Business
Days after satisfaction of the requirements for conversion set forth above). In
case any Note of a denomination greater than $50 shall be surrendered for
partial conversion, the Company shall, subject to Section 2.3, execute and the
Trustee shall authenticate and deliver to the holder of the Note so surrendered,
without charge to him, her or it, a new Note or Notes in an aggregate principal
amount equal to the unconverted portion of the surrendered Note.
Each conversion pursuant to Section 15.1 shall be deemed to have been
effected on the date on which the requirements set forth above in this Section
15.2 or the requirements of the Depositary, as the case may be, have been
satisfied as to such Note (or portion thereof), and the person in whose name any
certificate or certificates for shares of Common Stock issuable upon such
conversion shall be deemed to have become on said date the holder of record of
the shares represented thereby; provided, however, that if any such surrender
occurs on any date when the stock transfer books of the Company shall be closed,
the conversion shall be effected on the next succeeding day on which such stock
transfer books are open, and the person in whose name the certificates are to be
issued shall be the record holder thereof on such date for all purposes, but
such conversion shall be at the Conversion Price in effect on the date upon
which such Note shall be surrendered. Upon such conversion, the Company will be
deemed to have satisfied its obligation to pay in full the principal of,
premium, if any, and any accrued but unpaid interest with respect to such Note.
Upon the conversion of a Note represented by a Global Note, the
Trustee, or the Custodian at the direction of the Trustee, shall make a notation
on such Global Note as to the reduction in the principal amount represented
thereby.
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In the case of any Note or portion thereof which is converted after any
record date for an interest payment and prior to the close of business on the
Business Day immediately preceding the corresponding interest payment date, the
interest payment due on such payment date shall be payable on such interest
payment date to the holder of record of such Note or portion thereof as of such
record date notwithstanding such conversion; provided that any Note or portion
thereof surrendered for conversion during the period between the close of
business on the record date for an interest payment and prior to the close of
business on the Business Day immediately preceding the corresponding interest
payment date shall (unless such Note or portion thereof being converted shall
have been called for redemption and a notice of redemption has been sent to the
holders of the Notes pursuant to Section 3.3) be accompanied by payment of an
amount equal to the interest payable on such interest payment date on the
principal amount of Notes being converted; provided, however, that no such
payment need be made if there shall exist at the time of conversion a default in
the payment of interest on the Notes. The Trustee shall not be required to
accept for conversion any Notes not accompanied by any payment required by the
preceding sentence. Except as provided above in this Section 15.2, no payment or
adjustment shall be made for interest accrued on any Note surrendered for
conversion or on account of any dividends on any shares of Common Stock issued
upon the conversion of such Note.
SECTION 15.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If any fractional share of Common Stock otherwise
would be issuable upon the conversion of any Note or Notes, the Company shall
make a payment therefor in cash to the holder of such converted Notes based on
the then-current market value of a whole share of Common Stock. For purposes of
this Section 15.3, the then-current market value of a whole share of Common
Stock shall be the Closing Price of the Common Stock on the first Trading Day
immediately preceding the day on which the Notes (or specified portions thereof)
are deemed to have been converted and such Closing Price shall be determined as
provided in Section 15.5(h)(1). If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered for conversion.
SECTION 15.4 CONVERSION PRICE. The conversion price shall be as
specified in the form of Note (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article XV.
SECTION 15.5 ADJUSTMENT OF CONVERSION PRICE. The Conversion Price shall
be adjusted from time to time by the Company as follows:
(a) In the event the Company shall hereafter pay a dividend in
shares of Common Stock or make a distribution to all holders of Common Stock in
shares of Common Stock, the Conversion Price in effect at the opening of
business on the Business Day following the Record Date fixed for the
determination of stockholders 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
62
on such Record Date and the denominator shall be the sum of such number of
shares of Common Stock and the total number of shares of Common Stock
constituting such dividend or other distribution. If any dividend or
distribution of the type described in this Section 15.5(a) is declared but not
so paid or made, the Conversion Price shall again be adjusted to the Conversion
Price which would have been in effect if such dividend or distribution had not
been declared.
(b) In the event the Company shall issue rights or warrants to
all holders of its outstanding shares of Common Stock entitling them (for a
period expiring within forty-five (45) days after the Record Date fixed for the
determination of stockholders entitled to receive such rights or warrants) to
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price on the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the Conversion Price shall equal the price determined
by multiplying the Conversion Price in effect at the opening of business on the
date after such Record Date by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
Record Date plus the number of shares which the aggregate subscription, purchase
or exercise price of the shares of Common Stock called for by all such issued
rights or warrants would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding at the
close of business on the Record Date plus the total number of additional shares
of Common Stock so offered for subscription or purchase. Such adjustment shall
become effective at the opening of business on the Business Day following the
Record Date fixed for determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of Common Stock are not delivered
pursuant to such rights or warrants, upon the expiration or termination of such
rights or warrants the Conversion Price shall be readjusted to the Conversion
Price which would have been in effect had the adjustments made upon the issuance
of such rights or warrants been made on the basis of only the number of shares
of Common Stock actually delivered. In the event that such rights or warrants
are not so issued, the Conversion Price shall again be adjusted to be the
Conversion Price which would have been in effect if the Record Date fixed for
the determination of stockholders entitled to receive such rights or warrants
had not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than the
Current Market Price, and in determining the aggregate subscription, purchase or
exercise price of such shares of Common Stock, there shall be taken into account
any consideration received for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of Directors in
its sole discretion.
(c) In the event the 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 Business Day following the day
upon which such subdivision becomes effective shall be proportionately reduced,
and conversely, in the event the 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 Business Day following the day upon
which such combination becomes effective shall be proportionately increased.
(d) In the event the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company (other than any
63
dividends or distributions to which Section 15.5(a) applies) or evidences of its
indebtedness, cash or other assets (including securities, but excluding (1) any
rights or warrants referred to in Section 15.5(b) or (2) dividends and
distributions paid exclusively in cash (such shares of capital stock, evidences
of indebtedness, cash or other assets hereinafter in this Section 15.5(d)
referred to as the "Securities")), then, in each such case, the Conversion Price
shall be reduced so that the Conversion Price shall be equal to the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the Record Date with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price (determined as
provided in Section 15.5(h)(2)) on such Record 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 Record Date of the
portion of the Securities so distributed applicable to one share of Common Stock
and the denominator shall be such Current Market Price, such reduction to become
effective at the opening of business on the day following such Record Date;
provided, however, that in the event the then fair market value (as so
determined by the Board of Directors) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall have
the right to receive upon conversion of a Note (or any portion thereof) the
amount of Securities such holder would have received had such holder converted
such Note (or portion thereof) immediately prior to such Record Date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would have been
in effect if such dividend or distribution had not been declared. If the Board
of Directors determines the fair market value of any distribution for purposes
of this Section 15.5(d) by reference to the trading market for any securities
comprising all or part of such distribution, it must in doing so consider the
prices in such market over the same period (the "Reference Period") used in
computing the Current Market Price pursuant to Section 15.5(h)(2) to the extent
possible, unless the Board of Directors in a Board Resolution determines in good
faith that determining the fair market value during the Reference Period would
not be in the best interest of the Noteholders.
For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that also
includes shares of Common Stock to which Section 15.5(a) applies, or rights or
warrants to subscribe for or purchase shares of Common Stock to which Section
15.5(b) applies (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, assets, shares of capital stock,
rights or warrants other than such shares of Common Stock to which 15.5(a)
applies or rights or warrants to which Section 15.5(b) applies (and any
Conversion Price reduction required by this Section 15.5(d) with respect to such
dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
15.5(a) and (b) with respect to such dividend or distribution shall then be
made, except (A) the Record Date of such dividend or distribution shall be
substituted as "the Record Date fixed for the determination of stockholders
entitled to receive such dividend or other distribution" and "Record Date"
within the meaning of Section 15.5(a) and as "the Record Date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"Record Date" within the meaning of Section 15.5(b) and (B) any shares of Common
Stock included in such dividend or distribution shall not be deemed
64
"outstanding at the close of business on such Record Date" within the meaning of
Section 15.5(a).
In the event that the Company implements a stockholders' rights plan (a
"New Rights Plan") or amends any existing stockholders' rights plan (as amended,
an "Amended Rights Plan" and together with any New Rights Plan, a "Rights
Plan"), such Rights Plan shall provide that upon conversion of the Notes the
holders will receive, in addition to the Common Stock issuable upon such
conversion, the rights under such Rights Plan (notwithstanding the occurrence of
an event causing such rights to separate from the Common Stock at or prior to
the time of conversion), unless prior to conversion of the Preferred Stock the
rights have expired, terminated or been redeemed. Any distribution of rights or
warrants pursuant to a Rights Plan complying with the requirements set forth in
the immediately preceding sentence of this paragraph shall not constitute a
distribution of rights or warrants for purposes of this Section 15.5(d). Rights
or warrants distributed by the Company to all holders of Common Stock entitling
the holders thereof to subscribe for or purchase shares of the Company's capital
stock (either initially or under certain circumstances), which rights or
warrants, until the occurrence of a specified event or events ("Trigger Event"),
(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, shall be deemed not to have been distributed for purposes of this Section
15.5(d) (and no adjustment to the Conversion Price under this Section 15.5(d)
will be required) until the occurrence of the earliest Trigger Event. If such
right or warrant is subject to subsequent events, upon the occurrence of which
such right or warrant shall become exercisable to purchase different securities,
evidences of indebtedness or other assets or entitle the holder to purchase a
different number or amount of the foregoing or to purchase any of the foregoing
at a different purchase price, then the occurrence of each such event shall be
deemed, for the purposes of this Section 15.5(d), to be the date of issuance and
record date with respect to a new right or warrant (and a termination or
expiration of the existing right or warrant without exercise by the holder
thereof). In addition, in the event of any distribution (or deemed distribution)
of rights or warrants, or the occurrence of any Trigger Event or other event (of
the type described in the preceding sentence) with respect thereto, that
resulted in an adjustment to the Conversion Price under this Section 15.5(d),
(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 of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights 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 all of which shall have expired or been
terminated without exercise, the Conversion Price shall be readjusted as if such
rights and warrants had never been issued.
(e) In the event the Company shall, by dividend or otherwise,
make a distribution to holders of its Common Stock consisting exclusively of
cash (excluding any dividend or distribution made in connection with a merger or
consolidation to which Section 15.6 applies or as part of a distribution
referred to in Section 15.5(d)), in an amount that when combined with all other
distributions of cash to holders of its Common Stock (excluding any dividend or
distribution made in connection with a merger or consolidation to which Section
7(e) applies or
65
as part of a distribution referred to in Section 7(d)(iv)) in such calendar year
exceeds on a per-share basis the greater of $0.50 per share or three percent
(3%) of the Current Market Price on the date prior to the date of the
declaration of such distribution, then, immediately after the close of business
on the Record Date with respect to such distribution, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on such
Record Date by a fraction (i) the numerator of which shall be equal to the
Current Market Price on the Record Date less an amount equal to the quotient of
(x) the aggregate amount of such distribution and (y) the number of shares of
Common Stock outstanding on the Record Date and (ii) the denominator of which
shall be equal to the Current Market Price on such Record Date. In the event
that such dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would have been in
effect if such dividend or distribution had not been declared.
(f) In the event a tender offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender offer (as amended upon the expiration thereof) shall require the payment
to stockholders of consideration (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as defined
below)) per share of Common Stock having a fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) that, as of the date upon which occurred the last time
tenders could have been made pursuant to such tender offer (the "Expiration
Time"), exceeds the Closing Price of a share of Common Stock on the Trading Day
next succeeding the Expiration Time then, immediately prior to the opening of
business on the day after the Expiration Time, the Conversion Price shall be
reduced so that the Conversion Price shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on the date of the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time multiplied by the Current Market
Price on the Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender offer) of all
shares validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares) at the Expiration Time and the Current Market Price
on the Trading Day next succeeding the Expiration Time, such reduction (if any)
to become effective at the opening of business on the Business Day following the
Expiration Time. In the event that the Company is obligated to purchase shares
pursuant to any such tender offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the Conversion
Price which would have been in effect if such tender offer had not been made. If
the application of this Section 15.5(f) to any tender offer would result in an
increase in the Conversion Price, no adjustment shall be made for such tender
offer under this Section 15.5(f).
66
(g) In the event of a tender or exchange offer made by a
person other than the Company or any Subsidiary for an amount of Common Stock
which increases the offeror's ownership of Common Stock to more than 25% of the
Common Stock outstanding and shall involve the payment by such person of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive,
and described in a Board Resolution) at the last time (the "Tender Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as amended) that exceeds the Current Market Price on the Trading Day next
succeeding the Tender Expiration Time, and with respect to which, as of the
Tender Expiration Time, the Board of Directors is not recommending rejection of
the offer, the Conversion Price shall be reduced so that the Conversion Price
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Tender Expiration Time by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) as of the Tender Expiration Time multiplied by
the Current Market Price on the Trading Day next succeeding the Tender
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Tender Expiration Time (the shares deemed so accepted,
up to any such maximum, being referred to as the "Tender Purchased Shares") and
(y) the product of the number of shares of Common Stock outstanding (less any
Tender Purchased Shares) on the Tender Expiration Time and the Current Market
Price on the Trading Day next succeeding the Tender Expiration Time, such
reduction to become effective at the opening of business on the Business Day
following the Tender Expiration Time. In the event that such person is obligated
to purchase shares pursuant to any such tender or exchange offer, but such
person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would have been in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 15.5(g) shall not be made if, as of the
Tender Expiration Time, the offering documents with respect to such tender offer
or exchange offer disclose a plan or intention to cause the Company to engage in
any transaction described in Article XII.
(h) For purposes of this Section 15.5 and the other provisions
of this Indenture, the following terms shall have the meaning indicated:
(1) "Closing Price" with respect to any securities on
any day shall mean the closing sale price regular way on such
day or, in case no sale of such securities takes place on such
day, the average of the reported closing bid and asked prices,
regular way, in each case on the Nasdaq National Market or New
York Stock Exchange, as applicable, or, if such security is
not listed or admitted to trading on such Nasdaq National
Market or New York Stock Exchange, on the principal national
securities exchange, trading market or quotation system on
which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on
any national securities exchange, trading market or quotation
system, the average of the closing bid and asked prices of
such security on the over-the-counter market on such day as
reported by the National Quotation
67
Bureau Incorporated, or a similar generally accepted reporting
service, or if not so available, in such manner as furnished
by any New York Stock Exchange member firm selected from time
to time by the Board of Directors for that purpose, or a price
determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution.
(2) "Current Market Price" shall mean, subject to the
second paragraph hereof, the lesser of (a) the Closing Price
per share of Common Stock on the date in question and (b) the
average of the daily Closing Prices per share of Common Stock
for the ten (10) consecutive Trading Days immediately prior to
the date in question; provided, however, that (1) if the "ex"
date (as hereinafter defined) for any event (other than the
issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to
Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs during
such ten (10) consecutive Trading Days, 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, (2) 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 Section 15.5(a), (b), (c), (d),
(e), (f) or (g) occurs on or after the "ex" date for the
issuance or distribution requiring such computation and prior
to the day 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 (3) if the
"ex" date for the issuance or distribution requiring such
computation is prior to the day in question, after taking into
account any adjustment required pursuant to clause (1) or (2)
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 (as determined by
the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 15.5(d),
(f) or (g), 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 purposes of any computation under Section 15.5(f) or (g), the
Current Market Price on any date shall be deemed to be the average of the daily
Closing Prices per share of Common Stock for such day and the next two
succeeding Trading Days; 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 Section 15.5(a), (b), (c), (d),
(e), (f) or (g) occurs on or after the Expiration Time or the Tender Expiration
Time, as the case may be, for the tender or exchange offer requiring such
computation and prior to the day 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.
For purposes of this paragraph, the
68
term "ex" date, (1) 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 Price was
obtained without the right to receive such issuance or distribution, (2) 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 (3) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades regular way
on such exchange or in such market after the Expiration Time or Tender
Expiration Time, as the case may be, of such offer. Notwithstanding the
foregoing, whenever successive adjustments to the Conversion Price are called
for pursuant to this Section 15.5, such adjustments shall be made to the Current
Market Price as may be necessary or appropriate to effectuate the intent of this
Section 15.5 and to avoid unjust or inequitable results as determined in good
faith by the Board of Directors.
(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length
transaction.
(4) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which
the holders of Common Stock have the right to receive any
cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other
property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable
security is quoted on the Nasdaq National Market, a day on
which trades may be made thereon or (y) if the applicable
security is listed or admitted for trading on the New York
Stock Exchange or another national securities exchange or
securities trading market, a day on which the New York Stock
Exchange or such other national securities exchange or
securities trading market is open for business or (z) if the
applicable security is not so listed, admitted for trading or
quoted, any day other than a Saturday or Sunday or a day on
which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(i) The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 15.5(a), (b), (c), (d), (e),
(f) and (g), as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes. To the extent permitted by applicable law, the
Company from time to time may reduce the Conversion Price by any amount for any
period of time if the period is at least twenty (20) Business Days, the
reduction is irrevocable during the period and the Board of Directors shall have
made a determination that such reduction is in the best interests of the
Company, which determination shall be conclusive and described in a Board
Resolution. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to the holder of each Note, at his, her or its
last address appearing on the Note register
69
provided for in Section 2.5, a notice of the reduction at least fifteen (15)
days prior to the date the reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and the period during which it
will be in effect.
(j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
Section 15.5(j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
XV shall be made by the Company and shall be rounded to the nearest cent. No
adjustment need be made for a change in the par value or no par value of the
Common Stock or a change from par value to no par value or from no par value to
par value.
(k) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee and any conversion
agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Unless and until a Responsible Officer of
the Trustee shall have received such Officers' Certificate, the Trustee shall
not be deemed to have knowledge of any adjustment of the Conversion Price and
may assume without inquiry that the last Conversion Price of which it has
knowledge remains in effect. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the date on which such
adjustment becomes or became effective and shall mail such notice of such
adjustment of the Conversion Price to the holder of each Note, at his, her or
its last address appearing on the Note register provided for in Section 2.5,
within twenty (20) days of the effective date of such adjustment. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(l) In any case in which this Section 15.5 provides that an
adjustment shall become effective immediately after a Record Date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
holder of any Note converted after such Record Date and before the occurrence of
such event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the Common
Stock issuable upon conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any fractional shares of
Common Stock pursuant to Section 15.3.
(m) For purposes of this Section 15.5, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company, unless a dividend or distribution that requires an
adjustment to the Conversion Price pursuant to this Section 15.5 is paid or made
with respect to such treasury shares, but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock.
SECTION 15.6 RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If any of
the following events occur, namely (i) any reclassification or change of the
outstanding shares of Common Stock (other than a subdivision or combination to
which Section 15.5(c) applies or a change in par value), (ii) any consolidation,
merger or combination of the Company with another person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
70
other property or assets (including cash) with respect to or in exchange for
such Common Stock, or (iii) any sale or conveyance of all or substantially all
of the assets of the Company to any other person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company, its successor or purchasing person, as the case
may be, shall execute with the Trustee a supplemental indenture (which shall
comply with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) providing that each Note shall be convertible into the
kind and amount of shares of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance by a holder of the number of shares of
Common Stock issuable upon conversion of such Notes (assuming, for such
purposes, a sufficient number of authorized shares of Common Stock are available
to convert all such Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Stock did not exercise his rights of election, if any, as to the kind or
amount of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance (provided that, if the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purposes of this Section 15.6 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
XV.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section 15.6 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 15.6 applies to any event or occurrence, Section 15.5
shall not apply. The Company shall not be a party to any event or occurrence to
which this Section 15.6 applies unless the terms of such event or occurrence are
consistent with this Section 15.6.
SECTION 15.7 TAXES ON SHARES ISSUED. The issuance of stock certificates
representing the shares of Common Stock issuable upon conversion of the Notes
shall be made without charge to the holders of such shares for any issuance tax
in respect thereof imposed by the government of the United States or any
political subdivision thereof or other cost incurred by the Company in
connection with such conversion and/or the issuance of such shares. 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 Common Stock in any name
other than the name in which the Note with
71
respect to which such shares of Common Stock are issued is registered, and the
Company shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
SECTION 15.8 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; LISTING OF
COMMON STOCK. The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares of Common Stock or shares of Common Stock held in
treasury, or both, sufficient shares of Common Stock to provide for the
conversion of the Notes from time to time as such Notes are presented for
conversion, and no Note shall be issued unless such sufficient number of shares
of Common Stock has been reserved and is available for issuance upon conversion
of Notes under this Article XV.
The Company covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, a sufficient number of shares of Common Stock for the
purpose of effecting conversions of the Notes not theretofore converted into
Common Stock. For purposes of this reservation of Common Stock, the number of
shares of Common Stock which shall be deliverable upon the conversion of all
outstanding Notes shall be computed as if at the time of computation all
outstanding Notes were held by a single holder. The issuance of shares of Common
Stock upon conversion of the Notes is duly authorized in all respects.
The Company shall from time to time, in accordance with the laws of the
State of Delaware, use its best efforts to increase the authorized number of
shares of Common Stock if at any time the number of shares of authorized and
unissued Common Stock shall not be sufficient to permit the conversion of all of
the then outstanding Notes.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock issued upon
conversion of Notes will, upon such issuance, be fully paid and non-assessable
shares of the capital stock of the Company, free from all taxes, liens and
charges. The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any Federal or state law before
such shares may be validly issued upon conversion, the Company will, in good
faith and as expeditiously as possible, endeavor to secure such registration or
approval, as the case may be.
The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market, the New York Stock Exchange or
any other national securities exchange or automated quotation system, the
Company will, if permitted by the rules of such exchange or automated quotation
system, list and keep listed, so long as the Common Stock shall
72
be so listed on such exchange or automated quotation system, all Common Stock
issuable upon conversion of the Notes.
SECTION 15.9 RESPONSIBILITY OF TRUSTEE. Except as otherwise expressly
provided for in this Article XV, the Company is solely responsible for
performing the duties and responsibilities contained in this Article XV. The
Trustee and any other conversion agent shall not at any time be under any duty
or responsibility to any holder of Notes to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or employed herein or in any supplemental
indenture, in making the same. The Trustee and any other conversion agent shall
not be accountable with respect to the validity or value (or the kind or amount)
of any shares of Common Stock, or of any securities or property, which may at
any time be issued or delivered upon the conversion of any Note; and the Trustee
and any other conversion agent make no representations with respect thereto.
Subject to the provisions of Section 8.1, neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion or
to comply with any of the duties, responsibilities or covenants of the Company
contained in this Article XV. Without limiting the generality of the foregoing,
neither the Trustee nor any conversion agent shall be under any responsibility
to determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 15.6 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
an Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
SECTION 15.10 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In the event:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any share of
any class of the Company's capital stock or any other rights or warrants; or
(c) of any reclassification of the Common Stock (other than a
subdivision or combination of its outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value), 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 assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
73
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes, at his, her or its address appearing on the Note register
provided for in Section 2.5 of this Indenture, as promptly as possible but in
any event at least fifteen (15) days prior to the applicable 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 rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective or occur, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.1 PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements of the Company in this
Indenture contained shall bind its successors and assigns whether so expressed
or not.
SECTION 16.2 OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 16.3 ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes if given or served by any
standard form of telecommunication (until another address is filed by the
Company with the Trustee). Notices shall be directed to 000 Xxxxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxx 00000 Attention: Chief Financial Officer, or to an agent of
the Company designated as permitted by this Indenture. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by any standard
form of telecommunication. Notices shall be directed to the Corporate Trust
Office, which office is, at the date as of which this Indenture is dated,
located at 00000 Xxxxxxxxx Xxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000,
Attention: Corporate Trust Department (International Shipholding Corporation
_____% Convertible Subordinated Notes Due 2014).
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
74
Any notice or communication mailed to a Noteholder shall be mailed to
him, her or it by first class mail, postage prepaid, at his, her or its address
as it appears on the Note register and shall be sufficiently given to him, her
or it if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 16.4 GOVERNING LAW. This Indenture and each Note shall be
deemed to be a contract made under the laws of New York, and for all purposes
shall be construed in accordance with the laws of New York, without regard to
the conflict of laws provisions thereof.
SECTION 16.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture,
including those actions set forth in Section 314(c) of the Trust Indenture Act,
the Company shall furnish to the Trustee an Officers' Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for by or on behalf of the Company
in this Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained in
such certificate or opinion is based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him, her or it 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
or not, in the opinion of such person, such condition or covenant has been
complied with.
SECTION 16.6 LEGAL HOLIDAYS. In any case where the date of maturity of
interest on or principal of the Notes or the date fixed for redemption of any
Note or the Change in Control Purchase Date will not be a Business Day, then
payment of such interest on or principal of the Notes 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 date of maturity, the date fixed for redemption or
the Change in Control Purchase Date, and no interest shall accrue for the period
from and after such date.
SECTION 16.7 NO SECURITY INTEREST CREATED. Nothing in this Indenture or
in the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction.
75
SECTION 16.8 TRUST INDENTURE ACT. If any provision hereof limits,
qualifies or conflicts with a provision of the Trust Indenture Act that is
required under the Trust Indenture Act to be a part of and govern this
Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be. Until such
time as this Indenture shall be qualified under the Trust Indenture Act, this
Indenture, the Company and the Trustee shall be deemed for all purposes hereof
to be subject to and governed by the Trust Indenture Act to the same extent as
would be the case if this Indenture were so qualified on the date hereof.
SECTION 16.9 BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any person, other than the parties
hereto, any paying agent, any conversion agent, any authenticating agent, any
Note registrar and their successors hereunder, the holders of Notes and the
holders of Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 16.10 TABLE OF CONTENTS, HEADINGS, ETC. The table of contents
and the titles and headings of the articles and sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 16.11 AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.6, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a person
eligible to serve as trustee hereunder pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case
76
at any time any authenticating agent shall cease to be eligible under this
Section, the Trustee shall promptly appoint a successor authenticating agent
(which may be the Trustee), shall give written notice of such appointment to the
Company and shall mail notice of such appointment to all holders of Notes as the
names and addresses of such holders appear on the Note register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11
shall be applicable to any authenticating agent.
SECTION 16.12 EXECUTION IN COUNTERPARTS. This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
The Bank of New York hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed all as of the date first written above.
INTERNATIONAL SHIPHOLDING CORPORATION
By:
-------------------------------------------
Title:
----------------------------------------
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------------
Title: Agent
78
EXHIBIT A - FORM OF NOTE
[FORM OF FACE OF NOTE]
No.
------------------
$
-------------------
INTERNATIONAL SHIPHOLDING CORPORATION
CUSIP: [ ]
% Convertible Subordinated Note Due 2014
---------------------
International Shipholding Corporation, a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay
to________________, or registered assigns, the principal sum of ________________
Dollars on________________, 2014 and to pay interest on said principal sum
quarterly on the _________ day of _________, _________, _________ and _________
of each year, commencing on the first such date after the Exchange Date (as
defined in the Indenture), at the rate per annum specified in the title of this
Note, accrued from the _________ day of _________, _________, _________ or
_________, as the case may be, next preceding the date of this Note to which
interest has been paid or duly provided for, unless the date of this Note is a
date to which interest has been paid or duly provided for, in which case
interest shall accrue from the date of this Note, or unless no interest has been
paid or duly provided for on this Note, in which case interest shall accrue from
the Exchange Date, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after the
_________ day of _________, _________, _________ or _________ of any year, as
the case may be, and before the following _________ day of _________, _________,
_________ or _________, of any year, as the case may be, this Note shall bear
interest from such _________ day of _________, _________, _________ or
_________, respectively; provided, however, that if the Company shall default in
the payment of interest due on the _________ day of _________, _________,
_________ or _________, then this Note shall bear interest from the next
preceding _________ day of _________, _________, _________ or _________ to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for on this Note, from the Exchange Date. The interest so payable
on the _________ day of _________, _________, _________ and _________ of any
year will be paid to the person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the record date,
which shall be the _________ day of _________, _________, _________ or _________
(whether or not a Business Day) next preceding the _________ day of _________,
_________, _________ and _________, respectively, as provided in the Indenture;
provided that any such interest not punctually paid or duly provided for shall
be payable as provided in the Indenture. Payment of the principal of and
interest accrued on this Note shall be made at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, New York, which shall initially be the office of the Trustee or its
affiliate, or, at the option of the
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holder of this Note, at the Corporate Trust Office, in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts; provided, however, that at the option
of the Company, payment of interest may be made by check mailed to the
registered address of the person entitled thereto; provided further that, with
respect to any holder of Notes with an aggregate principal amount equal to or in
excess of $2,000,000, at the request of such holder in writing to the Company,
interest on such holder's Notes shall be paid by wire transfer in immediately
available funds in accordance with the wire transfer instruction supplied by
such holder to the Trustee and paying agent (if different from Trustee).
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on this Note to the
prior payment as and when due of all Senior Indebtedness as defined in the
Indenture and provisions giving the holder of this Note the right to convert
this Note into Common Stock of the Company on the terms and subject to the
limitations referred to on the reverse hereof and as more fully specified in the
Indenture. Such further provisions shall for all purposes have the same effect
as though fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
INTERNATIONAL SHIPHOLDING
CORPORATION
Dated By:
----------------------- -----------------------------------------
Title
Attest:
--------------------------------------------
Secretary
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[FORM OF CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
THE BANK OF NEW YORK TRUST COMPANY,
N.A.
as Trustee
By:
------------------------------------------
Authorized Signatory
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[FORM OF REVERSE OF NOTE]
INTERNATIONAL SHIPHOLDING CORPORATION
________________% Convertible Subordinated Note Due 2014
This Note is one of a duly authorized issue of Notes of the Company,
designated as its ________________% Convertible Subordinated Notes Due 2014
(herein called the "Notes"), limited to the aggregate principal amount of
$________________, all issued or to be issued under and pursuant to an
Indenture, dated as of ________________, 2004 (herein called the "Indenture"),
between the Company and The Bank of New York (herein called the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the Notes.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and accrued interest on all Notes
may be declared, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority of the
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; provided, however, that no such supplemental
indenture shall, in each case, without the consent of the holder of each Note so
affected: (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
or purchase thereof, or change the obligation of the Company to redeem any Note
on a redemption date in a manner adverse to the holders of Notes, or change the
obligation of the Company to purchase any Note upon the happening of a Change in
Control in a manner adverse to the holders of Notes, or impair or adversely
affect the right of any Noteholder to institute suit for the payment thereof, or
make the principal thereof or interest or premium, if any, thereon payable in
any coin or currency other than that provided in the Notes, or change or impair
in a manner adverse to the Noteholders the right to convert the Notes into
Common Stock or reduce the number of shares of Common Stock or any other
property receivable by a Noteholder upon conversion subject to the terms set
forth in the Indenture, including Section 15.6, or modify the provisions of the
Indenture with respect to the subordination of the Notes in a manner adverse to
the Noteholders; or (ii) reduce the aforesaid percentage of Notes, the holders
of which are required to consent to any supplemental indenture, waiver or
modification of any of the provisions of Section 7.7 or Section 11.2 of the
Indenture. It is also provided in the Indenture that, prior to any declaration
accelerating the maturity of the Notes, the holders of not less than a majority
in aggregate principal amount of the Notes at the time outstanding may on behalf
of the holders of all of the Notes waive any past default or Event of Default
under the Indenture and its consequences except (i) a default by the Company in
the payment of interest or premium, if any,
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on, or the principal of, any of the Notes, (ii) a failure by the Company to
convert any Notes into Common Stock of the Company or (iii) a default by the
Company in respect of a covenant or provision in the Indenture which cannot be
modified or waived without the consent of the holders of all Notes then
outstanding affected thereby. Any such consent or waiver by the holder of this
Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this Note and
any Notes which may be issued in exchange or substitution hereof, irrespective
of whether or not any notation thereof is made upon this Note or such other
Notes.
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
as defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on his, her or its behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee his, her or its attorney in fact for such purpose.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the place, at the respective times, at the rate and in the coin
or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $50 principal amount and integral multiples thereof equal to
the number of shares of Preferred Stock for which the Notes are exchanged. At
the office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge, Notes may be exchanged for a like aggregate principal
amount of Notes of other authorized denominations.
Prior to __________ _____, 2006, the Notes may not be redeemed by the
Company except in connection with a Change in Control. At any time on or after
__________ _____, 2006 and prior to maturity, the Company, at its option, may
redeem the Notes, in whole or in part, at any time or from time to time, upon
mailing a notice of such redemption not less than thirty (30) nor more than
sixty (60) days before the date fixed for redemption to the holders of Notes at
their last registered addresses, all as provided in the Indenture, during the
periods shown below, for cash at the following redemption prices plus an amount
equal to accrued and unpaid interest, if any, to (but excluding) the date fixed
for redemption; provided that if the date fixed for redemption falls after an
interest payment record date and on or prior to the corresponding interest
payment date, then holders of the Notes at the close of business on that
interest payment record date shall be entitled to receive the interest payable
on such Notes on the corresponding interest payment date and the amount payable
to holders of such Notes on the date fixed for redemption will not include any
amount in respect of interest payable on such corresponding
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interest payment date; and provided further that, prior to __________ __, 2007,
Notes may not be redeemed by the Company except in connection with a Change in
Control unless the Closing Price of Common Stock (or, if more than one class of
Common Stock is then issued and outstanding, all classes of Common Stock) has
exceeded 150% of the Conversion Price for at least 20 Trading Days during any
period of 30 consecutive Trading Days ending within five Trading Days prior to
the notice of redemption.
REDEMPTION
YEAR PRICE
------------------- -------------------------
Beginning on , 2006 and ending on , 2007 $
Beginning on , 2007 and ending on , 2008
Beginning on , 2008 and thereafter
The Notes are not subject to redemption or retirement through the
operation of any sinking fund.
The Company may not give notice of any redemption of the Notes if a
default in the payment of interest, or premium, if any, on the Notes has
occurred and is continuing or if any other Event of Default of which a
Responsible Officer of the Trustee has knowledge has occurred and is continuing.
If a Change in Control occurs at any time prior to maturity of the
Notes, the Notes may be redeemed at the option of the Company, in whole but not
in part, not later than sixty (60) Business Days following the effective date of
the event or circumstance resulting in the Change in Control, upon mailing a
notice of such redemption at least thirty (30) and not more than sixty (60) days
prior to the date fixed for redemption to holders of the Notes as provided in
the Indenture for cash at the following redemption prices together with accrued
and unpaid interest to, but excluding, the date fixed for redemption; provided
that if the date fixed for redemption falls after an interest payment record
date and on or prior to the corresponding interest payment date, then holders of
the Notes at the close of business on that interest payment record date shall be
entitled to receive the interest payable on such Notes on the corresponding
interest payment date and the amount payable to holders of such Notes on the
redemption date will not include any amount in respect of interest payable on
such corresponding interest payment date:
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IF THE
CHANGE IN CONTROL
OCCURS WITHIN THE
TWELVE MONTHS REDEMPTION
PRECEDING [ ], PRICE
------------------- ---------------
2005 $
2006
2007
2008
2009
If a Change in Control occurs at any time prior to maturity of the
Notes, and the Company shall not have exercised its right to redeem all of the
Notes, the holder of this Note, at the holder's option, shall have the right,
upon delivery of a Change in Control Purchase Notice in accordance with the
provisions of the Indenture, to require the Company to purchase this Note (or
any portion of the principal amount hereof that is at least $50 and an integral
multiple of $50, provided that the portion of the principal amount of this Note
to be outstanding after such purchase is at least equal to $50) for cash at a
purchase price equal to 100% of the aggregate principal amount thereof, together
with accrued and unpaid interest to (but excluding) the Change in Control
Purchase Date, as provided in Section 3.6(a) of the Indenture; provided that if
the Change in Control Purchase Date falls after an interest payment record date
and on or prior to the corresponding interest payment date, then holders of the
Notes at the close of business on that interest payment record date shall be
entitled to receive the interest payable on such Notes on the corresponding
interest payment date and the amount payable to holders of such Notes on the
Change in Control Purchase Date will not include any amount in respect of
interest payable on such corresponding interest payment date. Any holder of this
Note delivering to the Trustee the Change in Control Purchase Notice shall have
the right to withdraw such Change in Control Purchase Notice in whole, or as to
a portion hereof that is an integral multiple of $50, at any time prior to the
close of business on the Business Day before the Change in Control Purchase Date
(unless the Company shall default in the payment of the purchase price, together
with accrued and unpaid interest to (but excluding) the Change in Control
Purchase Date, in which case, such withdrawal shall be permitted until the
Company pays the purchase price, together with accrued and unpaid interest to
(but excluding) the date of such payment) by delivery of a written notice of
withdrawal to the Trustee in accordance with the provisions of the Indenture.
Subject to the provisions of the Indenture, the holder hereof has, at
its option, the right, at any time or on or prior to the close of business on
the Maturity Date (or as to all or any portion hereof called for redemption,
prior to the close of business on the Business Day immediately preceding the
date fixed for redemption (unless the Company shall default in payment of the
amount due upon redemption in which case such right shall terminate upon payment
of the amount due upon such redemption)), to convert the principal hereof or any
portion of such principal which is $50 or an integral multiple thereof, into
that number of fully paid and non-assessable shares of the Company's Common
Stock, as said shares shall be constituted at the date of conversion, obtained
by dividing the principal amount of this Note or portion thereof to be
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converted by the conversion price of $________._______, as adjusted from time to
time pursuant to Article XV of the Indenture, upon surrender of this Note,
together with a conversion notice as provided in the Indenture and this Note, to
the Company at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York, New York, or at the option of
such holder, the Corporate Trust Office, and, unless the shares issuable on
conversion are to be issued in the same name as this Note, duly endorsed by, or
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or by his, her or its duly authorized attorney. If a
Change in Control Purchase Notice has been given by the holder of this Note,
this Note may not be converted into shares of Common Stock on or after the date
of the delivery of such Change in Control Purchase Notice unless such Change in
Control Purchase Notice has first been validly withdrawn as specified in Section
3.6 of the Indenture. No adjustment in respect of interest accrued on any Note
or on account of any dividends on any shares of Common Stock will be made upon
any conversion; provided, however, that if this Note shall be surrendered for
conversion during the period between the close of business on a record date for
the payment of interest and prior to the close of business on the Business Day
immediately preceding the corresponding interest payment date, this Note (unless
it or the portion being converted shall have been called for redemption and a
notice of redemption has been mailed to the holders of the Notes pursuant to
Section 3.3 of the Indenture) must be accompanied by an amount, in funds
acceptable to the Company, equal to the interest otherwise payable on such
interest payment date on the principal amount being converted. No fractional
shares of Common Stock will be issued upon any conversion, but an adjustment in
cash will be paid to the holder, as provided in the Indenture, in respect of any
fractional share which would otherwise be issuable upon the surrender of any
Note or Notes for conversion.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, New York, which shall initially be an Affiliate of the Trustee, or at the
option of the holder of this Note, at the Corporate Trust Office, a new Note or
Notes of authorized denominations for an equal aggregate principal amount will
be issued to the transferee in exchange thereof, subject to the limitations
provided in the Indenture, without charge, and bearing any restrictive legends
required by the Indenture.
The Company, the Trustee, any paying agent, any conversion agent and
any Note registrar may deem and treat the registered holder hereof as the
absolute owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment hereof, or on account hereof, for the conversion
hereof and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any other conversion agent nor any Note registrar shall be
affected by any notice to the contrary. All payments made to or upon the order
of such registered holder shall, to the extent of the sum or sums paid, satisfy
and discharge liability for monies payable on this Note.
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, employee, agent, officer, director
or
A-8
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
Terms used in this Note and defined in the Indenture are used herein as
therein defined.
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ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
(Cust) (Minor)
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
(State)
Additional abbreviations may also be used
though not in the above list.
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[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To
-------------------
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is $50
principal amount or an integral multiple thereof) below designated, into shares
of Common Stock in accordance with the terms of the Indenture referred to in
this Note, and directs that the shares issuable and deliverable upon such
conversion and any check in payment for fractional shares and any Notes
representing any unconverted principal amount hereof, be issued and delivered to
the registered holder hereof unless a different name has been indicated below.
If shares or any portion of this Note 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. Any amount required to be paid to the
undersigned on account of interest accompanies this Note.
Dated:
-------------------
---------------------------------------------
---------------------------------------------
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with membership
in an approved signature guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17AD-15 if shares of Common Stock are to be issued, or
Notes to be delivered, other than to and in the name of the registered holder.
Signature Guarantee
Fill in for registration of shares if to be issued, and Notes if to be
delivered, other than to and in the name of the registered holder:
------------------------------
(Name)
------------------------------
(Street Address)
------------------------------
(City, State and Zip Code)
Please print name and address
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Principal amount to be converted (if less than all):
$_________,000
---------------------------------------------------
Social Security or Other Taxpayer Identification
Number
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[FORM OF ASSIGNMENT]
For value received ________________ hereby sell(s), assign(s) and
transfer(s) unto ________________ (Please insert social security number or
Taxpayer Identification Number of assignee) the Note, and hereby irrevocably
constitutes and appoints ________________ attorney to transfer the said Note on
the books of the Company, with full power of substitution in the premises.
Unless the appropriate box below is checked, the undersigned confirms
that such Note is not being transferred to the Company or an "affiliate" of the
Company as defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate").
[ ] The transferee is an Affiliate of the Company
[ ] The transferee is the Company
Dated:
-------------------
---------------------------------------------
---------------------------------------------
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with membership
in an approved signature guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17AD-15 if shares of Common Stock are to be issued, or
Notes are to be delivered, other than to and in the name of the registered
holder.
Signature Guarantee
NOTICE: The signature on the conversion notice or the assignment must
correspond with the name as written upon the face of the Note in every
particular without alteration or enlargement or any change whatever.
[FORM OF CHANGE IN CONTROL PURCHASE NOTICE]
CHANGE IN CONTROL PURCHASE NOTICE
To: _____________________________
The undersigned registered owner of this Note hereby
irrevocably acknowledges receipt of a notice from International Shipholding
Corporation, a Delaware corporation (the "COMPANY"), as to the occurrence of a
Change in Control with respect to the Company and
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requests and instructs the Company to purchase this Note, or the portion hereof
(which is $50 principal amount or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Note, at a purchase price per share equal to one hundred percent (100%) of the
principal amount, or portion designated below, of this Note, together with
accrued and unpaid interest, if any, to, but excluding, the Change in Control
Purchase Date. The certificate number(s) of such Note(s) is/are ____________
(include if the Notes are certificated).
Capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Indenture.
Dated:
--------------------
---------------------------------------------
---------------------------------------------
Signature(s)
NOTICE: The above signatures of the holder(s) hereof must correspond
with the name as written upon the face of the Note in every particular without
alteration or enlargement or any change whatever.
Aggregate principal amount to be purchased
(if less than all):
$
------------------------------------------
-------------------------------------------
Social Security or Other Taxpayer
Identification Number
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