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EXHIBIT 4.2
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EXCEL LEGACY CORPORATION, as Issuer
$_________
9.0% Convertible Redeemable Subordinated Secured Debentures
due _________, 2004
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INDENTURE
Dated as of __________, 1999
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Norwest Bank Minnesota, National Association, as Trustee
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TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
Section 1.01. Definitions......................................................................................1
Section 1.02. Other Definitions................................................................................3
Section 1.03. Incorporation by Reference of Trust Indenture Act................................................3
Section 1.04. Rules of Construction............................................................................4
ARTICLE 2. THE SECURITIES.........................................................................................4
Section 2.01. Form and Dating..................................................................................4
Section 2.02. Execution and Authentication.....................................................................5
Section 2.03. Registrar, Paying Agent and Conversion Agent.....................................................5
Section 2.04. Paying Agent to Hold Money in Trust..............................................................5
Section 2.05. Securityholder Lists.............................................................................6
Section 2.06. Transfer and Exchange............................................................................6
Section 2.07. Replacement Securities...........................................................................6
Section 2.08. Outstanding Securities...........................................................................7
Section 2.09. Treasury Securities..............................................................................7
Section 2.10. Temporary Securities.............................................................................7
Section 2.11. Cancellation.....................................................................................7
Section 2.12. Defaulted Interest...............................................................................8
ARTICLE 3. REDEMPTION.............................................................................................8
Section 3.01. Notices to Trustee...............................................................................8
Section 3.02. Selection of Securities to be Redeemed...........................................................8
Section 3.03. Notice of Redemption.............................................................................8
Section 3.04. Effect of Notice of Redemption...................................................................9
Section 3.05. Deposit of Redemption Price......................................................................9
Section 3.06. Securities Redeemed in Part.....................................................................10
ARTICLE 4. COVENANTS.............................................................................................10
Section 4.01. Payment of Securities...........................................................................10
Section 4.02. SEC Reports.....................................................................................10
Section 4.03. Compliance Certificate..........................................................................10
Section 4.04. Stay, Extension and Usury Laws..................................................................11
Section 4.05. Continued Existence.............................................................................11
Section 4.06. Taxes...........................................................................................11
ARTICLE 5. SUCCESSORS............................................................................................11
Section 5.01. When Company May Merge, etc.....................................................................11
Section 5.02. Successor Corporation Substituted...............................................................12
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................12
Section 6.01. Events of Default...............................................................................12
Section 6.02. Acceleration....................................................................................14
Section 6.03. Other Remedies..................................................................................14
Section 6.04. Waiver of Past Defaults.........................................................................15
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Section 6.05. Control by Majority.............................................................................15
Section 6.06. Limitation on Suits.............................................................................15
Section 6.07. Rights of Holders to Receive Payment............................................................15
Section 6.08. Collection Suit by Trustee......................................................................16
Section 6.09. Trustee May File Proofs of Claim................................................................16
Section 6.10. Priorities......................................................................................16
Section 6.11. Undertaking for Costs...........................................................................17
ARTICLE 7. TRUSTEE...............................................................................................17
Section 7.01. Duties of Trustee...............................................................................17
Section 7.02. Rights of Trustee...............................................................................18
Section 7.03. Individual Rights of Trustee....................................................................18
Section 7.04. Trustee's Disclaimer............................................................................18
Section 7.05. Notice of Defaults..............................................................................19
Section 7.06. Reports by Trustee to Holders...................................................................19
Section 7.07. Compensation and Indemnity......................................................................19
Section 7.08. Replacement of Trustee..........................................................................19
Section 7.09. Successor Trustee by Merger, etc................................................................20
Section 7.10. Eligibility; Disqualification...................................................................21
Section 7.11. Preferential Collection of Claims Against Company...............................................21
Section 7.12. Sections Applicable to Registrar, Paying Agent and Conversion Agent.............................21
ARTICLE 8. DISCHARGE OF INDENTURE................................................................................21
Section 8.01. Termination of Company's Obligations............................................................21
Section 8.02. Application of Trust Money......................................................................23
Section 8.03. Repayment to Company............................................................................23
Section 8.04. Reinstatement...................................................................................23
ARTICLE 9. AMENDMENTS............................................................................................24
Section 9.01. Without Consent of Holders......................................................................24
Section 9.02. With Consent of Holders.........................................................................24
Section 9.03. Compliance with Trust Indenture Act.............................................................25
Section 9.04. Revocation and Effect of Consents...............................................................25
Section 9.05. Notation on or Exchange of Securities...........................................................26
Section 9.06. Trustee Protected...............................................................................26
ARTICLE 10. CONVERSION...........................................................................................26
Section 10.01. Conversion Privilege...........................................................................26
Section 10.02. Conversion Procedure...........................................................................27
Section 10.03. Fractional Shares..............................................................................27
Section 10.04. Taxes on Conversion............................................................................27
Section 10.05. Company to Provide Stock.......................................................................28
Section 10.06. Adjustment for Change in Capital Stock.........................................................28
Section 10.07. Adjustment for Rights Issue....................................................................29
Section 10.08. Adjustment for Other Distributions.............................................................29
Section 10.09. Adjustment for Common Stock Issue..............................................................30
Section 10.10. Adjustment for Convertible Securities Issue....................................................31
Section 10.11. Current Market Price...........................................................................32
Section 10.12. Consideration Received.........................................................................32
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Section 10.13. When Adjustment May Be Deferred................................................................32
Section 10.14. When No Adjustment Required....................................................................33
Section 10.15. Notice of Adjustment...........................................................................33
Section 10.16. Voluntary Reduction............................................................................33
Section 10.17. Notice of Certain Transactions.................................................................33
Section 10.18. Reorganization of Company......................................................................34
Section 10.19. Company Determination Final....................................................................34
Section 10.20. Trustee's Disclaimer...........................................................................34
ARTICLE 11. SUBORDINATION........................................................................................35
Section 11.01. Agreement to Subordinate.......................................................................35
Section 11.02. Certain Definitions............................................................................35
Section 11.03. Liquidation; Dissolution; Bankruptcy...........................................................35
Section 11.04. Default on Senior Debt.........................................................................36
Section 11.05. Acceleration of Securities.....................................................................36
Section 11.06. When Distribution Must Be Paid Over............................................................37
Section 11.07. Notice by Company..............................................................................37
Section 11.08. Subrogation....................................................................................37
Section 11.09. Relative Rights................................................................................37
Section 11.10. Subordination May Not Be Impaired by Company...................................................38
Section 11.11. Distribution or Notice to Representative.......................................................38
Section 11.12. Rights of Trustee and Paying Agent.............................................................38
ARTICLE 12. COLLATERAL AND SECURITY..............................................................................38
Section 12.01. Pledge Agreement...............................................................................38
Section 12.02. Recording and Opinions.........................................................................39
Section 12.03. Release of Collateral..........................................................................40
Section 12.04. Certificates of the Company....................................................................40
Section 12.05. Certificates of the Trustee....................................................................40
Section 12.06. Authorization of Actions to Be Taken by the Trustee Under the Pledge Agreement.................41
Section 12.07. Authorization of Receipt of Funds by the Trustee Under the Pledge Agreement....................41
Section 12.08. Termination of Security Interest...............................................................41
ARTICLE 13. MISCELLANEOUS........................................................................................41
Section 13.01. Trust Indenture Act Controls...................................................................41
Section 13.02. Notices........................................................................................41
Section 13.03. Communication by Holders with Other Holders....................................................42
Section 13.04. Certificate and Opinion as to Conditions Precedent.............................................42
Section 13.05. Statements Required in Certificate or Opinion..................................................42
Section 13.06. Rules by Trustee and Agents....................................................................43
Section 13.07. Legal Holidays.................................................................................43
Section 13.08. No Recourse Against Others.....................................................................43
Section 13.09. Counterparts...................................................................................43
Section 13.10. Variable Provisions............................................................................43
Section 13.11. Governing Law..................................................................................44
Section 13.12. No Adverse Interpretation of Other Agreements..................................................44
Section 13.13. Successors.....................................................................................44
Section 13.14. Severability...................................................................................44
Section 13.15. Table of Contents, Headings, Etc...............................................................44
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EXHIBITS
Exhibit A Form of Debenture
Exhibit B Form of Pledge Agreement
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
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310 (a) (1) ....................................................... 7.10
(a) (2) ....................................................... 7.10
(a) (3) ....................................................... N.A.
(a) (4) ....................................................... N.A.
(b) ....................................................... 7.08; 7.10; 13.02
(c) ....................................................... N.A.
311 (a) ....................................................... 7.11
X (b) ....................................................... 7.11
(c) ....................................................... N.A.
312 (a) ....................................................... 2.05
(b) ....................................................... 13.03
(c) ....................................................... 13.03
313 (a) ....................................................... 7.06
(b) (1) ....................................................... N.A.
(b) (2) ....................................................... 7.06
(c) ....................................................... 7.06; 13.02
(d) ....................................................... 7.06
314 (a) ....................................................... 4.02; 13.02
(b) ....................................................... N.A.
(c) (1) ....................................................... 13.04
(c) (2) ....................................................... 13.04
(c) (3) ....................................................... N.A.
(d) ....................................................... 12.03, 12.04, 12.05
(e) ....................................................... 13.05
(f) ....................................................... N.A.
315 (a) ....................................................... 7.01(b)
(b) ....................................................... 7.05; 13.02
(c) ....................................................... 7.01(a)
(d) ....................................................... 7.01(c)
(e) ....................................................... 6.11
316 (a)(last sentence) ....................................................... 2.09
(a) (1) (A) ....................................................... 6.05
(a) (1) (B) ....................................................... 6.04
(a) (2) ....................................................... N.A.
(b) ....................................................... 6.07
317 (a) (1) ....................................................... 6.08
(a) (2) ....................................................... 6.09
(b) ....................................................... 2.04
318 (a) ....................................................... 13.01
N.A. means not applicable.
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* This Cross-Reference Table is not part of the Indenture.
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INDENTURE, dated as of _________ __, 1999, between Excel Legacy
Corporation, a Delaware corporation ("Company"), and Norwest Bank Minnesota,
National Association ("Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 9.0% Convertible
Redeemable Subordinated Secured Debentures due _______, 2004 ("Securities"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"capital stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock.
"Collateral Agent" means the "Debentures Collateral Agent" as such term
is defined in the Pledge Agreement.
"Company" means the party named as such above until a successor
replaces it in accordance with Article 5 and thereafter means the successor.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder" means a person in whose name a Security is
registered.
"Indenture" means this Indenture as amended from time to time.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention
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agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).
"Material Subsidiary" means any subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 1-02(v) of Regulation S-X under the
Securities Act of 1933 and the Exchange Act, as amended, (as such Regulation is
in effect on the date hereof), and any other subsidiary of the Company which is
material to the business, earnings, prospects, assets or condition, financial or
otherwise, of the Company and its subsidiaries taken as a whole.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom must be the Chairman of the Board, the President, the Treasurer, a
Vice-President, the principal executive officer, the principal financial officer
and/or the principal accounting officer of the Company. See Sections 13.04 and
13.05
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 13.04 and 13.05.
"person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pledge Agreement" means the Pledge Agreement dated as of the date of
this Indenture and substantially in the form attached as Exhibit B hereto, as
such agreement may be amended, modified or supplemented from time to time.
"Pledged Collateral" means the "Debentures Pledged Collateral" as such
term is defined in the Pledge Agreement.
"principal" of a debt security means the principal of the security plus
the premium, if any, on the security.
"Quoted Price" of the Common Stock is the last reported sales price of
the Common Stock as reported by Nasdaq, National Market System, or if the Common
Stock is listed on a securities exchange, the last reported sales price of the
Common Stock on such exchange which shall be for consolidated trading if
applicable to such exchange or if neither so reported or listed, the last
reported bid price of the Common Stock.
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"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under this
Indenture in the form of Exhibit A hereto.
"subsidiary" of any specified person means (i) a corporation a majority
of whose capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly owned by such person or by such
person and a subsidiary or subsidiaries of such person or (ii) any other person
(other than a corporation) in which such person or such person and a subsidiary
or subsidiaries of such person or a subsidiary or subsidiaries of such person
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of execution of this Indenture.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
Section 1.02. Other Definitions.
Term Defined in Section
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"Bankruptcy Law".............................................................. 6.01
"Common Stock"................................................................ 10.01
"Conversion Agent"............................................................ 2.03
"Custodian.................................................................... 6.01
"Debt"........................................................................ 11.02
"Event of Default"............................................................ 6.01
"Legal Holiday"............................................................... 13.07
"Officer"..................................................................... 13.10
"Paying Agent"................................................................ 2.03
"Payment Default"............................................................. 6.01
"Registrar"................................................................... 2.03
"Representative".............................................................. 11.02
"Senior Debt"................................................................. 11.02
"U.S. Government Obligations"................................................. 8.01
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
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"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Securities means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles;
(3) references to "generally accepted accounting
principles" shall mean generally accepted accounting principles in
effect as of the time when and for the period as to which such
accounting principles are to be applied;
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in the
plural include the singular; and
(6) provisions apply to successive events and
transactions.
ARTICLE 2.
THE SECURITIES
Section 2.01. Form and Dating.
The Securities shall be substantially in the form of Exhibit A, which
is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication.
The terms and provisions contained in the Securities 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.
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Section 2.02. Execution and Authentication.
An Officer shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of the Securities upon a
written order of the Company signed by two Officers. The aggregate principal
amount of Securities outstanding at any time may not exceed that amount except
as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same right as an Agent to deal with the Company or
an Affiliate.
Section 2.03. Registrar, Paying Agent and Conversion Agent.
The Company shall maintain in the Borough of Manhattan, City of New
York, State of New York, and in such other locations as it shall determine (i)
an office or agency where securities may be presented for registration of
transfer or for exchange ("Registrar"), (ii) an office or agency where
Securities may be presented for payment ("Paying Agent"), and (iii) an office or
agency where Securities may be presented for conversion ("Conversion Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents. The term
"Paying Agent" includes any additional paying agent; the term "Conversion Agent"
includes any additional conversion agent. The Company may change any Paying
Agent, Registrar, Conversion Agent or co-registrar without prior notice. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar, Paying Agent or Conversion Agent, the Trustee shall act as
such. The Company or any of its subsidiaries may act as Conversion Agent, Paying
Agent, Registrar or co-registrar.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal or interest on the Securities, and will notify the Trustee
of any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The
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Company at any time may require a Paying Agent to pay all money held by it to
the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than
the Company or a subsidiary) shall have no further liability for the money. If
the Company or a subsidiary acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the Securityholders all money held by
it as Paying Agent.
Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee on or before each interest payment date and at such other times
as the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
Section 2.06. Transfer and Exchange.
Where Securities are presented to the Registrar or a co-registrar with
a request to register a transfer or to exchange them for an equal principal
amount of Securities of other denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transactions are met.
To permit registrations of transfers and exchanges, the Company shall issue and
the Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06, 9.05
or 10.02).
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of any selection of Securities for redemption under
Section 3.02 and ending at the close of business on the day of selection, or
(ii) to register the transfer or exchange of any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
Section 2.07. Replacement Securities.
If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder shall be required to provide
an indemnity bond sufficient in the judgment of both to protect the Company, the
Trustee, any Agent or any authenticating agent from any loss which any of them
may suffer if a Security is replaced. The Company may charge for its expenses in
replacing a Security.
Every replacement Security is an additional obligation of the Company
and shall be entitled to all the benefits provided under this Indenture equally
and proportionately with all other Securities duly issued hereunder.
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Section 2.08. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01, they cease to be
outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
Section 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or an Affiliate of the Company shall be considered as though they
are not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned shall be so disregarded.
Securities that the Company or any Affiliate of the Company offers to purchase
or acquire pursuant to an exchange offer, tender offer or otherwise shall not be
deemed to be owned by the Company or such Affiliate until legal title passes to
the Company or such Affiliate.
Section 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
As promptly as is reasonably practicable, the Company shall prepare and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities.
Section 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, Paying Agent and Conversion Agent shall forward to
the Trustee any Securities surrendered to them for registration of transfer,
exchange, payment or conversion. The Trustee shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement,
conversion or cancellation and shall dispose of canceled Securities in
accordance with its normal practices. The Company may not issue new Securities
to replace Securities that it has paid or that have been delivered to the
Trustee for cancellation or that any Securityholder has converted pursuant to
Article 10.
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Section 2.12. Defaulted Interest.
If the Company fails to make a payment of interest on the Securities,
it shall pay such defaulted interest plus any interest payable on the defaulted
interest in any lawful manner. It may pay such defaulted interest, plus any such
interest payable on it, to the persons who are Securityholders on a subsequent
special record date. The Company shall fix any such record date (which shall be
at least 5 and not more than 30 days before the payment date) and payment date.
At least 15 days before any such record date, the Company shall mail to
Securityholders a notice that states the record date, payment date, and amount
of such interest to be paid. Interest to be paid prior to the expiration of the
30-day grace period specified in Section 6.01 shall be paid to Securityholders
on the regular payment date for the interest payment that has not been made.
ARTICLE 3.
REDEMPTION
Section 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of paragraph 5, it shall notify the Trustee of the
redemption date and the principal amount of Securities to be redeemed.
The Company shall give each notice provided for in this Section at
least 50 days before the redemption date (unless a shorter notice period shall
be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed.
If less than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata or by lot or by a method that
complies with the requirements of any exchange on which the Securities are
listed and that the Trustee considers fair and appropriate. The Trustee shall
make the selection not more than 75 days and not less than 30 days before the
redemption date from Securities outstanding not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Securities and portions
of them it selects shall be in amounts of $1,000 or integral multiples of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be called for redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder whose Securities
are to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
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(2) the redemption price;
(3) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and
that, after the redemption date, upon surrender of such Security, a new
Security or Securities in principal amount equal to the unredeemed
portion will be issued in the name of the Holder thereof;
(4) the conversion price;
(5) the name and address of the Paying Agent and
Conversion Agent;
(6) that Securities called for redemption may be converted at
any time before the close of business on the day prior to the
redemption date;
(7) that Holders who want to convert Securities must
satisfy the requirements in paragraph 7 of the Securities;
(8) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price plus
accrued interest;
(9) that interest on Securities called for redemption
ceases to accrue on and after the redemption date;
(10) the paragraph of the Securities pursuant to which the
Securities are being redeemed; and
(11) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Securities.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date at the price set forth in the
Security.
Section 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Securities to be redeemed on that date (subject to
the rights of Holders of record on the relevant record date to receive interest
due on an interest payment date which may occur prior to the date of
redemption). The Trustee or the Paying Agent shall return to the Company any
money not required for that purpose.
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Section 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Security equal in principal amount to the unredeemed portion
of the Security surrendered.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities. Principal and
interest shall be considered paid on the date due if the Paying Agent (other
than the Company or a subsidiary) holds on that date money designated for and
sufficient to pay all principal and interest then due and such Paying Agent is
not prohibited from paying such money to the Holders on that date pursuant to
the terms of this Indenture; provided, however, that money held by the Paying
Agent for the benefit of holders of Senior Debt pursuant to the provisions of
Article 11 hereof shall not be considered paid within the meaning of this
Section 4.01.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal, at the rate borne by the Securities, compounded semiannually;
and (ii) overdue installments of interest (without regard to any applicable
grace period) at the same rate, compounded semiannually.
Section 4.02. SEC Reports.
The Company shall deliver to the Trustee and to the Holders within 15
days after it files them with the SEC copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. The Company also shall comply with the other provisions of TIA
Section 314(a). The Company shall timely comply with its reporting and filing
obligations under the applicable federal securities law.
Section 4.03. Compliance Certificate.
The Company shall deliver to the Trustee, within 105 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under, and complied with the covenants
and conditions contained in, this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
Company has kept, observed, performed and fulfilled each and every covenant, and
complied with the conditions, contained in this Indenture and is not in default
in the performance or observance of any of the terms, provisions and conditions
hereof (or, if a Default
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or Events of Default shall have occurred, describing all such Defaults or Events
of Default of which he may have knowledge) and that to the best of his knowledge
no event has occurred and remains in existence by reason of which payments on
account of the principal of or interest, if any, on the Securities are
prohibited. See Section 13.10.
The Company will, so long as any of the Securities are outstanding
deliver to the Trustee, forthwith upon becoming aware of (i) any Default, Event
of Default or default in the performance of any covenant, agreement or condition
in this Indenture or (ii) any event of default under any other mortgage,
indenture or instrument as that term is used in Section 6.01(4), an Officers'
Certificate specifying such Default, Event of Default or default.
Section 4.04. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, 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 4.05. Continued Existence.
Subject to Article 5, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence as
a corporation and will refrain from taking any action that would cause its
existence as a corporation to cease, including without limitation any action
that would result in its liquidation, winding up or dissolution.
Section 4.06. Taxes.
The Company shall, and shall cause each of its subsidiaries to, pay
prior to delinquency all taxes, assessments and governmental levies, except as
contested in good faith and by appropriate proceedings.
ARTICLE 5.
SUCCESSORS
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets to, any person unless:
(1) the person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, lease, conveyance or
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other disposition shall have been made, is a corporation organized and
existing under the laws of the United States, any state thereof or the
District of Columbia;
(2) the corporation formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, lease, conveyance or other disposition
shall have been made, assumes by supplemental indenture in a form
reasonably satisfactory to the Trustee all the obligations of the
Company under the Securities and this Indenture, except that it need
not assume the obligations of the Company as to conversion of
Securities if, pursuant to Section 10.18, the Company or another person
enters into a supplemental indenture obligating it to deliver the
securities, cash or other assets deliverable upon conversion of
Securities; and
(3) immediately after the transaction no Default or Event
of Default exists.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
person has been named as the Company herein; provided, however, that the
predecessor Company in the case of a sale, assignment, transfer, lease,
conveyance or other disposition shall not be released from the obligation to pay
the principal of and interest on the Securities.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on
any Security when the same becomes due and payable, whether or not such
payments shall be prohibited by Article 11, and the Default continues
for a period of 30 days after the date due and payable;
(2) the Company defaults in the payment of the principal
of any Security when the same becomes due and payable at maturity, upon
redemption or otherwise, whether or not such payments shall be
prohibited by Article 11;
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(3) the Company fails to comply with any of its other
agreements or covenants in, or provisions of, the Securities, this
Indenture or the Pledge Agreement and the Default continues for the
period and after the notice specified below, whether or not such
payments shall be prohibited by Article 11;
(4) an event of default occurs under any mortgage,
indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed
by the Company or any subsidiary (or the payment of which is guaranteed
by the Company or a subsidiary), whether such indebtedness or guarantee
now exists or shall be created hereafter, if (a) either (i) such event
of default results from the failure to pay when due principal of or
interest on such indebtedness within the grace period provided for in
such indebtedness (which failure continues beyond any applicable grace
period) (a "Payment Default") or (ii) as a result of such event of
default the maturity of such indebtedness has been accelerated prior to
its expressed maturity and (b) the principal amount of such
indebtedness, together with the principal amount of any other such
indebtedness under which there is a Payment Default or the maturity of
which has been so accelerated, aggregates $1,000,000 or more;
(5) a final judgment or final judgments for the payment
of money are entered by a court or courts of competent jurisdiction
against the Company or any subsidiary which remains undischarged for a
period (during which execution shall not be effectively stayed) of 30
days, provided that the aggregate of all such judgments exceeds
$500,000.
(6) the Company or any Material Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian
of it or for all or substantially all of its property,
(D) makes a general assignment for the benefit
of its creditors, or
(E) generally is unable to pay its debts as the
same become due;
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Material Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any
Material Subsidiary or for all or substantially all of its
property, or
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(C) orders the liquidation of the Company or any
Material Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or State Law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
A Default under clause (3) (other than Defaults under Section 4.05,
5.01 or 10.01 which Defaults shall be Events of Default with the notice but
without the passage of time specified in this paragraph) or (5) is not an Event
of Default until the Trustee or the Holders of at least 25% in principal amount
of the then outstanding Securities notify the Company of the Default and the
Company does not cure the Default within 30 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default."
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (6) and (7) of Section 6.01) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in principal amount of the
then outstanding Securities by notice to the Company and the Trustee, may
declare the unpaid principal of and accrued interest on all the Securities to be
due and payable. Upon such declaration the principal and interest shall be due
and payable immediately. If an Event of Default specified in clause (6) or (7)
of Section 6.01 occurs, such an amount shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. The Holders of a majority in principal amount of the
then outstanding Securities by notice to the Trustee may rescind an acceleration
and its consequences if (i) the rescission would not conflict with any judgment
or decree, (ii) all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, and (iii) the Company has delivered an Officers' Certificate to
the Trustee to the effect of clauses (i) and (ii) above.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
The Holders of a majority in principal amount of the then outstanding
Securities by notice to the Trustee may waive an existing Default or Event of
Default and its consequences except a
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continuing Default or Event of Default in the payment of the principal of or
interest on any Security or a Default or Event of Default under Article 10. When
a Default or Event of Default is waived, it is cured and ceases; but no such
waiver shall extend to any subsequent or other Default or impact any right
consequent thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, is unduly prejudicial to the rights of
other Securityholders, or would involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Securityholder may pursue a remedy with respect to this Indenture or
the Securities only if:
(1) the Holder gives to the Trustee notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of
the then outstanding Securities make a request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Securities do not give the
Trustee a direction inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder;
provided that a Holder shall not have the right to institute any such suit for
the enforcement of payment if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver or loss of the Lien of the
Indenture upon any property subject to such Lien.
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Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to bring suit for the enforcement of the right to convert
the Security shall not be impaired or affected without the consent of the
Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the Securities and interest on overdue principal
and interest and such further amount as shall be sufficient to cover the costs
and, to the extent lawful, expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may 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
the Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property. Nothing contained herein shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Debt to the extent required by Article
11;
Third: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
Fourth: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a
record date and payment date for any payment to Securityholders.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and
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the court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by Holders of more than 10% in principal
amount of the then outstanding Securities.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
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(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent (other than an agent
who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers, provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or any Statement in the Securities
other than its authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Securityholders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Security (including any
failure to make any mandatory redemption payment required hereunder), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
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Section 7.06. Reports by Trustee to Holders.
Within 60 days after the reporting date stated in Section 13.10, the
Trustee shall mail to Securityholders a brief report dated as of such reporting
date that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities are listed on
any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred by it. Such expenses may include the reasonable compensation
and out-of-pocket expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
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(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a Custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Securities
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07. Notwithstanding the replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring trustee with respect to
expenses and liabilities incurred by it prior to such replacement.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee, provided that such successor shall otherwise be qualified and eligible
to act as a Trustee pursuant to the provisions of this Article.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a). The Trustee shall always have a combined
capital and surplus as stated in Section 13.10. The Trustee is subject to TIA
Section 310(b), including the optional provision permitted by the second
sentence of TIA Section 310(b)(9). Section 13.10 lists any excluded indenture or
trust agreement.
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Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
Section 7.12. Sections Applicable to Registrar, Paying Agent and Conversion
Agent.
The term "Trustee" as used in Sections 7.01, 7.02, 7.03, 7.04 and 7.07
shall (unless the context otherwise requires) be construed as extending to and
including the Trustee acting in its capacity, if any, as Paying Agent, Registrar
and Conversion Agent.
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.01. Termination of Company's Obligations.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 and 8.03 shall survive) when all
outstanding Securities theretofore authenticated and issued have been delivered
to the Trustee for cancellation and the Company has paid all sums payable
hereunder. In addition, subject to Section 8.04, the Company may terminate all
of its obligations under this Indenture (except the Company's obligations under
Sections 7.07 and 8.03) if:
(1) the Securities mature within one year or all of them
are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption;
(2) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations sufficient without
investment of such money or reinvestment of interest or proceeds from
such U.S. Government Obligation to pay principal and interest on the
Securities to maturity or redemption, as the case may be, and to pay
all other sums payable by it hereunder. The Company may make the
deposit only during the one-year period and only if Article 11 permits
it;
(3) the Company delivers to the Trustee a certificate
from a nationally recognized firm of independent certified public
accountants expressing their opinion that the money or U.S. Government
Obligations so deposited, without investment of such money or
reinvestment of interest or proceeds on such U.S. Government
Obligations, will provide cash at such times and in such amounts as
will be sufficient to pay principal and interest when due on all the
Securities to maturity or redemption, as the case may be;
(4) the Company delivers to the Trustee an Opinion of
Counsel stating that (A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since
the date of this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such
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Opinion of Counsel shall confirm that, the holders of the outstanding
Securities will not recognize income, gain or loss for federal income
tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amount and in the same manner and at the
same time as would have been the case if such defeasance had not
occurred;
(5) no Default or Event of Default or event which with
notice or lapse of time or both would become an Event of Default shall
have occurred and be continuing on the date of such deposit and after
giving effect thereto or, insofar as subsections (6) and (7) of Section
6.01 are concerned, at any time during the period ending on and
including the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);
(6) such defeasance shall not result in a breach or
violation of, or constitute a default under any agreement or instrument
to which the Company or any of its subsidiaries is bound, and shall not
be prohibited by Article 11;
(7) the Company delivers to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, except that if a court were to rule under
any such law in any case or proceeding that the trust funds remained
property of the Company, no opinion is given as to the effect of such
laws on the trust funds except the following: (A) assuming such trust
funds remained in the Trustee's possession prior to such court ruling
to the extent not paid to holders of the Securities, the Trustee will
hold, for the benefit of such holders, a valid and perfected security
interest in such trust funds that is not avoidable in bankruptcy or
otherwise and (B) such holders will be entitled to receive adequate
protection of their interest in such trust funds if such trust funds
are used;
(8) the Company delivers to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the holders of the Securities over the other
creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others;
(9) the Company delivers to the Trustee an Opinion of
Counsel stating that neither the trust nor the Trustee will be required
to register as an investment company under the Investment Company Act
of 1940, as amended; and
(10) the Company delivers to the Trustee an Officers'
Certificate stating that all conditions precedent to the defeasance and
discharge of the Securities as contemplated by this Article 8 have been
complied with.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 4.01, 7.07, 8.03, 8.04 and in Article 10, shall survive until the
Securities are no longer outstanding. Thereafter, only the Company's obligations
in Sections 7.07 and 8.03 shall survive.
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After a deposit made pursuant to this Section 8.01 and satisfaction of
the conditions set forth herein, the Trustee upon request shall acknowledge in
writing the discharge of the Company's obligations under this Indenture except
for those surviving obligations specified above.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged. In order to have money available on a
payment date to pay principal or interest on the Securities, the U.S. Government
Obligations shall be payable as to principal or interest on or before such
payment date in such amounts as will provide the necessary money. U.S.
Government Obligations shall not be callable at the issuer's option.
Section 8.02. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal and interest on the
Securities. Money and securities so held in trust are not subject to Article 11.
Section 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.
Subject to applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years after
the date upon which such payment shall have become due; provided, however, that
the Company shall have first caused notice of such payment to the Company to be
mailed to each Securityholder entitled thereto no less than 30 days prior to
such payment. After payment to the Company, Securityholders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.
Section 8.04. Reinstatement.
If (i) the Trustee or Paying Agent is unable to apply any money in
accordance with Section 8.02 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 Securities so request by written notice to the Trustee, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02; provided, however, that if the Company makes any
payment of interest on or principal of any Security following the reinstatement
of its obligations, the Company shall be subrogated to the
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rights of the Holders of such Securities to receive such payment from the money
or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENTS
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture or the Securities
without the consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Sections 5.01 and 10.18;
(3) to provide for uncertificated Securities in addition
to certificated Securities; or
(4) to make any change that does not adversely affect the
rights hereunder of any Securityholder.
Section 9.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Trustee may amend this
Indenture or the Securities with the written consent of the Holders of at least
a majority in principal amount of the then outstanding Securities. Subject to
Sections 6.04 and 6.07, the Holders of a majority in principal amount of the
Securities then outstanding may also waive compliance in a particular instance
by the Company with any provision of this Indenture or the Securities. However,
without the consent of each Securityholder affected, an amendment or waiver
under this Section may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment or waiver;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or change the fixed maturity
of any Security or alter the redemption provisions with respect
thereto;
(4) make any Security payable in money other than that
stated in the Security;
(5) make any change in Section 6.04, 6.07 or 9.02 (this
sentence);
(6) make any change that adversely affects the right to
convert any Security;
(7) make any change in Article 11 that adversely affects
the rights of any Securityholder; or
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(8) waive a default in the payment of the principal of,
or interest on, any Security or any Default under Article 10.
An amendment or waiver under this Section may not make any change that
adversely affects the rights under Article 11 of any holder of an issue of
Senior Debt unless the holders of the issue pursuant to its terms consent to the
change or the change is otherwise permissible.
To secure a consent of the Holders under this Section, it shall not be
necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing the amendment
or waiver.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall be set forth
in a supplemental indenture that complies with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date on which the Trustee receives an Officer's
Certificate certifying that the Holders of the requisite principal amount of
Securities have consented to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, then notwithstanding the provisions of the
immediately preceding paragraph, those persons who were Holders at such record
date (or their duly designated proxies), and only those persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of
Securities required hereunder for such amendment or waiver to be effective shall
have also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Securityholder, unless it is of the type described in any of clauses (1) through
(8) of Section 9.02. In such case, the amendment or waiver shall bind each
Holder of a Security who has consented to it and every subsequent Holder of a
Security that evidences the same debt as the consenting Holder's Security.
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Section 9.05. Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an amendment or
waiver on any Security thereafter authenticated. The Company in exchange for all
Securities may issue and the Trustee shall authenticate new Securities that
reflect the amendment or waiver.
Section 9.06. Trustee Protected.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
13.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
CONVERSION
Section 10.01. Conversion Privilege.
A Holder of a Security may convert it into Common Stock at any time
during the period stated in paragraph 7 of the Securities. The number of shares
issuable upon conversion of a Security is determined as follows: Divide the
principal amount to be converted by the conversion price in effect on the
conversion date. Round the result to the nearest 1/100th of a share.
The initial conversion price is stated in paragraph 7 of the
Securities. The conversion price is subject to adjustment.
A Holder may convert a portion of a Security if the portion is $1,000
or an integral multiple of $1,000. Provisions of this Indenture that apply to
conversion of all of a Security also apply to conversion of a portion of it.
"Common Stock" means Common Stock of the Company as it exists on the
date of this Indenture or as it may be constituted from time to time.
Section 10.02. Conversion Procedure.
To convert a Security a Holder must satisfy the requirements in
paragraph 7 of the Securities. The date on which the Holder satisfies all those
requirements is the conversion date. As soon as practical after the conversion
date, the Company shall deliver through the Conversion Agent a certificate for
the number of full shares of Common Stock issuable upon the conversion and a
check for any fractional share determined pursuant to Section 10.03. The person
in whose name the certificate is registered shall become the stockholder of
record on and after the conversion date.
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No payment or adjustment will be made for accrued interest on a
converted Security or dividends on any Common Stock issued. However, interest
will be paid on any interest payment date with respect to Securities surrendered
for conversion after a record date for the payment of interest to the registered
Holder on such record date.
If a Holder converts more than one Security at the same time, the
number of full shares issuable upon the conversion shall be based on the total
principal amount of the Securities converted.
Upon a surrender of a Security that is converted in part, the Company
shall issue and the Trustee shall authenticate for the Holder a new Security
equal in principal amount to the unconverted portion of the Security
surrendered.
If the last day on which a Security may be converted is a Legal Holiday
in a place where a Conversion Agent is located, the Security may be surrendered
to that Conversion Agent on the next succeeding day that is not a Legal Holiday.
Section 10.03. Fractional Shares.
The Company will not issue a fractional share of Common Stock upon
conversion of a Security. Instead the Company will deliver its check for the
current market value of the fractional share. The current market value of a
fraction of a share is determined as follows: Multiply the current market price
(as set forth below) of a full share by the fraction. Round the result to the
nearest cent.
The current market price of a share of Common Stock is the Quoted Price
of the Common Stock on the last trading day prior to the conversion date. In the
absence of such a quotation, the Company shall determine the current market
price on the basis of such quotations as it considers appropriate.
Section 10.04. Taxes on Conversion.
If a Holder of a Security converts it, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion. However, the Holder shall pay any such tax
which is due because the shares are issued in a name other than the Holder's
name.
Section 10.05. Company to Provide Stock.
The Company has reserved and shall continue to reserve out of its
authorized but unissued Common Stock or its Common Stock held in treasury,
solely for the purpose of issuance upon conversion of Securities as herein
provided, enough shares of Common Stock to permit the conversion of the
Securities in full.
All shares of Common Stock which may be issued upon conversion of the
Securities shall be duly authorized, validly issued, fully paid and
non-assessable when issued.
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The Company will take all reasonable necessary actions to comply with
all securities laws regulating the offer and delivery of shares of Common Stock
upon conversion of Securities and will take all reasonable necessary actions to
list such shares on each national securities exchange on which the Common Stock
is listed.
Section 10.06. Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock
into a greater number of shares;
(3) combines its outstanding shares of Common Stock into
a smaller number of shares;
(4) makes a distribution on its Common Stock in shares of
its capital stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any
shares of its capital stock;
then the conversion privilege and the conversion price in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted shall be entitled to receive the number of shares of
capital stock of the Company which he would have owned immediately following
such action if he had converted the Security immediately prior to such action.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of it may
receive shares of two or more classes of capital stock of the Company, the
Company shall determine the allocation of the adjusted conversion price between
the classes of capital stock. After such allocation, the conversion privilege
and the conversion price of each class of capital stock shall thereafter be
subject to adjustment on terms comparable to those applicable to Common Stock in
this Article.
Section 10.07. Adjustment for Rights Issue.
If the Company distributes any rights or warrants to substantially all
holders of its Common Stock entitling them for a period expiring within 60 days
after the record date mentioned below to subscribe for or purchase shares of
Common Stock at a price per share less than the current market price per share
on that record date, the conversion price shall be adjusted in accordance with
the formula:
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N x P
O + -----
M
C' = C x -----------
O + N
where:
C' = the adjusted conversion price.
C = the current conversion price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such rights or
warrants are issued and shall become effective immediately after the record date
for the determination of stockholders entitled to receive the rights or
warrants. If at the end of the period during which such warrants or rights are
exercisable, not all warrants or rights shall have been exercised, the
conversion price shall be immediately readjusted to what it would have been if
"N" in the above formula had been the number of shares actually issued.
Section 10.08. Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock any of
its assets or debt securities or any rights or warrants to purchase assets, debt
securities or other securities of the Company, the conversion price shall be
adjusted in accordance with the formula:
M - F
C' = C x -----
M
where:
C' = the adjusted conversion price.
C = the current conversion price.
M = the current market price per share of Common Stock on the record
date mentioned below.
F = the fair market value on the record date of the assets, securities,
rights or warrants applicable to one share of Common Stock. The
Board of Directors shall determine the fair market value.
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The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This Section does not apply to regular cash dividends or cash
distributions paid out of consolidated current earnings as shown on the books of
the Company. Also, this Section does not apply to rights or warrants referred to
in Section 10.07.
Section 10.09. Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a consideration per
share less than the current market price per share on the date the Company fixes
the offering price of such additional shares, the conversion price shall be
adjusted in accordance with the formula:
P
O + -
M
C' = C x -----
A
where:
C' = the adjusted conversion price.
C = the then current conversion price.
O = the number of shares outstanding immediately prior to the issuance
of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the current market price per share on the date of issuance of such
additional shares.
A = the number of shares outstanding immediately after the issuance of
such additional shares.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This Section does not apply to (i) any of the transactions described in
Sections 10.07, 10.08 and 10.10, (ii) the conversion of Securities, or the
conversion, exchange or exercise of other securities convertible or exchangeable
for Common Stock, (iii) Common Stock issued to the Company's employees under
bona fide employee benefit plans adopted by the Board of Directors and approved
by the holders of Common Stock when required by law, if such Common Stock would
otherwise be covered by this Section (but only to the extent that the aggregate
number of shares excluded hereby and issued after the date of this Indenture
shall not exceed 5% of the Common Stock outstanding at the time of the adoption
of each such plan, exclusive of antidilution adjustments thereunder), (iv)
Common Stock issued to acquire, or in the acquisition of, all or any portion of
a business as a going concern, in an arm's length transaction between the
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Company and an unaffiliated third party, whether such acquisition shall be
effected by purchase of assets, exchange of securities, merger, consolidation or
otherwise, or (v) Common Stock issued in a bona fide public offering pursuant to
a firm commitment underwriting.
Section 10.10. Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or exchangeable
or exercisable for Common Stock (other than the Securities or securities issued
in transactions described in Sections 10.07 and 10.08) for a consideration per
share of Common Stock initially deliverable upon conversion, exchange or
exercise of such securities less than the current market price per share on the
date of issuance of such securities, the conversion price shall be adjusted in
accordance with this formula:
P
O + -
M
C' = C x -----
O + D
where:
C' = the adjusted conversion price.
C = the then current conversion price.
O = the number of shares outstanding immediately prior to the issuance
of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the current market price per share on the date of issuance of such
securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for or upon exercise of such securities at the initial
conversion, exchange or exercise rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance. If all of the
Common Stock deliverable upon conversion, exchange or exercise of such
securities have not been issued when such securities are no longer outstanding,
then the conversion price shall promptly be readjusted to the conversion price
which would then be in effect had the adjustment upon the issuance of such
securities been made on the basis of the actual number of shares of Common Stock
issued upon conversion, exchange or exercise of such securities.
This Section does not apply to (i) convertible securities issued to
acquire, or in the acquisition of, all or any portion of a business as a going
concern, in an arm's length transaction between the Company and an unaffiliated
third party, whether such acquisition shall be effected by purchase of assets,
exchange of securities, merger, consolidation or otherwise, or (ii) convertible
securities issued in a bona fide public offering pursuant to a firm commitment
underwriting.
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Section 10.11. Current Market Price.
In Sections 10.07, 10.08, 10.09 and 10.10, the current market price per
share of Common Stock on any date shall equal 95% of the average of the Quoted
Prices of the Common Stock for 30 consecutive trading days ending on the last
full trading day prior to the date in question. In the absence of one or more
such quotations, the Company shall determine the current market price on the
basis of such quotations as it considers appropriate.
Section 10.12. Consideration Received.
For purposes of any computation respecting consideration received
pursuant to Sections 10.09 and 10.10, the following shall apply:
(1) in the case of the issuance of shares of Common Stock
for cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock
for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined in good faith by the Board of Directors
(irrespective of the accounting treatment thereof), whose determination
shall be conclusive, and described in a Board resolution which shall be
filed with the Trustee; and
(3) in the case of the issuance of securities convertible
into or exchangeable or exercisable for shares, the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Company for the issuance of such securities plus the
additional minimum consideration, if any, to be received by the Company
upon the conversion or exchange thereof (the consideration in each case
to be determined in the same manner as provided in clauses (1) and (2)
of this Section).
Section 10.13. When Adjustment May Be Deferred.
No adjustment in the conversion price need be made unless the
adjustment would require an increase or decrease of at least 1% in the
conversion price. Any adjustments that are not made shall be carried forward and
taken into account in any subsequent adjustment.
All calculations under this Article shall be made to the nearest cent
or to the nearest 1/100th of a share, as the case may be.
Section 10.14. When No Adjustment Required.
No adjustment need be made for a transaction referred to in Sections
10.06, 10.07, 10.08, 10.09 or 10.10 if all Securityholders are entitled to
participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Stock participate in the transaction.
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No adjustment need be made for rights to purchase Common Stock pursuant
to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
Section 10.15. Notice of Adjustment.
Whenever the conversion price is adjusted, the Company shall promptly
mail to Securityholders a notice of the adjustment. The Company shall file with
the Trustee a certificate from the Company's independent public accountants
briefly stating the facts requiring the adjustment and the manner of computing
it. The certificate shall be conclusive evidence that the adjustment is correct.
Section 10.16. Voluntary Reduction.
The Company from time to time may reduce the conversion price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period, provided, that in no event may the
conversion price be less than the par value of a share of Common Stock.
Whenever the conversion price is reduced, the Company shall mail to
Securityholders and the Trustee a notice of the reduction. The Company shall
mail the notice at least 15 days before the date the reduced conversion price
takes effect. The notice shall state the reduced conversion price and the period
it will be in effect.
A reduction of the conversion price does not change or adjust the
conversion price otherwise in effect for purposes of Sections 10.06, 10.07,
10.08, 10.09 and 10.10.
Section 10.17. Notice of Certain Transactions.
If:
(1) the Company takes any action that would require an
adjustment in the conversion price pursuant to Sections 10.06, 10.07,
10.08, 10.09 or 10.10 and if the Company does not let Securityholders
participate pursuant to Section 10.14;
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 10.18; or
(3) there is a liquidation or dissolution of the Company,
the Company shall mail to Securityholders a notice stating the proposed record
date for a dividend or distribution or the proposed effective date of a
subdivision, combination,
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reclassification, consolidation, merger, transfer, lease, liquidation or
dissolution. The Company shall mail the notice at least 15 days before such
date. Failure to mail the notice or any defect in it shall not affect the
validity of the transaction.
Section 10.18. Reorganization of Company.
If the Company is a party to a transaction subject to Section 5.01, or
a merger which reclassifies or changes its outstanding Common Stock, upon
consummation of such transaction the Securities shall automatically become
convertible into the kind and amount of securities, cash or other assets which
the Holder of a Security would have owned immediately after the consolidation,
merger, transfer or lease if the Holder had converted the Security immediately
before the effective date of the transaction. Concurrently with the consummation
of such transaction, the person obligated to issue securities or deliver cash or
other assets upon conversion of the Securities shall enter into a supplemental
indenture so providing and further providing for adjustments which shall be as
nearly equivalent as may be practical to the adjustments provided for in this
Article. The successor Company shall mail to Securityholders a notice describing
the supplemental indenture.
If securities deliverable upon conversion of Securities, as provided
above, are themselves convertible into the securities of an affiliate of the
formed, surviving, transferee or lessee corporation, that issuer shall join in
the supplemental indenture which shall so provide.
If this Section applies, Section 10.06 does not apply.
Section 10.19. Company Determination Final.
Subject to Section 10.15, any determination that the Company or the
Board of Directors must make pursuant to Section 10.03, 10.06, 10.08, 10.09,
10.10, 10.11, 10.12 or 10.14 is conclusive.
Section 10.20. Trustee's Disclaimer.
The Trustee has no duty to determine when an adjustment under this
Article should be made, how it should be made or what it should be. The Trustee
has no duty to determine whether any provisions of a supplemental indenture
under Section 10.18 are correct. The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities. The Trustee shall not be responsible for the Company's failure to
comply with this Article. Each Conversion Agent other than the Company shall
have the same protection under this Section as the Trustee.
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ARTICLE 11.
SUBORDINATION
Section 11.01. Agreement to Subordinate.
The Company agrees, and each Securityholder by accepting a Security
agrees, that the indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full of all Senior Debt, and that the subordination is for
the benefit of the holders of Senior Debt; provided, however, that (a)
substantially concurrently herewith, the Company and the Collateral Agent, for
the benefit of the Holders, are entering into the Pledge Agreement, (b)
notwithstanding any provision of this Article 11 to the contrary, (i) the
Collateral Agent may exercise remedies under the Pledge Agreement in accordance
with its terms, and (ii) in the event of any such exercise of remedies, the
Collateral Agent shall be entitled to receive and apply any proceeds of any
Pledged Collateral towards the indebtedness evidenced by the Securities prior to
the application of the same toward repayment of Senior Debt.
Section 11.02. Certain Definitions.
"Debt" of any person means any indebtedness, contingent or in respect
of borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such person or only to a portion thereof), or evidenced by bonds,
notes, debentures or similar instruments or letters of credit, or representing
the balance deferred and unpaid of the purchase price of any property or
interest therein, except any such balance that constitutes a trade payable, if
and to the extent such indebtedness would appear as a liability upon a balance
sheet of such person prepared on a consolidated basis in accordance with
generally accepted accounting principles.
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Debt.
"Senior Debt" means all Debt (present or future) created, incurred,
assumed or guaranteed by the Company (and all renewals, extensions or refundings
thereof), unless the instrument under which such Debt is created, incurred,
assumed or guaranteed expressly provides that such Debt is not senior or
superior in right of payment to the Securities. Notwithstanding anything to the
contrary in the foregoing, Senior Debt shall not include (i) any Debt of the
Company to any of its subsidiaries, (ii) any liability for Federal, state, local
or other taxes owed or owing by the Company, (iii) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such liabilities), or
(iv) any obligations with respect to any capital stock.
Section 11.03. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property:
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(1) holders of Senior Debt shall be entitled to receive
payment in full in cash of the principal of and interest (including
interest accruing after the commencement of any such proceeding) to the
date of payment on the Senior Debt before Securityholders shall be
entitled to receive any payment of principal of or interest on
Securities; and
(2) until the Senior Debt is paid in full in cash, any
distribution to which Securityholders would be entitled but for this
Article shall be made to holders of Senior Debt as their interests may
appear, except that Securityholders may receive securities that are
subordinated to Senior Debt to at least the same extent as the
Securities.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by set-off or otherwise.
Section 11.04. Default on Senior Debt.
Upon the final maturity of any Senior Debt by lapse of time,
acceleration or otherwise, all such Senior Debt shall first be paid in full, or
such payment duly provided for in cash or in a manner satisfactory to the
holders of such Senior Debt, before any payment is made by the Company or any
person acting on behalf of the Company on account of the principal or interest
of the Securities.
The Company may not pay principal of or interest on the Securities and
may not acquire any Securities for cash or property (other than capital stock of
the Company or other securities of the Company that are subordinated to Senior
Debt to at least the same extent as the Securities) if:
(1) a default on Senior Debt occurs and is continuing
that permits holders of such Senior Debt to accelerate its maturity,
and
(2) the default is the subject of judicial proceedings or
the Company receives a notice of the default from a person who may give
it pursuant to Section 11.12. If the Company receives any such notice,
a subsequent notice received within nine months thereafter relating to
the same issue of Senior Debt shall not be effective for purposes of
this Section.
The Company shall resume payments on the Securities and may acquire
them when:
(a) the default is cured or waived, or
(b) 120 days pass after the notice is given if the default is not
the subject of judicial proceedings,
if this Article otherwise permits the payment or acquisition at that time.
Section 11.05. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration. The Company shall pay the Securities when 120 days pass after the
acceleration occurs if this Article permits the payment at
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that time; provided, however, that if no Senior Debt is outstanding at the time
of such acceleration, the Company shall pay the Securities in accordance with
the provisions of Article 6.
Section 11.06. When Distribution Must Be Paid Over.
In the event that the Company shall make any payment to the Trustee on
account of the principal or interest on the Securities at a time when such
payment is prohibited by Section 11.03 or 11.04, such payment shall be held by
the Trustee, in trust for the benefit of, and shall be paid forthwith over and
delivered to, the holders of Senior Debt (pro rata as to each of such holders on
the basis of the respective amounts of Senior Debt held by them) or their
representative or the trustee under the indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Senior Debt
remaining unpaid to the extent necessary to pay all Senior Debt in full in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
If a distribution is made to Securityholders that because of this
Article should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Debt and pay it over
to them as their interests may appear.
Section 11.07. Notice by Company.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of principal of or
interest on the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior Debt
provided in this Article. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
Section 11.08. Subrogation.
After all Senior Debt is paid in full and until the Securities are paid
in full, Securityholders shall be subrogated to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Securityholders have been applied to the
payment of Senior Debt. A distribution made under this Article to holders of
Senior Debt which otherwise would have been made to Securityholders is not, as
between the Company and Securityholders, a payment by the Company on Senior
Debt.
Section 11.09. Relative Rights.
This Article defines the relative rights of Securityholders and holders
of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders,
the obligation of the Company, which is absolute and unconditional, to
pay principal of and interest on the Securities in accordance with
their terms;
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(2) affect the relative rights of Securityholders and
creditors of the Company other than holders of Senior Debt or, as
between the Company and the Trustee, the obligations of the Company to
the Trustee; or
(3) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders of Senior Debt to receive
distributions otherwise payable to Securityholders.
If the Company fails because of this Article to pay principal of or
interest on Security on the due date, the failure is still a Default or Event of
Default.
Section 11.10. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of
the indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.
Section 11.11. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Section 11.12. Rights of Trustee and Paying Agent.
The Trustee or Paying Agent may continue to make payments on the
Securities until it receives notice of facts that would cause a payment of
principal of or interest on the Securities to violate this Article. Only the
Company, a Representative or a holder of an issue of Senior Debt that has no
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
ARTICLE 12.
COLLATERAL AND SECURITY
Section 12.01. Pledge Agreement.
The due and punctual payment of the principal of and interest, if any,
on the Securities when and as the same shall be due and payable, whether on an
interest payment date, at maturity, by acceleration, repurchase, redemption or
otherwise, and interest on the overdue principal of and interest (to the extent
permitted by law), if any, on the Securities and performance of all other
obligations of the Company to the Holders of Securities or the Trustee under
this Indenture and the Securities, according to the terms hereunder or
thereunder, shall be secured as provided in the Pledge Agreement which the
Company has entered into simultaneously with the execution of this Indenture and
which is attached as Exhibit B hereto. Each Holder of Securities, by its
acceptance thereof, consents and agrees to the terms of the Pledge Agreement
(including, without limitation,
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the provisions providing for foreclosure and release of Pledged Collateral) as
the same may be in effect or may be amended from time to time in accordance with
its terms and authorizes and directs the Collateral Agent to enter into the
Pledge Agreement and to perform its obligations and exercise its rights
thereunder in accordance therewith. The Company shall deliver to the Trustee
copies of all documents delivered to the Collateral Agent pursuant to the Pledge
Agreement, and shall do or cause to be done all such acts and things as may be
necessary or proper, or as may be required by the provisions of the Pledge
Agreement, to assure and confirm to the Trustee and the Collateral Agent the
security interest in the Pledged Collateral contemplated hereby, by the Pledge
Agreement or any part thereof, as from time to time constituted, so as to render
the same available for the security and benefit of this Indenture and of the
Securities secured hereby, according to the intent and purposes herein
expressed. The Company shall take, or shall cause its Subsidiaries to take, upon
request of the Trustee, any and all actions reasonably required to cause the
Pledge Agreement to create and maintain, as security for the Obligations of the
Company hereunder, a valid and enforceable perfected Lien in and on all the
Pledged Collateral, in favor of the Collateral Agent for the benefit of the
Holders of Securities, superior to and prior to the rights of all third persons
and subject to no Liens other than the security interests granted to third
persons as expressly contemplated by the Pledge Agreement.
Section 12.02. Recording and Opinions.
(a) The Company shall furnish to the Trustee simultaneously with
the execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements or other instruments necessary to make effective the Lien intended to
be created by the Pledge Agreement, and reciting with respect to the security
interests in the Pledged Collateral, the details of such action, or (ii) stating
that, in the opinion of such counsel, no such action is necessary to make such
Lien effective.
(b) The Company shall furnish to the Collateral Agent and the
Trustee on September 1 in each year beginning with September 1, 2000, an Opinion
of Counsel, dated as of such date, either (i) (A) stating that, in the opinion
of such counsel, action has been taken with respect to the recording,
registering, filing, re-recording, re-registering and refiling of all
supplemental indentures, financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain the Lien of the
Pledge Agreement and reciting with respect to the security interests in the
Pledged Collateral the details of such action or referring to prior Opinions of
Counsel in which such details are given, (B) stating that, based on relevant
laws as in effect on the date of such Opinion of Counsel, all financing
statements and continuation statements have been executed and filed that are
necessary as of such date and during the succeeding 12 months fully to preserve
and protect, to the extent such protection and preservation are possible by
filing, the rights of the Holders of Securities and the Collateral Agent and the
Trustee hereunder and under the Pledge Agreement with respect to the security
interests in the Pledged Collateral, or (ii) stating that, in the opinion of
such counsel, no such action is necessary to maintain such Lien and assignment.
(c) The Company shall otherwise comply with the provisions of TIA
Section 314(b).
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Section 12.03. Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section 12.03,
Pledged Collateral may be released from the Lien and security interest created
by the Pledge Agreement at any time or from time to time in accordance with the
provisions of the Pledge Agreement or as provided hereby.
(b) At any time when a Default or Event of Default shall have
occurred and be continuing and the maturity of the Securities shall have been
accelerated (whether by declaration or otherwise) and the Trustee shall have
delivered a notice of acceleration to the Collateral Agent, no release of
Pledged Collateral pursuant to the provisions of the Pledge Agreement shall be
effective as against the Holders of Securities.
(c) The release of any Pledged Collateral from the terms of this
Indenture and the Pledge Agreement shall not be deemed to impair the security
under this Indenture in contravention of the provisions hereof if and to the
extent the Pledged Collateral is released pursuant to the terms of the Pledge
Agreement. To the extent applicable, the Company shall cause TIA Section 313(b),
relating to reports, and TIA Section 314(d), relating to the release of property
or securities from the Lien and security interest of the Pledge Agreement and
relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Pledge Agreement, to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent person,
which person shall be an independent engineer, appraiser or other expert
selected or approved by the Trustee and the Collateral Agent in the exercise of
reasonable care.
Section 12.04. Certificates of the Company.
The Company shall furnish to the Trustee and the Collateral Agent,
prior to each proposed release of Pledged Collateral pursuant to the Pledge
Agreement, (i) all documents required by TIA Section 314(d) and (ii) an Opinion
of Counsel, which may be rendered by internal counsel to the Company, to the
effect that such accompanying documents constitute all documents required by TIA
Section 314(d). The Trustee may, to the extent permitted by Sections 7.01 and
7.02 hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and such
Opinion of Counsel.
Section 12.05. Certificates of the Trustee.
In the event that the Company wishes to release Pledged Collateral in
accordance with the Pledge Agreement and has delivered the certificates and
documents required by the Pledge Agreement and Sections 13.03 and 13.04 hereof,
the Trustee shall determine whether it has received all documentation required
by TIA Section 314(d) in connection with such release and, based on such
determination and the Opinion of Counsel delivered pursuant to Section 13.04(b),
shall deliver a certificate to the Collateral Agent setting forth such
determination.
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Section 12.06. Authorization of Actions to Be Taken by the Trustee Under the
Pledge Agreement.
Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee
may, in its sole discretion and without the consent of the Holders of
Securities, direct, on behalf of the Holders of Securities, the Collateral Agent
to, take all actions it deems necessary or appropriate in order to (a) enforce
any of the terms of the Pledge Agreement and (b) collect and receive any and all
amounts payable in respect of the Obligations of the Company hereunder. The
Trustee shall have power to institute and maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Pledged Collateral by any
acts that may be unlawful or in violation of the Pledge Agreement or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Holders of Securities
in the Pledged Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Securities or of the Trustee).
Section 12.07. Authorization of Receipt of Funds by the Trustee Under the Pledge
Agreement.
The Trustee is authorized to receive any funds for the benefit of the
Holders of Securities distributed under the Pledge Agreement, and to make
further distributions of such funds to the Holders of Securities according to
the provisions of this Indenture.
Section 12.08. Termination of Security Interest.
Upon the payment in full of all Obligations of the Company under this
Indenture and the Securities, or upon Legal Defeasance, the Trustee shall, at
the request of the Company, deliver a certificate to the Collateral Agent
stating that such Obligations have been paid in full, and instruct the
Collateral Agent to release the Liens pursuant to this Indenture and the Pledge
Agreement.
ARTICLE 13.
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 13.02. Notices.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail to the other's address stated in Section 13.10. The Company or the Trustee
by notice to the other may designate additional or different address for
subsequent notices or communications.
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Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Securityholder or any defect in
it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
Section 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture 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 statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
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(4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
Section 13.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, Paying Agent or Conversion Agent may make
reasonable rules and set reasonable requirements for its functions.
Section 13.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the State of New York are not required to be open. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
Section 13.08. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities, the Indenture or the Pledge Agreement or for any claim based on, in
respect of or by reason of such obligations or their creation. Each
Securityholder by excepting a Security waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the
Securities.
Section 13.09. Counterparts.
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
Section 13.10. Variable Provisions.
"Officer" means Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
The Company initially appoints the Trustee as Conversion Agent, Paying
Agent, Registrar and authenticating agent.
The first certificate pursuant to Section 4.03 shall be for the fiscal
year ending on December 31, 1999.
The reporting date for Section 7.06 is May 15 of each year. The first
reporting date is May 15, 2000.
The Trustee shall always have a combined capital and surplus of at
least $100,000,000 as set forth in its most recent published annual report of
condition.
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The Company's address is:
16955 Xxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx, President and Chief Executive Officer
Facsimile No.: (000) 000-0000
The Trustee's address is:
Norwest Bank Minnesota, National Association
Corporate Trust Services
Sixth & Marquette
MAC-N9303-120
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Section 13.11. Governing Law.
The internal laws of the State of New York shall govern this Indenture
and the Securities, without regard to the conflicts of laws provisions thereof.
Section 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 13.13. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 13.14. Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.15. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signature Page Follows]
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[Indenture Signature Page]
SIGNATURES
Dated: as of ________________ EXCEL LEGACY CORPORATION,
a Delaware corporation
By ________________________
Dated: as of ________________ NORWEST BANK MINNESOTA,
National Association
By ________________________
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Exhibit A
(Face of Security)
CUSIP ____________
No. ___ $ _____________
9.0% CONVERTIBLE REDEEMABLE SUBORDINATED SECURED DEBENTURE
DUE _________ __, 2004
EXCEL LEGACY CORPORATION
promises to pay to
_____________
or registered assigns,
the principal sum of _____________ Dollars on _______ __, 2004
Interest Payment Dates: ___________ and ___________
Record Dates: ___________ and ___________
This is one of the Securities described in the
within-mentioned Indenture. Additional provisions of this Security
are set forth on the other side of this Security.
Authenticated: Dated:
Norwest Bank Minnesota, National Association, Excel Legacy Corporation
as Trustee
By ________________________ By _____________________
Authorized Signature
OR
as Authenticating Agent
By ________________________
Authorized Signature
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(Back of Security)
9.0% Convertible Redeemable Subordinated Secured Debenture
due _________ __, 2004
1. Interest. Excel Legacy Corporation, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semiannually on _________ __ and _________ __ of each year. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from August 15, 1999. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the
Securities (except defaulted interest) to the persons who are registered holders
of Securities at the close of business on the record date for the next interest
payment date even though Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay principal and
interest by check payable in such money. It may mail an interest check to a
holder's registered address.
3. Paying Agent, Registrar and Conversion Agent. The Trustee will
act as Conversion Agent, Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar, Conversion Agent or co-registrar without prior notice.
The Company or any of its subsidiaries may act in any such capacity.
4. Indenture and Pledge Agreement. The Company issued the
Securities under an Indenture dated as of _________ __, 1999 ("Indenture")
between the Company and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA") as
in effect on the date of the Indenture. The Securities are subject to, and
qualified by, all such terms, certain of which are summarized hereon, and
Securityholders are referred to the Indenture and such Act for a statement of
such terms. The Securities are unsecured general obligations of the Company
limited to $___________ in aggregate principal amount. The Securities are
secured by a pledge of certain shares of common stock, par value $.0001 per
share, of Price Enterprises, Inc., a Maryland corporation, pursuant to the
Pledge Agreement referred to in the Indenture.
5. Optional Redemption. On or after _______ __, 2001, the Company
may redeem all or some of the Securities from time to time at the redemption
price of 100% of the principal amount of such Securities plus accrued interest
to the redemption date.
6. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part
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but only in whole multiples of $1,000. In the event of a redemption of less than
all of the Securities, the Securities will be chosen for redemption by the
Trustee, generally pro rata or by lot. On and after the redemption date interest
ceases to accrue on Securities or portions of them called for redemption.
If this Security is redeemed subsequent to a record date with respect
to any interest payment date specified above and on or prior to such interest
payment date, then any accrued interest will be paid to the person in whose name
this Security is registered at the close of business on such record date.
7. Conversion. A holder of a Security may convert it into Common
Stock of the Company at any time before the close of business (New York time) on
the day prior to the maturity date. If the Security is called for redemption,
the holder may convert it at any time before the close of business (New York
time) on the day prior to the redemption date (unless the Company shall default
in payment due upon redemption thereof). The initial conversion price of $5.50
per share is subject to adjustment in certain events. To determine the number of
shares issuable upon conversion of a Security, divide the principal amount to be
converted by the conversion price in effect on the conversion date. On
conversion, no payment or adjustment for interest will be made. However,
interest will be paid on any interest payment date with respect to Securities
surrendered for conversion after a record date for the payment of interest to
the registered holder on such record date. The Company will deliver a check for
any fractional share.
To convert a Security a holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the Security to a
Conversion Agent, (3) furnish appropriate endorsements and transfer documents if
required by the Registrar or Conversion Agent, and (4) pay any transfer or
similar tax if required. A holder may convert a portion of a Security if the
portion is $1,000 or an integral multiple of $1,000.
The conversion price is subject to adjustment as set forth in the
Indenture in certain events. No adjustment in the conversion price will be
required unless such adjustment would require a change of at least 1% in the
price then in effect; but any adjustment that would otherwise be required to be
made shall be carried forward and taken into account in any subsequent
adjustment.
The Company from time to time may voluntarily reduce the conversion
price for a period of time, provided that the conversion price is not less than
the par value of a share of Common Stock.
If the Company is a party to a consolidation or merger or a transfer or
lease of all or substantially all of its assets, the Securities automatically
become convertible into the kind and amount of securities, cash or other assets
which the Holder of a Security would have owned immediately after such
transaction if the Holder had converted the Security immediately before the
effective date of the transaction.
8. Subordination. The Securities are subordinated to Senior Debt,
as defined in the Indenture. To the extent provided in the Indenture, Senior
Debt must be paid before the
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Securities may be paid. The Company agrees, and each Securityholder by accepting
a Security agrees, to the subordination and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not exchange or register the transfer of any
Security or portion of a Security selected for redemption (except the unredeemed
portion of any Security being redeemed in part). Also, it need not exchange or
register the transfer of any Securities for a period of 15 days before a
selection of Securities to be redeemed.
10. Persons Deemed Owners. Except as provided in paragraph 2, the
registered holder of a Security may be treated as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Securities may be amended with the consent of the holders of at
least a majority in principal amount of the then outstanding Securities, and any
existing default may be waived with the consent of the holders of a majority in
principal amount of the then outstanding Securities. Without the consent of any
Securityholder, the Indenture or the Securities may be amended to cure any
ambiguity, defect or inconsistency, to provide for assumption of the Company's
obligations to Securityholders or to make any change that does not adversely
affect the rights of any Securityholder.
12. Defaults and Remedies. An Event of Default is: default for 30
days in payment of interest on the Securities; default in payment of principal
on them; failure by the Company for 30 days after notice to it to comply with
any of its other agreements in the Indenture or the Securities or, in the case
of failure by the Company to maintain its corporate existence or to comply with
the restrictions on consolidation, merger or transfer or lease of substantially
all its assets or the provisions regarding conversion of Securities, with such
notice but without such passage of time; certain defaults under and
accelerations prior to maturity of other indebtedness; certain final judgments
which remain undischarged; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the then outstanding Securities may declare all
the Securities to be due and payable immediately, except that in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Securities become due and payable without further action or notice.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, holders of a majority in principal amount of the then outstanding
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.
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00. Trustee Dealings with the Company. Subject to certain
limitations imposed by the TIA, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.
14. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
15. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Securityholder upon written request and without
charge a copy of the Indenture, which has in it the text of this Security in
larger type. Requests may be made to:
Treasurer, Excel Legacy Corporation
16955 Xxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
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ASSIGNMENT FORM
To Assign this Security, fill in the form below:
I or we assign and transfer this Security to
__________________
[__________________]
(Insert assignee's social security
or tax I.D. number)
_________________________
_________________________
_________________________
_________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint
_________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
_____
[_____]
To convert only part of this Security, state the amount ($1,000 or integral
multiples thereof):
__________________
[$___________]
If you want the stock certificate made out in another person's name, fill in the
form below:
__________________
[__________________]
(insert other person's social
security or tax I.D. number)
_________________________
_________________________
_________________________
_________________________
Print or type other person's name, address and zip code)
Date: ____________ Your Signature: ________________________
________________________
(Sign exactly as your name appears
on the other side of this Security)
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Exhibit B
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered
into as of _______, 1999 by Excel Legacy Corporation, a Delaware corporation
(the "Pledgor"), having its principal office at 16955 Xxx Xxx Xxxxx, Xxxxx 000,
Xxx Xxxxx, Xxxxxxxxxx, in favor of Norwest Bank Minnesota, National Association
(the "Debentures Collateral Agent"), having an office at Sixth & Marquette,
XXX-X0000-000, Xxxxxxxxxxx, Xxxxxxxxx, as collateral agent in favor of the
holders (the "Holders") of the Pledgor's 9.0% Convertible Redeemable
Subordinated Secured Debentures due 2004 (the "Debentures"). Capitalized terms
used and not defined herein shall have the meanings given to such terms in the
Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Pledgor is the legal and beneficial owner of
certain shares of common stock, par value $.0001 per share (the "Common Stock"),
of Price Enterprises, Inc., a Maryland corporation (the "Issuer");
WHEREAS, the Pledgor and Norwest Bank Minnesota, National
Association, as trustee, have entered into that certain indenture dated as of
_________, 1999 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Indenture"), pursuant to which the Pledgor
proposes to issue, from time to time, up to $_________ in aggregate principal
amount of the Debentures;
WHEREAS, the terms of the Indenture require that the Pledgor
(i) pledge to the Debentures Collateral Agent for the benefit of the Holders,
and grant to the Debentures Collateral Agent for the benefit of the Holders a
security interest in, the Debentures Pledged Collateral (as defined herein) and
(ii) execute and deliver this Agreement in order to secure the payment and
performance by the Pledgor of all of the Obligations of the Pledgor under the
Indenture and the Debentures (the "Obligations"); and
WHEREAS, the Pledgor and The Sol and Xxxxx Xxxxx Trust have
entered into that certain Note Purchase Agreement dated as of ________, 1999
(the "Price Note Purchase Agreement") pertaining to the Secured Promissory Note
(the "Price Note") issued thereunder, and the Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent") have entered a Pledge Agreement of even date
therewith (the "Price Note Pledge Agreement") pursuant to which Pledgor has
granted to the Price Note Collateral Agent, as collateral agent for the holders
of the Price Note, a security interest (the "Price Note Security Interest") in,
among other things, the Debentures Pledged Shares.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and the
mutual covenants hereinafter set forth, the parties hereto agree as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the Debentures
Collateral Agent for its benefit and for the ratable benefit of the Holders, and
grants to the Debentures Collateral Agent for the ratable benefit of the Holders
a continuing first priority security interest in, all of the Pledgor's right,
title and interest in the following (the "Debentures Pledged Collateral"):
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The shares of Common Stock (the "Debentures Pledged Shares")
from time to time identified on a certificate (a "Debentures
Collateral Identification Certificate") in the form attached
hereto as Exhibit A, and all products and proceeds of any of
the Debentures Pledged Shares, including, without limitation,
all dividends, cash, options, warrants, rights, instruments,
subscriptions and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Debentures Pledged Shares or
any of the foregoing
Each Debentures Collateral Identification Certificate (i) shall have
been completed to identify the principal amount of Debentures to be issued at
such time (for purposes of said Debentures Collateral Identification
Certificate, the "Incremental Debentures"), (ii) shall have been completed to
identify a number of Debentures Pledged Shares equal to 117.647 shares of Common
Stock for each $1,000 principal amount of Incremental Debentures (the
"Incremental Debentures Pledged Shares"), as well as the appropriate
certificate(s) evidencing the Incremental Debentures Pledged Shares, (iii) shall
have been duly executed by the Pledgor, and (iv) shall include an Acknowledgment
of Price Note Collateral Agent duly executed by the Price Note Collateral Agent.
The pledge and security interest made and granted in this Section 1 is
made and granted for the purpose of securing all of the Obligations under the
Indenture and the Debentures (including, without limitation, interest and any
other Obligations accruing after the date of any filing by the Pledgor of any
petition in bankruptcy or the commencement of any bankruptcy, insolvency or
similar proceeding with respect to the Pledgor).
The Pledgor agrees that it shall not be entitled to issue
Debentures at any time under the Indenture unless and until it shall have
provided to the Debentures Collateral Agent a Debentures Collateral
Identification Certificate (and the accompanying Incremental Debentures Pledged
Shares) in connection therewith.
SECTION 2. Delivery of Pledged Collateral. Pledgor hereby agrees that
all certificates or instruments representing or evidencing the Debentures
Pledged Collateral shall be immediately delivered to and held at all times by
the Debentures Collateral Agent pursuant hereto. All Debentures Pledged Shares
shall be in suitable form for transfer by delivery, or issued in the name of
Pledgor and accompanied by instruments of transfer or assignment duly executed
in blank and undated, and in either case having attached thereto all requisite
federal or state stock transfer tax stamps, all in form and substance
satisfactory to the Debentures Collateral Agent.
SECTION 3. Price Notes Security Interest. The Debentures Collateral
Agent acknowledges the security interest and pledge of the Debentures Pledged
Collateral pursuant to the Price Note Pledge Agreement. Until the earlier to
occur of the termination of this Agreement or the Price Note Pledge Agreement,
the Debentures Collateral Agent agrees to hold the Debentures Pledged Collateral
for itself and for the Price Note Collateral Agent, in order to perfect the
security interest in the Debentures Pledged Collateral for itself under this
Agreement and for the Price Note Collateral Agent under the Price Note Pledge
Agreement. The Debentures Collateral Agent shall not be required to hold, and
agrees that it will not hold, the Debentures Pledged Collateral for any person
other than the Holders and the Price Note Collateral Agent in order to perfect a
security interest in the Debentures Pledged Collateral.
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SECTION 4. Release.
(a) General. Subject to the receipt by the Debentures Collateral
Agent of a Release Certificate as described in Section 4(b) below, following the
repurchase, redemption or defeasance from time to time by the Pledgor of any or
all of the Debentures or the conversion of any or all of the Debentures into
Common Stock as provided by the Indenture (and upon receipt by the Debentures
Collateral Agent of evidence reasonably satisfactory to it of the principal
amount of Debentures so repurchased, redeemed, defeased or converted and subject
to the satisfaction of any additional applicable conditions set forth in the
Indenture, including the furnishing of a certificate of the Trustee to the
Debentures Collateral Agent as required by Section 12.07 of the Indenture), the
Debentures Collateral Agent shall release from the pledge and security interest
created by Section 1 of this Agreement a number of Debentures Pledged Shares
equal to 117.647 Debentures Pledged Shares for each $1,000 in principal amount
of Debentures subject to such repurchase, redemption, defeasance or conversion.
In connection with such release, the Debentures Collateral Agent also shall take
such steps as the Pledgor reasonably may request in order to evidence the
termination of said pledge and security interest in the Debentures Pledged
Shares so released. Any shares released pursuant to this Section 4 shall no
longer be deemed to be "Debentures Pledged Shares" or "Debentures Pledged
Collateral" for purposes of this Agreement.
(b) Release Certificate. The Debentures Collateral Agent shall not
release any Debentures Pledged Shares unless and until the Pledgor shall have
provided to the Debentures Collateral Agent a Release Certificate and
accompanying Acknowledgment of Price Note Collateral Agent in the form attached
hereto as Exhibit B duly executed by each of the Pledgor and the Price Note
Collateral Agent. The Release Certificate shall indicate whether all obligations
owed by Pledgor under the Price Note and the Price Note Purchase Agreement have
been satisfied in full, the amount of Debentures Pledged Shares to be released
and the party to whom such shares shall be delivered. Any Debentures Pledged
Shares required to be released pursuant to Section 4(a) of this Agreement or
upon the termination of this Agreement shall be released and delivered by the
Debentures Collateral Agent in accordance with the instructions contained in an
applicable Release Certificate.
For purposes of this Agreement, any reference to a Release Certificate
shall be deemed to include an accompanying Acknowledgment of Price Note
Collateral Agent, unless no such acknowledgment is required as provided by the
following sentence. From and after the date the Price Notes Collateral Agent
provides to the Debentures Collateral Agent a Payment Certificate in the form
attached hereto as Exhibit C, which certificate shall indicate that all
obligations of the Pledgor under the Price Note and the Price Note Purchase
Agreement have been satisfied in full, then any Release Certificate provided by
the Pledgor to the Debentures Collateral Agent need not be accompanied by an
Acknowledgment of Price Note Collateral Agent.
SECTION 5. Representations and Warranties. The Pledgor hereby makes all
representations and warranties applicable to the Pledgor contained in the
Indenture. The Pledgor further represents and warrants that:
(a) The Pledgor is the legal, record and beneficial owner of the
Debentures Pledged Collateral, free and clear of any Lien or claims of any
person other than the security interest created under this Agreement and the
Price Note Security Interest.
(b) This Agreement has been duly executed and delivered by the
Pledgor and constitutes a legal, valid and binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms.
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(c) Upon (i) the delivery to the Debentures Collateral Agent of
the Debentures Pledged Collateral, and (ii) the filing of Uniform Commercial
Code (the "UCC") financing statements in the Secretary of State's office for the
State of California referencing Pledgor as debtor thereunder, the Debentures
Collateral Agent (as agent for the Holders) as the secured party thereunder, and
the Debentures Pledged Collateral as the collateral thereunder, the pledge of
the Debentures Pledged Collateral pursuant to this Agreement shall create a
valid and perfected security interest in the Debentures Pledged Collateral,
securing the payment of the Obligations for the benefit of the Debentures
Collateral Agent and the Holders, and enforceable as such against all creditors
of the Pledgor and any persons purporting to purchase any of the Debentures
Pledged Collateral from the Pledgor.
(d) Upon (i) the delivery to the Debentures Collateral Agent of
the Debentures Pledged Collateral, the delivery to the Senior Notes Collateral
Agent (as defined in the Price Note Pledge Agreement) of the Senior Notes
Pledged Collateral (as defined in the Price Note Pledge Agreement) and the
delivery to the Price Note Collateral Agent of the Price Note Pledged Collateral
(as defined in the Price Note Pledge Agreement) other than the Debentures
Pledged Collateral and the Senior Notes Pledged Collateral, and (ii) the filing
of UCC financing statements in the Secretary of State's office for the State of
California referencing Pledgor as debtor thereunder, the Price Note Collateral
Agent (as agent for the holders of the Price Note) as the secured party
thereunder, and the Price Note Pledged Collateral as the collateral thereunder,
the pledge of the Price Note Pledged Collateral (which includes the Debentures
Pledged Collateral and the Senior Notes Pledged Collateral) pursuant to the
Price Note Pledge Agreement shall create a valid and perfected security interest
in the Debentures Pledged Collateral, securing the payment of the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement for the
benefit of the Price Note Collateral Agent and the holders of the Price Note,
and enforceable as such against all creditors of the Pledgor and any persons
purporting to purchase any of the Price Note Pledged Collateral from the Pledgor
SECTION 6. Further Assurance. Pledgor will at all times cause the
security interests granted pursuant to this Agreement to constitute valid
perfected security interests in the Debentures Pledged Collateral, enforceable
as such against all creditors of Pledgor and (except as otherwise specifically
provided herein) any persons purporting to purchase any Debentures Pledged
Collateral from Pledgor. The Pledgor will, promptly upon request by the
Debentures Collateral Agent, execute and deliver or cause to be executed and
delivered, or use its best efforts to procure, all substitute stock
certificates, stock powers, proxies, tax stamps, assignments, instruments and
other documents, all in form and substance satisfactory to the Debentures
Collateral Agent, deliver any instruments to the Debentures Collateral Agent and
take any other actions that are necessary or, in the reasonable opinion of the
Debentures Collateral Agent, desirable to perfect, continue the perfection of,
or protect the first priority of the Debentures Collateral Agent's security
interest in, the Debentures Pledged Collateral, to protect the Debentures
Pledged Collateral against the rights, claims, or interests of third persons, to
enable the Debentures Collateral Agent to exercise or enforce its rights and
remedies hereunder, or otherwise to effect the purposes of this Agreement. The
Pledgor also hereby authorizes the Debentures Collateral Agent to file any
financing or continuation statements with respect to the Debentures Pledged
Collateral without the signature of the Pledgor to the extent permitted by
applicable law. The Pledgor will pay all costs incurred in connection with any
of the foregoing.
SECTION 7. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Debentures Pledged
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Shares or any part thereof for any purpose not inconsistent with the terms of
this Agreement or the Indenture; provided, however, that the Pledgor shall not
exercise or shall refrain from exercising any such right if such action would
have a material adverse effect on the value of the Debentures Pledged Collateral
or any part thereof or be inconsistent with or violate any provisions of this
Agreement or the Indenture.
(b) So long as no Event of Default shall have occurred and be
continuing, and subject to the other terms and conditions of the Indenture, the
Pledgor shall be entitled to receive, and to utilize (subject to the provisions
of the Indenture) free and clear of the Lien of this Agreement, all cash
dividends paid from time to time in respect of the Debentures Pledged Shares
(other than the dividends described in Section 7(c)(ii) below).
(c) Any and all (i) dividends, other distributions, interest and
principal payments paid or payable in the form of instruments and/or other
property (other than cash dividends permitted under Section 7(b) hereof)
received, receivable or otherwise distributed in respect of, or in exchange for,
any Debentures Pledged Collateral, (ii) dividends and other distributions paid
or payable in cash in respect of any Debentures Pledged Shares in connection
with a partial or total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in-surplus, and (iii) cash paid,
payable or otherwise distributed in redemption of, or in exchange for, any
Debentures Pledged Collateral, shall in each case be forthwith delivered to the
Debentures Collateral Agent to hold as Debentures Pledged Collateral and shall,
if received by the Pledgor, be received in trust for the benefit of the
Debentures Collateral Agent and the Holders, be segregated from the other
property and funds of the Pledgor and be forthwith delivered to the Debentures
Collateral Agent as Debentures Pledged Collateral in the same form as so
received (with any necessary endorsements).
(d) The Debentures Collateral Agent shall execute and deliver (or
cause to be executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of enabling
the Pledgor to exercise the voting and other rights that it is entitled to
exercise pursuant to Sections 7(a) and 7(b) above.
(e) Upon the occurrence and during the continuance of an Event of
Default, (i) all rights of the Pledgor to exercise the voting and other
consensual rights that it would otherwise be entitled to exercise pursuant to
Section 7(a) shall cease, and all such rights shall thereupon become vested in
the Debentures Collateral Agent, which, to the extent permitted by law, shall
thereupon have the sole right to exercise such voting and other consensual
rights, and (ii) all dividends payable in respect of the Debentures Pledged
Collateral shall be paid to the Debentures Collateral Agent and the Pledgor's
right to receive such cash payments pursuant to Sections 7(b) hereof shall
immediately cease.
(f) Upon the occurrence and during the continuance of an Event of
Default, the Pledgor shall execute and deliver (or cause to be executed and
delivered) to the Debentures Collateral Agent all such proxies, dividend and
interest payment orders and other instruments as the Debentures Collateral Agent
may reasonably request for the purpose of enabling the Debentures Collateral
Agent to exercise the voting and other rights that it is entitled to exercise
pursuant to Section 7(e) above.
(g) All payments of interest, principal or premium and all
dividends and other distributions that are received by the Pledgor contrary to
the provisions of this Section 7 shall be received in trust for the benefit of
the Debentures Collateral Agent and the Holders, shall be segregated from the
other property or funds of the Pledgor and shall be forthwith delivered to the
Debentures Collateral Agent as Debentures Pledged Collateral in the same form as
so received (with any necessary endorsements).
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SECTION 8. Covenants. The Pledgor hereby covenants and agrees with the
Debentures Collateral Agent and the Holders that it will comply with all of the
obligations, requirements and restrictions applicable to the Pledgor contained
in the Indenture. The Pledgor further covenants and agrees, from and after the
date of this Agreement and until the Obligations have been paid in full, that it
will not (i) sell, assign, transfer, convey or otherwise dispose of, or grant
any option or warrant with respect to, any of the Debentures Pledged Collateral
without the prior written consent of the Debentures Collateral Agent, (ii)
create or permit to exist any Lien upon or with respect to any of the Debentures
Pledged Collateral, other than the security interest granted under this
Agreement and the Price Note Security Interest, and Pledgor at all times will be
the sole beneficial owner of the Debentures Pledged Collateral, (iii) other than
the Price Note Pledge Agreement, enter into any agreement or understanding that
purports to or that may restrict or inhibit the Debentures Collateral Agent's
rights or remedies hereunder, including, without limitation, the Debentures
Collateral Agent's right to sell or otherwise dispose of the Debentures Pledged
Collateral, or (iv) fail to pay or discharge any tax, assessment or levy of any
nature not later than five days prior to the date of any proposed sale under any
judgement, writ or warrant of attachment with regard to the Debentures Pledged
Collateral.
SECTION 9. Power of Attorney. In addition to all of the powers granted
to the Debentures Collateral Agent pursuant to Section 12.06 of the Indenture,
the Pledgor hereby appoints and constitutes the Debentures Collateral Agent as
the Pledgor's attorney-in-fact to exercise all of the following powers upon and
at any time after the occurrence of an Event of Default: (i) collection of
proceeds of any Debentures Pledged Collateral; (ii) conveyance of any item of
Debentures Pledged Collateral to any purchaser thereof; (iii) giving of any
notices or recording of any Liens under Section 6 hereof; (iv) making of any
payments or taking any acts under Section 10 hereof and (v) paying or
discharging taxes or Liens levied or placed upon or threatened against the
Debentures Pledged Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the Debentures Collateral
Agent in its sole discretion, and such payments made by the Debentures
Collateral Agent to become the obligations of the Pledgor to the Debentures
Collateral Agent, due and payable immediately without demand. The Debentures
Collateral Agent's authority hereunder shall include, without limitation, the
authority to endorse and negotiate, for the Debentures Collateral Agent's own
account, any checks or instruments in the name of the Pledgor, execute and give
receipt for any certificate of ownership or any document, transfer title to any
item of Debentures Pledged Collateral, sign the Pledgor's name on all financing
statements or any other documents deemed necessary or appropriate to preserve,
protect or perfect the security interest in the Debentures Pledged Collateral
and to file the same, prepare, file and sign the Pledgor's name on any notice of
Lien, and prepare, file and sign the Pledgor's name on a proof of claim in
bankruptcy or similar document against any customer of the Pledgor, and to take
any other actions arising from or incident to the powers granted to the
Debentures Collateral Agent in this Agreement. This power of attorney is coupled
with an interest and is irrevocable by the Pledgor.
SECTION 10. Collateral Agent May Perform. If the Pledgor fails to
perform any agreement contained herein, the Debentures Collateral Agent may
itself perform, or cause performance of, such agreement, and the reasonable
expenses of the Debentures Collateral Agent incurred in connection therewith
shall be payable by the Pledgor under Section 15 hereof.
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SECTION 11. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Debentures Collateral Agent hereunder are being granted in
order to preserve and protect the Debentures Collateral Agent's and the Holders'
security interest in and to the Debentures Pledged Collateral granted hereby and
shall not be interpreted to, and shall not, impose any duties on the Debentures
Collateral Agent in connection therewith. Further, the rights and powers granted
to the Debentures Collateral Agent hereunder are being granted in order to
permit the Debentures Collateral Agent to hold the Debentures Pledged Collateral
for the Price Note Collateral Agent, in order to perfect the security interest
in the Debentures Pledged Collateral for the Price Note Collateral Agent under
the Price Note Pledge Agreement. The Debentures Collateral Agent shall be deemed
to have exercised reasonable care in the custody and preservation of the
Debentures Pledged Collateral in its possession if the Debentures Pledged
Collateral is accorded treatment substantially equal to that which the
Debentures Collateral Agent accords its own property, it being understood that
the Debentures Collateral Agent shall not have any responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Debentures Pledged
Collateral, whether or not the Debentures Collateral Agent has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against any parties with respect to any Debentures Pledged Collateral.
SECTION 12. Subsequent Changes Affecting Collateral. The Pledgor
represents to the Debentures Collateral Agent and the Holders that the Pledgor
has made its own arrangements for keeping informed of changes or potential
changes affecting the Debentures Pledged Collateral (including, but not limited
to, rights to convert, rights to subscribe, payment of dividends, payments of
interest and/or principal, reorganization or other exchanges, tender offers and
voting rights), and the Pledgor agrees that the Debentures Collateral Agent and
the Holders shall have no responsibility or liability for informing the Pledgor
of any such changes or potential changes or for taking any action or omitting to
take any action with respect thereto. The Pledgor covenants that it will not,
without the prior written consent of the Debentures Collateral Agent, vote to
enable, or take any other action to permit, the Issuer to sell or otherwise
dispose of, or grant any option with respect to, any of the Debentures Pledged
Collateral or create or permit to exist any Lien upon or with respect to any of
the Debentures Pledged Collateral (except that the Pledgor may create and permit
to exist the Price Note Security Interest in accordance with Section 3 of this
Agreement). The Pledgor will defend the right, title and interest of the
Debentures Collateral Agent and the Holders in and to the Debentures Pledged
Collateral against the claims and demands of all persons.
SECTION 13. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing, the Debentures Collateral Agent and the Holders
shall have, in addition to all other rights given by law or by this Agreement or
the Indenture, all of the rights and remedies with respect to the Debentures
Pledged Collateral of a secured party under the UCC as in effect in the State of
New York at that time. The Debentures Collateral Agent may, without notice and
at its option, transfer or register, and the Pledgor shall register or cause to
be registered upon request therefor by the Debentures Collateral Agent, the
Debentures Pledged Collateral or any part thereof on the books of the Issuer
into the name of the Debentures Collateral Agent or the Debentures Collateral
Agent's nominee(s), with or without any indication that such Debentures Pledged
Collateral is subject to the security interest hereunder. In addition, (i) with
respect to any Debentures Pledged Collateral that shall then be in or shall
thereafter come into the possession or custody of the Debentures Collateral
Agent, the Debentures Collateral Agent may sell or cause the same to be sold at
any broker's board or at public or private sale, in one or more sales or lots,
at such price or prices as the Debentures Collateral Agent may deem best, for
cash or on credit or for future delivery, without assumption of any credit risk,
and (ii) with respect to any Debentures Pledged Collateral that shall be in or
shall thereafter come into the possession or custody of the Price Note
Collateral Agent, the Debentures Collateral Agent may instruct and otherwise
work with the Price Note Collateral Agent to
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sell or cause the same to be sold at any broker's board or at public or private
sale, in one or more sales or lots, at such price or prices as the Debentures
Collateral Agent may deem best, for cash or on credit or for future delivery,
without assumption of any credit risk. The purchaser of any or all Debentures
Pledged Collateral so sold shall thereafter hold the same absolutely, free from
any claim, encumbrance or right of any kind whatsoever (except that with respect
to any such collateral consisting of Price Note Pledged Collateral, the
Debentures Collateral Agent may instruct or otherwise work with the Price Note
Collateral Agent to sell such collateral subject to Liens in favor of the
Debentures Collateral Agent). Unless any of the Debentures Pledged Collateral
threatens to decline speedily in value or is or becomes of a type sold on a
recognized market, the Debentures Collateral Agent will give Pledgor reasonable
notice of the time and place of any public sale thereof, or of the time after
which any private sale or other intended disposition is to be made. Any sale of
the Debentures Pledged Collateral conducted in conformity with reasonable
commercial practices of banks, insurance companies, commercial finance
companies, or other financial institutions disposing of property similar to the
Debentures Pledged Collateral shall be deemed to be commercially reasonable. Any
requirements of reasonable notice shall be met if such notice is mailed to the
Pledgor as provided below in Section 19.1, at least ten days before the time of
the sale or disposition. Any other requirement of notice, demand or
advertisement for sale is, to the extent permitted by law, waived. The
Debentures Collateral Agent or any Holder may, in its own name or in the name of
a designee or nominee, buy any of the Debentures Pledged Collateral at any
public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees and
disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Debentures Pledged Collateral.
SECTION 14. Irrevocable Authorization and Instruction to the Issuer.
The Pledgor hereby authorizes and instructs the Issuer to comply with any
instruction received by the Issuer from the Debentures Collateral Agent that (i)
states that an Event of Default has occurred and (ii) is otherwise in accordance
with the terms of this Agreement, without any other or further instructions from
the Pledgor, and the Pledgor agrees that the Issuer shall be fully protected in
so complying.
SECTION 15. Fees and Expenses. The Pledgor will upon demand pay to the
Debentures Collateral Agent the amount of any and all reasonable fees and
expenses (including, without limitation, the reasonable fees and disbursements
of its counsel, of any investment banking firm, business broker or other selling
agent and of any other experts and agents retained by the Debentures Collateral
Agent) that the Debentures Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Debentures
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
the Debentures Collateral Agent and the Holders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
SECTION 16. Interest Absolute. All rights of the Debentures Collateral
Agent and the Holders and the security interests created hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture;
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(c) any exchange, surrender, release or non-perfection of any
other collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor in respect of the
Obligations or of this Agreement.
SECTION 17. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Debentures Pledged Collateral and any
cash held shall be applied by the Debentures Collateral Agent in the following
order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Debentures
Collateral Agent, and all expenses, liabilities and advances incurred or made by
the Debentures Collateral Agent in connection therewith, and any other
unreimbursed fees and expenses for which the Debentures Collateral Agent is to
be reimbursed pursuant to Section 15 hereof;
second, to the ratable payment (based on the principal amount of
Debentures deemed by the Indenture to be outstanding at the time of
distribution) of accrued but unpaid interest on such outstanding Debentures;
third, to the ratable payment (based on the principal amount of
Debentures deemed by the Indenture to be outstanding at the time of
distribution) of unpaid principal of such outstanding Debentures;
fourth, to the ratable payment (based on the principal amount of
Debentures deemed by the Indenture to be outstanding at the time of
distribution) of all other Obligations, until all Obligations shall have been
paid in full; and
fifth, to the payment to all persons who may be entitled by law thereto
(including, without limitation, the Price Note Collateral Agent until such time
as the Debentures Collateral Agent has received written notice from the Price
Note Collateral Agent that the obligations of the Pledgor under the Price Note
and the Price Note Purchase Agreement have been satisfied in full), or as a
court of competent jurisdiction may direct, until all obligations to such
persons shall have been paid in full; and
finally, to payment to the Pledgor or its successors or assigns, or as
a court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 18. Uncertificated Securities. Notwithstanding anything to the
contrary contained herein, if any Debentures Pledged Shares (whether now owned
or hereafter acquired) are uncertificated Debentures Pledged Shares, the Pledgor
shall promptly notify the Debentures Collateral Agent, and shall promptly take
all actions required to perfect the security interest of the Debentures
Collateral Agent under applicable law. The Pledgor further agrees to take such
actions as the Debentures Collateral Agent deems necessary or desirable to
effect the foregoing and to permit the Debentures Collateral Agent to exercise
any of its rights and remedies hereunder, and agrees to provide an Opinion of
Counsel reasonably satisfactory to the Debentures Collateral Agent with respect
to any such pledge of uncertificated Debentures Pledged Shares promptly upon
request of the Debentures Collateral Agent.
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SECTION 19. Miscellaneous Provisions.
Section 19.1. Notices. All notices, approvals, consents or
other communications required or desired to be given hereunder shall be in the
form and manner as set forth in Section 13.02 of the Indenture, and delivered to
the addresses set forth in such Section, or, in the case of the Debentures
Collateral Agent, to: Norwest Bank Minnesota, National Association, Sixth &
Marquette, XXX-X0000-000, Xxxxxxxxxxx, Xxxxxxxxx, Attention: Corporate Trust
Services, Telecopy No. (000) 000-0000.
Section 19.2. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Pledgor to the Debentures
Collateral Agent to take any action or omit to take any action under this
Agreement, the Pledgor shall deliver to the Debentures Collateral Agent an
Officer's Certificate and/or an Opinion of Counsel in accordance with the
requirements of Section 13.04 of the Indenture.
Section 19.3. No Adverse Interpretation of Other Agreements.
This Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor, the Issuer or any subsidiary thereof. No such pledge,
security or debt agreement may be used to interpret this Agreement.
Section 19.4. Severability. The provisions of this Agreement
are severable, and if any clause or provision shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
Section 19.5. No Recourse Against Others. No director,
officer, employee, stockholder or affiliate, as such, of the Pledgor or the
Issuer shall have any liability for any obligations of the Pledgor under this
Agreement or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder, by accepting a Debenture, waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Debentures.
Section 19.6. Headings. The headings of the Sections of this
Agreement 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 19.7. Counterpart Originals. This Agreement may be
signed in two or more counterparts. Each signed copy shall be an original, but
all of them together represent one and the same agreement. Each counterpart may
be executed and delivered by telecopy, if such delivery is promptly followed by
the original manually signed copy sent by overnight courier.
Section 19.8. Benefits of Agreement. Nothing in this
Agreement, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Agreement. The parties hereto
acknowledge that the Price Note Collateral Agent is entitled to rely on any
Debentures Collateral Identification Certificate which may be delivered under
this Agreement.
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Section 19.9. Amendments, Waivers and Consents. Any amendment
or waiver of any provision of this Agreement and any consent to any departure by
the Pledgor from any provision of this Agreement shall be effective only if made
or given in compliance with all of the terms and provisions of the Indenture
necessary for amendments or waivers of, or consents to any departure by the
Pledgor from any provision of the Indenture, as applicable; provided, however,
that no amendment or waiver of any provision of this Agreement may adversely
affect the rights of the Price Note Collateral Agent hereunder or under the
Acknowledgment of Debentures Collateral Agent included within any Debentures
Collateral Identification Certificate delivered pursuant to this Agreement
without the prior written consent of the Price Note Collateral Agent. Neither
the Debentures Collateral Agent nor any Holder shall be deemed, by any act,
delay, indulgence, omission or otherwise, to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. Failure of the Debentures
Collateral Agent or any Holder to exercise, or delay in exercising, any right,
power or privilege hereunder shall not operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Debentures Collateral Agent or any Holder of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that the Debentures Collateral Agent or such Holder would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.
Section 19.10. Interpretation of Agreement. Time is of the
essence in each provision of this Agreement of which time is an element. All
terms not defined herein or in the Indenture shall have the meaning set forth in
the applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture and is not
dealt with herein with more specificity, the Indenture shall control with
respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
Section 19.11. Continuing Security Interest; Transfer of
Debentures. This Agreement shall create a continuing security interest in the
Debentures Pledged Collateral and shall (i) remain in full force and effect
until the payment in full of all the Obligations and all the fees and expenses
owing to the Debentures Collateral Agent and the fulfillment of the conditions
set forth in Section 19.17, (ii) be binding upon the Pledgor, its successors and
assigns, and (iii) inure, together with the rights and remedies of the
Debentures Collateral Agent hereunder, to the benefit of the Debentures
Collateral Agent, the Holders and their respective successors, transferees and
assigns.
Section 19.12. Reinstatement. This Agreement shall continue to
be effective or be reinstated if at any time any amount received by the
Debentures Collateral Agent or any Holder in respect of the Obligations is
rescinded or must otherwise be restored or returned by the Debentures Collateral
Agent or any Holder upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Pledgor or upon the appointment of any receiver,
intervenor, conservator, trustee or similar official for the Pledgor or any
substantial part of its assets, or otherwise, all as though such payments had
not been made.
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Section 19.13. Survival of Provisions. All representations,
warranties and covenants of the Pledgor contained herein shall survive the
execution and delivery of this Agreement, and shall terminate only upon the full
and final payment and performance by the Pledgor of the Obligations and the
fulfillment of the conditions set forth in Section 19.17.
Section 19.14. Waivers. The Pledgor waives presentment and
demand for payment of any of the Obligations, protest and notice of dishonor or
default with respect to any of the Obligations, and all other notices to which
the Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
Section 19.15. Authority of the Collateral Agent.
(a) The Debentures Collateral Agent shall have and be
entitled to exercise all powers hereunder that are specifically granted
to the Debentures Collateral Agent by the terms hereof, together with
such powers as are reasonably incident thereto. The Debentures
Collateral Agent may perform any of its duties hereunder or in
connection with the Debentures Pledged Collateral by or through agents
or employees and shall be entitled to retain counsel and to act in
reliance upon the advice of counsel concerning all such matters.
Neither the Debentures Collateral Agent nor any director, officer,
employee, attorney or agent of the Debentures Collateral Agent shall be
responsible for the validity, effectiveness or sufficiency hereof or of
any document or security furnished pursuant hereto. The Debentures
Collateral Agent and its directors, officers, employees, attorneys and
agents shall be entitled to rely on any communication, instrument or
document believed by it or them to be genuine and correct and to have
been signed or sent by the proper person or persons. The Pledgor agrees
to indemnify and hold harmless the Debentures Collateral Agent, the
Holders and any other person from and against any and all costs,
expenses (including the reasonable fees and disbursements of counsel
(including, the allocated costs of inside counsel)), claims and
liabilities incurred by the Debentures Collateral Agent, the Holders or
such person hereunder, unless such claim or liability shall be due to
willful misconduct or gross negligence on the part of the Debentures
Collateral Agent, the Holders or such person.
(b) The Pledgor acknowledges that the rights and
responsibilities of the Debentures Collateral Agent under this
Agreement with respect to any action taken by the Debentures Collateral
Agent or the exercise or non-exercise by the Debentures Collateral
Agent of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement
shall, as between the Debentures Collateral Agent and the Holders, be
governed by the Indenture and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Debentures Collateral Agent and the Pledgor, the Debentures Collateral
Agent shall be conclusively presumed to be acting as agent for the
Holders with full and valid authority so to act or refrain from acting,
and the Pledgor shall not be obligated or entitled to make any inquiry
respecting such authority.
Section 19.16. Resignation or Removal of the Collateral Agent.
Until such time as the Obligations shall have been paid in full, the Debentures
Collateral Agent may at any time, by giving written notice to the Pledgor and
Holders, resign and be discharged of the responsibilities hereby created, such
resignation to become effective upon (i) the appointment of a successor
Debentures Collateral Agent and (ii) the acceptance of such appointment by such
successor Debentures Collateral Agent. As promptly as practicable after the
giving of any such notice, the Holders shall appoint a successor Debentures
Collateral Agent, which successor Debentures Collateral Agent shall be
reasonably acceptable to the Pledgor. If no successor Debentures Collateral
Agent shall be appointed and shall have accepted such appointment within
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90 days after the Debentures Collateral Agent gives the aforesaid notice of
resignation, the Debentures Collateral Agent may apply to any court of competent
jurisdiction to appoint a successor Debentures Collateral Agent to act until
such time, if any, as a successor shall have been appointed as provided in this
Section 19.16. Any successor so appointed by such court shall immediately and
without further act be superseded by any successor Debentures Collateral Agent
appointed by the Holders, as provided in this Section 19.16. Simultaneously with
its replacement as Debentures Collateral Agent hereunder, the Debentures
Collateral Agent so replaced shall deliver to its successor all documents,
instruments, certificates and other items of whatever kind (including, without
limitation, the certificates and instruments evidencing the Debentures Pledged
Collateral and all instruments of transfer or assignment) held by it pursuant to
the terms hereof. The Debentures Collateral Agent that has resigned shall be
entitled to fees, costs and expenses to the extent incurred or arising, or
relating to events occurring, before its resignation or removal.
Section 19.17. Release; Termination of Agreement. Subject to
the provisions of Section 19.12 hereof and the penultimate sentence of this
Section 19.17, this Agreement shall terminate (i) upon full and final payment
and performance of the Obligations (and upon receipt by the Debentures
Collateral Agent of the Pledgor's written certification that all such
Obligations have been satisfied, the Trustee's written certification as required
by Section 12.05 of the Indenture, and such other evidence reasonably
satisfactory to the Debentures Collateral Agent that such Obligations have been
satisfied, and the satisfaction of any additional applicable conditions set
forth in the Indenture) and payment in full of all fees and expenses owing by
the Pledgor to the Debentures Collateral Agent or (ii) on the day after the
first anniversary of the defeasance of all of the Obligations pursuant to
Article 8 of the Indenture (other than those surviving Obligations specified
therein). At such time, the Debentures Collateral Agent shall upon receipt of a
Release Certificate as provided for by Section 4(b) above, reassign and
redeliver all of the Debentures Pledged Collateral hereunder that has not been
sold, disposed of, retained or applied by the Debentures Collateral Agent in
accordance with the terms of such Release Certificate. Notwithstanding anything
in this Agreement to the contrary, this Agreement shall not terminate unless and
until a Release Certificate is provided to the Debentures Collateral Agent as
provided above. Such reassignment and redelivery shall be without warranty by or
recourse to the Debentures Collateral Agent, except as to the absence of any
prior assignments by the Debentures Collateral Agent of its interest in the
Debentures Pledged Collateral, and shall be at the expense of the Pledgor.
Section 19.18. Final Expression. This Agreement, together with
any other agreement executed in connection herewith, is intended by the parties
as a final expression of their Agreement and is intended as a complete and
exclusive statement of the terms and conditions thereof.
Section 19.19. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial; Waiver of Damages.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
UNDER THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE PLEDGOR, THE DEBENTURES COLLATERAL AGENT AND THE HOLDERS IN
CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
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(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN
PARAGRAPH (vi) BELOW, THE PLEDGOR, THE DEBENTURES COLLATERAL AGENT AND THE
HOLDERS AGREE THAT ALL DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY,
OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT THE PLEDGOR, THE DEBENTURES COLLATERAL AGENT AND THE HOLDERS
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE PLEDGOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(iii) THE PLEDGOR AGREES THAT THE DEBENTURES COLLATERAL
AGENT SHALL, IN ITS OWN NAME OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE
THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE
DEBENTURES PLEDGED COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN
GOOD FAITH TO ENABLE THE DEBENTURES COLLATERAL AGENT TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE
DEBENTURES COLLATERAL AGENT. THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE DEBENTURES COLLATERAL
AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
IN FAVOR OF THE DEBENTURES COLLATERAL AGENT. THE PLEDGOR WAIVES ANY OBJECTION
THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE DEBENTURES COLLATERAL
AGENT HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS.
(iv) THE PLEDGOR, THE DEBENTURES COLLATERAL AGENT AND THE
HOLDERS EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) THE PLEDGOR HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PLEDGOR AT ITS ADDRESS SET FORTH IN SECTION 13.02 OF THE
INDENTURE, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH
MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
DEBENTURES COLLATERAL AGENT OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE PLEDGOR IN ANY OTHER JURISDICTION.
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(vii) THE PLEDGOR HEREBY AGREES THAT NEITHER THE DEBENTURES
COLLATERAL AGENT NOR ANY HOLDER SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS
CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY
A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE DEBENTURES
COLLATERAL AGENT OR SUCH HOLDER, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE
RESULT OF ACTS OR OMISSIONS ON THE PART OF THE DEBENTURES COLLATERAL AGENT OR
SUCH HOLDER, AS THE CASE MAY BE, CONSTITUTING GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(viii) THE PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND HEARING
OF ANY KIND PRIOR TO THE EXERCISE BY THE DEBENTURES COLLATERAL AGENT OR ANY
HOLDER OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS
THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. THE PLEDGOR WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF THE DEBENTURES COLLATERAL AGENT OR ANY HOLDER
IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS,
TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE DEBENTURES
COLLATERAL AGENT OR ANY HOLDER, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION THIS AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR, THE DEBENTURES COLLATERAL AGENT
AND THE HOLDERS.
Section 19.20. Acknowledgments. The Pledgor hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement;
(b) neither the Debentures Collateral Agent nor any
Holder has any fiduciary relationship to the Pledgor, and the
relationship between the Debentures Collateral Agent and the Holders,
on the one hand, and the Pledgor, on the other hand, is solely that of
a secured party and a creditor; and
(c) no joint venture exists among the Holders or among
the Pledgor and the Holders.
[Signature Page Follows]
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[Pledge Agreement Signature Page]
PLEDGOR:
EXCEL LEGACY CORPORATION
a Delaware corporation
By:_____________________________________
Name:
Title:
DEBENTURES COLLATERAL AGENT:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:_____________________________________
Name:
Title:
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EXHIBIT A
[FORM OF DEBENTURES COLLATERAL IDENTIFICATION CERTIFICATE]
This Certificate is provided by Excel Legacy Corporation, a Delaware
corporation (the "Pledgor"), pursuant to:
(i) that certain Pledge Agreement (the "Debentures Pledge
Agreement") dated as of _______, 1999 by and between Pledgor and Norwest Bank
Minnesota, National Association (the "Debentures Collateral Agent"), pursuant to
which Pledgor has granted to the Debentures Collateral Agent, as collateral
agent for the holders of the Pledgor's 9.0% Convertible Redeemable Subordinated
Secured Debentures due 2004 (the "Debentures") issued pursuant to an Indenture
(the "Debentures Indenture") dated as of _______, 1999 by and between Pledgor
and the Debentures Collateral Agent, a security interest (the "Debentures
Security Interest") in certain property of the Pledgor (the "Debentures Pledged
Collateral"), including certain shares (the "Debentures Pledged Shares") of the
common stock, par value $.0001 per share of Price Enterprises Inc., a Maryland
corporation ("the Common Stock"), in order to secure the obligations of the
Pledgor under the Debentures Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge
Agreement") dated as of _________, 1999 by and between Pledgor and Xxxxx X.
Xxxxxx (the "Price Note Collateral Agent"), pursuant to which the Pledgor has
granted to the Price Note Collateral Agent, as collateral agent in favor of the
holders of the Pledgor's Secured Promissory Notes (the "Price Note") issued
pursuant to that certain Note Purchase Agreement by and between the Pledgor and
The Sol and Xxxxx Xxxxx Trust dated as of _______, 1999 (the "Price Note
Purchase Agreement"), a security interest in certain property of the Pledgor
(the "Price Note Pledged Collateral"), including all of the shares of Common
Stock of Price Enterprises, Inc. (the "Price Note Pledged Shares"), in order to
secure the obligations of the Pledgor under the Price Note and the Price Note
Purchase Agreement.
Pledgor hereby certifies and confirms to the Debentures Collateral
Agent and the Price Note Collateral Agent as follows:
(a) Concurrently herewith, Pledgor is issuing $_______ principal
amount of Debentures in accordance with the Debentures Indenture (for purposes
of this Certificate, the "Incremental Debentures");
(b) In accordance with Section 3 of the Debentures Pledge
Agreement and Section 3(a) of the Price Note Pledge Agreement, Pledgor confirms
that the property identified on Schedule 1 hereto constitutes Incremental
Debentures Pledged Shares pledged to the Debentures Collateral Agent, and that
such Incremental Debentures Pledged Shares, together with any Incremental
Debentures Pledged Shares identified in any previous Debentures Collateral
Identification Certificate, constitute "Debentures Pledged Shares" for purposes
of the Debentures Pledge Agreement and the Price Note Pledge Agreement.
(c) The Pledgor consents to the agreements of the Debentures
Collateral Agent and the Price Note Collateral Agent confirmed below in this
Certificate, and the Pledgor waives any right to object to the performance of
any of said agreements.
75
(d) Pledgor acknowledges and agrees that the Debentures Collateral
Agent and the Price Note Collateral Agent shall rely upon the foregoing
certifications in taking actions under the Debentures Pledge Agreement and the
Price Note Pledge Agreement, respectively.
IN WITNESS WHEREOF, Pledgor has executed this Certificate as of
________, ______.
EXCEL LEGACY CORPORATION,
a Delaware corporation
By:_____________________________________
Name:
Title:
76
ACKNOWLEDGMENT OF DEBENTURES COLLATERAL AGENT
The undersigned hereby certifies and confirms to the Price Note
Collateral Agent as follows:
(a) The undersigned is the "Collateral Agent" under the Debentures
Pledge Agreement referenced above,
(b) The Debentures Collateral Agent acknowledges the security
interest and pledge of the Debentures Pledged Collateral pursuant to the Price
Note Pledge Agreement. Until the earlier to occur of the termination of the
Debentures Pledge Agreement or the Price Note Pledge Agreement, the Debentures
Collateral Agent agrees to hold the Debentures Pledged Collateral for itself and
for the Price Note Collateral Agent, in order to perfect the security interest
in the Debentures Pledged Collateral for itself under the Debentures Pledge
Agreement and for the Price Note Collateral Agent under the Price Note Pledge
Agreement. The Debentures Collateral Agent shall not be required to hold, and
agrees that it will not hold, the Debentures Pledged Collateral for any person
other than the Holders and the Price Note Collateral Agent in order to perfect a
security interest in the Debentures Pledged Collateral.
(c) The Debentures Collateral Agent agrees to not release any
Debentures Pledged Collateral except pursuant to a Release Certificate and, if
applicable, an accompanying Acknowledgment of Price Note Collateral Agent, as
provided for by Section 4 of the Debentures Pledge Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________, _____.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
By:_____________________________________
Name:
Title:
77
ACKNOWLEDGMENT OF PRICE NOTE COLLATERAL AGENT
The undersigned certifies to the Debentures Collateral Agent under the
Debentures Pledge Agreement referenced above as follows:
(a) The undersigned is the "Collateral Agent" under the Price Note
Pledge Agreement referenced above,
(b) The security interest granted in favor of the undersigned, as
Price Note Collateral Agent, in the property described in (i) Schedule 1
attached to this Certificate or (ii) any previous Debentures Collateral
Identification Certificate executed by the Price Note Collateral Agent, is
subject and subordinate to the security interest granted in such property to the
Debentures Collateral Agent under the Debentures Pledge Agreement. Said priority
shall be applicable irrespective of the time or order of attachment or
perfection of the respective security interests or the time of filing of any
financing statements pertaining thereto, or any statutes, rules of law, or court
decisions to the contrary.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________, _____.
----------------------------------
XXXXX X. XXXXXX
78
EXHIBIT B
[FORM OF RELEASE CERTIFICATE]
This Certificate is provided by Excel Legacy Corporation, a Delaware
corporation (the "Pledgor"), pursuant to:
(i) that certain Pledge Agreement (the "Debentures Pledge
Agreement") dated as of _______, 1999 by and between Pledgor and Norwest Bank
Minnesota, National Association (the "Debentures Collateral Agent"), pursuant to
which Pledgor has granted to the Debentures Collateral Agent, as collateral
agent for the holders of the Pledgor's 9.0% Convertible Redeemable Subordinated
Secured Debentures due 2004 (the "Debentures") issued pursuant to an Indenture
(the "Debentures Indenture") dated as of _______, 1999 by and between Pledgor
and the Debentures Collateral Agent, a security interest (the "Debentures
Security Interest") in certain property of the Pledgor (the "Debentures Pledged
Collateral"), including certain shares (the "Debentures Pledged Shares") of the
common stock, par value $.0001 per share of Price Enterprises Inc., a Maryland
corporation ("the Common Stock"), in order to secure the obligations of the
Pledgor under the Debentures Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge
Agreement") dated as of _________, 1999 by and between Pledgor and Xxxxx X.
Xxxxxx (the "Price Note Collateral Agent"), pursuant to which the Pledgor has
granted to the Price Note Collateral Agent, as collateral agent in favor of the
holders of the Pledgor's Secured Promissory Notes (the "Price Note") issued
pursuant to that certain Note Purchase Agreement by and between the Pledgor and
The Sol and Xxxxx Xxxxx Trust dated as of _______, 1999 (the "Price Note
Purchase Agreement"), a security interest in certain property of the Pledgor
(the "Price Note Pledged Collateral"), including all of the shares of Common
Stock of Price Enterprises, Inc. (the "Price Note Pledged Shares"), in order to
secure the obligations of the Pledgor under the Price Note and the Price Note
Purchase Agreement.
Pledgor hereby certifies and confirms to the Debentures Collateral
Agent and the Price Note Collateral Agent as follows:
(a) Concurrently herewith, Pledgor is repurchasing, redeeming or
defeasing Debentures, or the holders thereof are converting Debentures, in the
aggregate principal amount of:
$__________________________________________________________;
and, in accordance with Section 4 of the Debentures Pledge Agreement, instructs
the Debentures Collateral Agent to release from the pledge and security interest
created by Section 1 of the Debentures Pledge Agreement the following number of
Debentures Pledged Shares (equal to 117.647 Debentures Pledged Shares for each
$1,000 in principal amount of Debentures subject to such repurchase, redemption,
defeasance or conversion):
______________________________________________________ shares.
79
(b) Pledgor represents to the Debentures Collateral Agent and
instructs as follows (check applicable box):
[ ] The Pledgor has satisfied all obligations under the Price Note
and the Price Note Purchase Agreement. The Pledgor instructs
the Debentures Collateral Agent to deliver the Debentures
Pledged Shares to the Pledgor in accordance with the
Debentures Pledge Agreement.
[ ] The Pledgor has not satisfied all obligations under the Price
Note and the Price Note Purchase Agreement. The Pledgor
instructs the Debentures Collateral Agent to deliver the
Debentures Pledged Shares to the Price Note Collateral Agent.
The Pledgor waives any right to receive the Debentures Pledged
Shares from the Debentures Collateral Agent.
(c) Pledgor acknowledges and agrees that the Debentures Collateral
Agent shall rely upon the foregoing certifications in taking
actions under the Debentures Pledge Agreement.
IN WITNESS WHEREOF, Pledgor has executed this Certificate as of
________, ______.
EXCEL LEGACY CORPORATION,
a Delaware corporation
By:_____________________________________
Name:
Title:
80
ACKNOWLEDGMENT OF PRICE NOTE COLLATERAL AGENT
The undersigned certifies to the Debentures Collateral Agent under the
Debentures Pledge Agreement referenced above as follows:
(a) The undersigned is the "Collateral Agent" under the Price Note
Pledge Agreement referenced above,
(b) The representation of the Pledgor in Paragraph (b) of the
above Release Certificate is true and correct, and the Debentures Pledged Shares
which are the subject of the above Release Certificate shall be delivered in
accordance with the instructions contained in said Paragraph.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________, _____.
__________________________________
XXXXX X. XXXXXX
81
EXHIBIT C
[FORM OF PAYMENT CERTIFICATE]
This Certificate is provided by Xxxxx X. Xxxxxx, (the "Price Notes
Collateral Agent"), pursuant to:
(i) that certain Pledge Agreement (the "Debentures Pledge
Agreement") dated as of _______, 1999 by and between Pledgor and Norwest Bank
Minnesota, National Association (the "Debentures Collateral Agent"), pursuant to
which Pledgor has granted to the Debentures Collateral Agent, as collateral
agent for the holders of the Pledgor's 9.0% Convertible Redeemable Subordinated
Secured Debentures due 2004 (the "Debentures") issued pursuant to an Indenture
(the "Debentures Indenture") dated as of _______, 1999 by and between Pledgor
and the Debentures Collateral Agent, a security interest (the "Debentures
Security Interest") in certain property of the Pledgor (the "Debentures Pledged
Collateral"), including certain shares (the "Debentures Pledged Shares") of the
common stock, par value $.0001 per share of Price Enterprises Inc., a Maryland
corporation ("the Common Stock"), in order to secure the obligations of the
Pledgor under the Debentures Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge
Agreement") dated as of _________, 1999 by and between Pledgor and Xxxxx X.
Xxxxxx (the "Price Note Collateral Agent"), pursuant to which the Pledgor has
granted to the Price Note Collateral Agent, as collateral agent in favor of the
holders of the Pledgor's Secured Promissory Notes (the "Price Note") issued
pursuant to that certain Note Purchase Agreement by and between the Pledgor and
The Sol and Xxxxx Xxxxx Trust dated as of _______, 1999 (the "Price Note
Purchase Agreement"), a security interest in certain property of the Pledgor
(the "Price Note Pledged Collateral"), including all of the shares of Common
Stock of Price Enterprises, Inc. (the "Price Note Pledged Shares"), in order to
secure the obligations of the Pledgor under the Price Note and the Price Note
Purchase Agreement.
The Price Note Collateral Agent hereby certifies and confirms to the
Debentures Collateral Agent as follows:
The Pledgor has satisfied all obligations under the Price Note and the
Price Note Purchase Agreement. The Debentures Collateral Agent shall,
from and after the date of this Certificate, deliver the Debentures
Pledged Shares to the Pledgor in accordance with the Debentures Pledge
Agreement and the Price Note Collateral Agent hereby waives any right
to receive the Debentures Pledged Shares from the Debentures Collateral
Agent.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________, _____.
__________________________________
XXXXX X. XXXXXX
